The S&P 500 Index ($SPX) (SPY) today is up +0.11%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.08%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.23%. December E-mini S&P futures (ESZ25) are up +0.09%, and December E-mini Nasdaq futures (NQZ25) are up +0.22%.
Stock indexes are moving higher today, with the Nasdaq 100 posting a new all-time high. The prospects for additional Fed interest rate cuts have sparked risk-on sentiment in asset markets and supported stocks. Market volatility may be higher than usual due to today’s quarterly event known as triple-witching, as $5 trillion worth of stock options, futures, and derivatives will expire. Higher bond yields today are limiting gains in stocks, with the 10-year T-note yield up +2 bp to 4.13%
Minneapolis Fed President Neel Kashkari said he supported the FOMC’s decision to cut interest rates by 25 bp this week, and he has penciled in two additional cuts this year.
President Trump will speak to Chinese President Xi Jinping by telephone today to discuss a framework agreement to shift control of TikTok’s operations from its Chinese parent ByteDance Ltd to a consortium of American investors. The call may also discuss trade issues and lead to a potential in-person meeting.
Rising corporate earnings expectations are a bullish backdrop for stocks. According to Bloomberg Intelligence, more than 22% of companies in the S&P 500 provided guidance for their Q3 earnings results that are expected to beat analysts’ expectations, the highest in a year. Also, S&P companies are expected to post 6.9% earnings growth in Q3, up from 6.7% at the end of May.
The markets are pricing in a 92% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29.
Overseas stock markets today are mixed. The Euro Stoxx 50 rose to a 4-week high and is up by +0.23%. China’s Shanghai Composite closed down -0.30%. Japan’s Nikkei Stock 225 fell from a new record high and posted a 1-week low and closed down -0.57%.
Interest Rates
December 10-year T-notes (ZNZ5) today are down by -5 ticks. The 10-year T-note yield is up by +2.3 bp to 4.127%. T-note prices today extended Thursday’s losses and fell to a 2-week low, and the 10-year T-note yield rose to a 2-week high of 4.143%. T-notes are under pressure today due to strength in stocks, which has curbed safe-haven demand for government debt securities. Also, negative carryover from today’s slide in European government bonds to 2-week lows is weighing on T-notes. Dovish comments today from Minneapolis Fed President Neel Kashkari lifted T-notes off their lows when he said he has penciled in two additional Fed rate cuts this year.
Concerns about Fed independence are negatively impacting T-note prices due to President Trump’s attempt to fire Fed Governor Cook and Stephen Miran’s intention to hold a Fed Governor position while remaining technically in his White House role on the Council of Economic Advisors.
European government bond yields are moving higher today. The 10-year German bund yield rose to a 2-week high of 2.752% and is up +1.7 bp at 2.742%. The 10-year UK gilt yield climbed to a 2-week high of 4.717% and is up +3.1 bp at 4.707%.
German Aug PPI fell -0.5% m/m and -2.2% y/y, weaker than expectations of -0.1% m/m and -1.7% y/y, with the -2.2% y/y drop the biggest year-on-year decline in 15 months.
UK Aug retail sales ex-auto fuel rose +0.8% m/m, stronger than expectations of +0.7% m/m and the largest increase in 5 months.
UK Aug government borrowing was 18 billion pounds ($24.4 billion), above estimates of 12.5 billion pounds and the highest borrowing for the month in five years.
ECB Governing Council member Centeno said, “Growth in the Eurozone is below potential and inflation will soon fall below our target and stay there for some time. I believe that it’s more likely than not that we have to ease monetary policy further.”
ECB Governing Council member Muller said the ECB is running a slightly accommodative monetary policy and currently has no reason to lower borrowing costs any further.
Swaps are discounting a 2% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.
US Stock Movers
Strength in the Magnificent Seven megacap technology stocks is supportive for the overall market. Tesla (TSLA) is up more than +2% and Apple (AAPL) is up more than +1%. Also, Microsoft (MSFT) is up +0.94%, Amazon.com (AMZN) is up +0.75%, Nvidia (NVDA) is up +0.56%, and Alphabet (GOOGL) is up +0.27%..
CoreWeave (CRWV) is up more than +3% after Loop Capital Markets initiated coverage on the stock with a buy recommendation and a price target of $165.
Klaviyo Inc (KVYO) is up more than +3% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $50.
Lincoln National (LNC) is up more than +1% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $58.
FedEx (FDX) is up more than +2% after reporting Q1 adjusted EPS of $3.83, better than the consensus of $3.59.
Warner Bros Discovery (WBD) is up more than +1% after CNBC reported a potential bid for the company from Paramount Skydance could be in the $22 to $24 a share range.
Scholastic Corp (SCHL) is down more than -10% after reporting a Q1 adjusted loss per share of -$2.52, a wider loss than the consensus of -$2.44.
Hess Midstream LP (HESM) is down more than -9% after saying it expects lower capital spending in 2026 and 2027, citing suspension of early engineering activities on its Capa gas plant and removal of the project from its forward plan.
Lennar (LEN) is down more than -1% after reporting Q3 revenue of $8.81 billion, below the consensus of $9.05 billion, and forecasting Q4 new orders of 20,000 to 21,000, weaker than the consensus of 21,047.
Intel (INTC) is down more than -1% after Citigroup downgraded the stock to sell from neutral with a price target of $29.
MetLife (MET) is down more than -1% after Piper Sandler downgraded the stock to neutral from overweight.
Earnings Reports(9/19/2025)
C&F Financial Corp (CFFI), Louisiana-Pacific Corp (LPX), Pathward Financial Inc (CASH).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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