The S&P 500 Index ($SPX) (SPY) is down -0.02% today, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.25% and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.33%. December E-mini S&P futures (ESZ25) are down -0.03% and December E-mini Nasdaq futures (NQZ25) are up +0.30%.
Stock indices are mixed today. Higher bond yields are negative for stocks, as the 10-year Treasury yield rose to a two-week high of 4.16% today and is currently up +1 bps. However, stocks are supported by expectations that the Federal Reserve will cut interest rates following the two-day FOMC meeting that ends Wednesday. Market seasonality also favors stocks, as December is typically a bullish month. The current strength in chip stocks is providing a bullish backdrop for the broader market.
M&A activity and positive corporate news are also helping to push shares higher. Confluent is up more than 27% after IBM acquired the company for about $11 billion, including debt. Additionally, Carvana is up more than 7% after S&P Dow Jones Indices said the company will replace LKQ Corp on the S&P 500 before trading begins on Monday, December 22.
This week markets will focus on government reports and the FOMC meeting. On Tuesday in October, JOLTS job openings are expected to increase by 7,150. On Wednesday, the third quarter labor cost index is expected to increase +0.9%. Results from the FOMC meeting on Tuesday and Wednesday are expected to show a 25 bp cut in the fed funds target range to 3.50%-3.75%. Markets will also be watching Fed Chair Powell’s post-meeting comments on the future direction of interest rates. On Thursday, weekly initial jobless claims are expected to rise by +29,000 to 220,000.
Today’s Chinese trade report was mixed, as China’s exports in November rose +5.9% year-on-year, stronger than expectations of +4.0% year-on-year. However, November imports increased only +1.9% year-on-year, less than expectations of +3.0% year-on-year.
President Trump said last Tuesday that he will announce his choice for the new Federal Reserve chair in early 2026. Bloomberg reported last week that National Economic Council Director Kevin Hassett is seen as the likely choice to succeed Powell. The Fed’s independence would be in doubt as Hassett supports President Trump’s approach to lowering interest rates at the Fed.
Markets are pricing in a 100% chance of another -25bp rate cut as the two-day FOMC meeting concludes on Wednesday.
The third-quarter corporate earnings season is coming to a close, as 495 of the S&P 500 companies have released their results. According to Bloomberg Intelligence, 83% of reporting S&P 500 companies beat estimates, on track for the best quarter since 2021. Third-quarter earnings rose +14.6%, more than double expectations of +7.2% year-over-year.
Foreign stock markets are higher today. The Euro Stoxx 50 rises +0.03%. China’s Shanghai Composite hit a two-week high and closed up +0.54%. Japan’s Nikkei Stock 225 closed up +0.18%.
Interest rates
March 10-year Treasuries (ZNH6) are down -3 ticks today. The 10-year Treasury yield has risen +1.2 bps to 4.147%. March Treasury futures fell to a two-week low today, and the 10-year Treasury yield rose to a two-week high of 4.159%. The current strength in stocks is weighing on Treasury bond prices. Additionally, supply pressures are undermining Treasury note prices as the Treasury will auction $119 billion in Treasury notes and bonds this week, beginning with today’s auction for $58 billion of 3-year Treasury notes. Additionally, Treasury notes were weighed down by negative drag from a drop in Japanese 10-year JGB bond prices to an 18-year low today, amid prospects of a BOJ rate hike later this month.
European government bond yields are rising today. The German 10-year bond yield hit an 8.5-month high of 2.846% and rose +4.1 basis points to 2.839%. The 10-year UK bond yield rose to a 1.5-week high of 4.524% and is up +2.0 bps to 4.496%.
The December Sentix Eurozone Investor Confidence Index rose +1.2 -6.2, stronger than expectations of -6.3.
German industrial production for October increased +1.8% mom, stronger than expectations of +0.3% mom and the largest increase in 7 months.
ECB Executive Board member Isabel Schnabel said risks to the eurozone economy and inflation are tilted to the upside, and she is “quite comfortable” with market expectations that the ECB’s next interest rate move will be an increase.
The swaps price in a 1% chance that the ECB will cut rates by -25 bps at its next policy meeting on December 18.
US Stock Engines
Chipmakers are rallying today and supporting gains in the broader market. Micron Technology (MU) is up more than +4% and Broadcom (AVGO) is up more than +3%. Additionally, Advanced Micro Devices (AMD), Lam Research (LRCX), and ASML Holding NV (ASML) rose more than +2%. Additionally, Nvidia (NVDA), ON Semiconductor (ON), KLA Corp (KLAC), and Microchip Technology (MCHP) rose more than +1%.
Cryptocurrency-exposed stocks are rising today, with Bitcoin (^BTCUSD) up over +3%. Strategy (MSTR), Coinbase Global (COIN), and MARA Holdings (MARA) rose more than +2%. Additionally, Galaxy Digital Holdings (GLXY) and Riot Platforms (RIOT) rose more than +1%.
Kymers Therapeutics (KYMR) is up over +41% after reporting positive clinical results from its BroADen Phase 1b trial of KT-621, an oral STAT6 degrader, in patients with moderate to severe atopic dermatitis.
Confluent (CFLT) is up more than 27% after International Business Machines acquired the company for about $11 billion, or about $31 per share.
Warner Bros Discovery (WBD) is up more than +6% and leads gains on the S&P 500 and Nasdaq 11 after Paramount Skydance offered $30 per share for the company, above Netflix’s offer of $27.75 per share.
Carvana (CVNA) is up more than +7% after S&P Dow Jones Indices said the company will replace LKQ Corp in the S&P 500 before trading begins on Monday, December 22.
CRH Plc (CRH) is up more than +5% after S&P Dow Jones Indices said the company will replace Solstice Advanced Materials in the S&P 500 before trading begins on Monday, December 22.
Compass Inc (COMP) is up more than +4% after Barclays upgraded the stock to overweight from equal weight with a $13 price target.
Inspire Medical Systems (INSP) is up more than +1% after Oppenheimer & Co upgraded the stock to outperform the market with a $175 price target.
Marvell Technology (MRVL) is down more than -8% to lead the losers on the Nasdaq 100 after Benchmark Company LLC downgraded the stock to hold from buy.
CoreWeave (CRWV) is down more than -5% after announcing that it intends to offer $2 billion worth of convertible senior notes due 2031 in a private offering.
Range Resources (RRC) is down more than -2% after JPMorgan Chase downgraded the stock to underweight from neutral with a $39 price target.
Rivian Automotive (RIVN) is down more than -2% after Morgan Stanley downgraded the stock to underweight from equal weight with a $12 price target.
Lennar (LEN) is down more than -2% after Barclays downgraded the stock to underweight from equal weight with a $98 price target.
Tesla (TSLA) is down more than -2% after Morgan Stanley downgraded the stock to equal weight from overweight.
Earnings Reports (12/8/2025)
Barnes & Noble Education Inc (BNED), Compass Minerals International (CMP), Mama’s Creations Inc (MAMA), Oil-Dri Corp of America (ODC), Ooma Inc (OOMA), Phreesia Inc (PHR), Rezolve AI PLC (RZLV), Toll Brothers Inc (TOL).
On the date of publication, Rich Asplund had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
