The S&P 500 Index ($SPX) (SPY) is down -0.06%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.11%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.38%. E-mini S&P December futures (ESZ25) are down -0.12% and E-mini Nasdaq December futures (NQZ25) are down -0.39%.
Stock indices are now under pressure in a context of rising bond yields, with the yield on 10-year Treasury notes up +2 bps to 4.08%. Today’s decline in initial jobless claims to a 3-year low was a hawkish move for Fed policy and pushed Treasury yields higher. Additionally, a Reuters report today said the BoJ is likely to raise interest rates this month and the government would tolerate the move, pushing Japanese JGB yields to an 18-year high and undercutting Treasury bond prices. Additionally, weakness among chip makers is weighing on the stock market as a whole.
Some positive corporate news today is supporting stocks. Dollar General is up more than +8% after increasing its comparable sales forecast for the full year. Additionally, Hormel Foods is up over +3% after reporting stronger-than-expected fourth-quarter EPS. Additionally, Meta Platforms is up over +3% after CEO Zuckerberg announced plans to cut the Metaverse Group’s budget by up to 30% next year.
US November Challenger job losses increased +23.5% YoY to 71,321, a lower than expected increase of +48.0% YoY, but still the highest in three years for November.
U.S. weekly initial jobless claims unexpectedly fell -27,000 to a three-year low of 191,000, showing a stronger labor market than expected from an increase to 220,000.
President Trump said Tuesday that he will announce his selection for the new Fed chair in early 2026. Bloomberg reported last week that National Economic Council Director Kevin Hassett was considered the likely choice to succeed Powell. The Fed’s independence would be called into question, as Hassett supports President Trump’s approach to cutting Fed interest rates.
This week, market attention will focus on American economic news. Later today, factory orders for September are expected to rise +0.3% m/m. On Friday, personal spending is expected to increase +0.3% for September and personal income is expected to increase +0.3% m/m. Also on Friday, the September core PCE price index, the Fed’s preferred inflation measure, is expected to rise +0.2% m/m and +2.8% y/y. Finally, the University of Michigan Consumer Confidence Index for December is expected to climb +1.0 to 52.0.
Markets are pricing in a 91% probability of another -25 basis point rate cut at the next FOMC meeting on December 9-10.
The third quarter corporate earnings season is coming to an end as 475 of the S&P 500 companies have released their results. According to Bloomberg Intelligence, 83% of S&P 500 companies beat forecasts, marking the best quarter since 2021. Third-quarter earnings rose +14.6%, more than double expectations of +7.2% year over year.
Foreign stock markets today are mixed. The Euro Stoxx 50 reached a 2.5-week high and was up +0.49%. China’s Shanghai Composite index closed down -0.06%. Japan’s Nikkei Stock 225 hit a 3-week high and closed sharply up +2.33%.
Interest rate
March 10-year Treasuries (ZNH6) are down -7 ticks today. The yield on the 10-year T-note is up +1.9 bp to 4.083%. Treasury prices are under pressure today due to the negative fallout from a fall in prices of Japan’s 10-year JGB bonds to an 18-year low, as prospects of a BoJ rate hike later this month have improved. Treasuries added to their losses today after U.S. weekly initial jobless claims unexpectedly fell to a 3-year low, a hawkish factor for Fed policy. Rising inflation expectations are also undercutting Treasuries after the 10-year breakeven inflation rate hit a two-week high at 2.274% today.
European government bond yields are mixed today. The yield on the 10-year German Bund climbs to a 2-month high of 2.775% and is up +2.2 bp to 2.769%. The UK 10-year gilt yield fell to a one-week low of 4.418% and is down -1.3bps at 4.435%.
Eurozone retail sales in October remained unchanged month-on-month, exactly as expected.
Cipollone, a member of the ECB executive board, said: “The eurozone economy has shown resilience, risks around inflation appear balanced and our central scenario appears increasingly credible. »
Swaps estimate there is a 1% chance that the ECB will cut rates by -25 basis points at its next policy meeting on December 18.
Stock movers in the United States
The weakness of chipmakers is a negative factor for the overall market. Micron Technology (MU) is down over -3% and leads the Nasdaq 100 losers. Additionally, Intel (INTC) and ON Semiconductor (ON) are down over -2%. Additionally, Advanced Micro Devices (AMD), ASML Holding NV (ASML), NXP Semiconductors NV (NXPI), Lam Research (LRCX), and GlobalFoundries (GFS) are down more than -1%.
Stocks exposed to cryptocurrencies are under pressure today with Bitcoin (^BTCUSD) down more than -1%. MARA Holdings (MARA) and Riot Platforms (RIOT) are down more than -2%. Additionally, Coinbase Global (COIN) and Strategy (MSTR) are down over -1%. Elsewhere, Galaxy Digital Holdings (GLXY) is down -0.74%
UiPath (PATH) is up over +13% after reporting total third-quarter revenue of $411.1 million, above the consensus of $392.8 million.
Dollar General (DG) is up more than +8% to lead the S&P 500 gainers after reporting third-quarter net sales of $10.65 billion, better than the consensus of $10.62 billion, and raising its 2026 net sales forecast from +4.7% to +4.9% from a previous forecast of +4.3% to +4.8%.
Brown-Forman (BF.B) is up more than +4% after reporting second-quarter net revenue of $1.04 billion, above the consensus of $1.02 billion.
Meta Platforms (META) is up more than +3% and leading the Nasdaq 100 gainers after CEO Zuckerberg announced plans to cut the metaverse group’s budget by up to 30% next year.
Hormel Foods (HRL) is up more than +3% after reporting fourth-quarter adjusted EPS of 32 cents, better than the consensus of 30 cents, and forecasting 2026 adjusted EPS of $1.43 to $1.51, the midpoint above the consensus of $1.44.
Five Below (FIVE) is up more than +2% after reporting third-quarter net sales of $1.04 billion, stronger than the consensus of $975.3 million, and raising its 2025 net sales forecast to $4.62-4.65 billion from a previous estimate of $4.44-4.52 billion, well above the consensus of $4.52 billion of dollars.
Genesco (GCO) is down more than -26% after reporting third-quarter adjusted EPS from continuing operations of 79 cents, weaker than the consensus of 86 cents, and a forecast for 2026 adjusted EPS from continuing operations of 95 cents, well below the consensus of $1.55.
UniQure NV (QURE) is down more than -13% after reporting that the FDA indicated that data from its Phase I/II studies of its AMT-130, an investigational gene therapy for Huntington’s disease, are currently unlikely to provide primary evidence to support a biologics license application submission.
Symbotic (SYM) is down more than -12% after a SoftBank Group subsidiary reportedly sold 10 million shares of its Symbotic stock.
Snowflake (SNOW) is down more than -10% after forecasting a fourth-quarter adjusted operating margin of around 7%, weaker than the consensus of 8.5%.
Kroger (KR) is down more than -5%, topping the S&P 500 losers after reporting third-quarter revenue of $33.9 billion, weaker than the consensus of $34.2 billion.
Halozyme Therapeutics (HALO) closed down over -3% after Goldman Sachs downgraded the stock to sell from neutral with a $56 price target.
Lennar (LEN) is down more than -1% after JPMorgan Chase lowered the stock’s rating from neutral to underweight with a price target of $115.
Income Reports (12/4/2025)
Brown-Forman Corp (BF/B), Cooper Cos Inc/The (COO), Docusign Inc (DOCU), Dollar General Corp (DG), Donaldson Co Inc (DCI), Hewlett Packard Enterprise Co (HPE), Hormel Foods Corp (HRL), Kroger Co/The (KR), Rubrik Inc (RBRK), Samsara Inc (IOT), Science Applications International Corp (SAIC), SentinelOne Inc (S), Ulta Beauty Inc (ULTA).
As of the date of publication, Rich Asplund did not hold (either directly or indirectly) any positions in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. This article was originally published on Barchart.com
