Stocks Pressured as Bond Yields Rise

The S&P 500 Index ($SPX) (SPY) today is down -0.03%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.12%.  December E-mini S&P futures (ESZ25) are down -0.05%, and December E-mini Nasdaq futures (NQZ25) are down -0.13%. 

Stock indexes fell back from their best levels today and turned mixed as bond yields rose.  The 10-year T-note yield rose +2 basis points to 4.13% after US Aug new home sales unexpectedly jumped to a 3.5-year high.

The strength of chip makers today is a supportive factor for stocks.  Also, today’s +1% increase in WTI crude oil is pushing energy producers higher.  In addition, AI optimism is lifting technology stocks after China’s Alibaba announced plans to increase its AI spending beyond an initial $50 billion target. 

US MBA mortgage applications rose +0.6% in the week ended September 19, with the purchase mortgage sub-index up +0.3% and the refinancing mortgage sub-index up +0.8%.  The average 30-year fixed-rate mortgage fell -5 bp to 6.34% from 6.39% in the prior week.

US Aug new home sales unexpectedly jumped +20.5% m/m to a 3.5-year high of 800,000, versus expectations of a decline to 650,000.

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% as of the end of May. 

The markets this week will focus on any fresh trade or tariff news.  On Thursday, weekly initial unemployment claims are expected to increase by +2,000 to 233,000.  Also, Aug core (ex-defense and aircraft) capital goods new orders are expected to slip -0.1% m/m.  In addition, Q2 GDP is expected to be unrevised at +3.3% (q/q annualized). Finally, Aug existing home sales are expected to fall -1.3% m/m to 3.96 million.  On Friday, Aug personal spending is expected to be up by +0.5% m/m and Aug personal income is expected to be up by +0.3% m/m.  Also, the Aug core PCE price index, the Fed’s preferred inflation gauge, is expected to rise by +0.2% m/m and +2.9% y/y.  Finally, the University of Michigan’s Sep US consumer sentiment index is expected to remain unchanged at 55.4.

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 higher.  The Euro Stoxx 50 is up by +0.06%.  China’s Shanghai Composite closed up +0.83%.  Japan’s Nikkei Stock 225 closed up +0.30%.

Interest Rates

December 10-year T-notes (ZNZ5) today are down by -5 ticks.  The 10-year T-note yield is up +2.1 bp to 4.127%.  Today’s stronger-than-expected Aug new home sales report is weighing on T-note prices. Also, supply pressures are undercutting T-note prices as the Treasury will auction $28 billion of 2-year floating rate notes and $70 billion of 5-year T-notes later today. 

European government bond yields today are moving lower.  The 10-year German bund yield is down -0.6 bp at 2.742%. The 10-year UK gilt yield is down -1.9 bp to 4.661%.

The German Sep IFO business climate survey unexpectedly fell -1.2 to a 4-month low of 87.7, versus expectations of an increase to 89.4.

ECB Executive Board member Cipollone said that “risks on inflation in the Eurozone are very balanced” and he doesn’t see major threats to inflation in either direction, with interest rates currently well positioned.

Swaps are discounting a 1% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.

US Stock Movers

Chip stocks are climbing today, led by a +5% jump in Intel (INTC) to lead gainers in the Nasdaq 100 after Treasury Secretary Bessent said Nvidia’s acquisition of a stake in Intel validates the US government’s decision to become an Intel shareholder.  Also, Marvell Technology (MRVL) is up more than +3% after its board authorized a new $5 billion share repurchase program. In addition, ARM Holdings Plc (ARM) is up more than +2%, and Microchip Technology (MCHP), ON Semiconductor (ON), NXP Semiconductor (NXPI), and Texas Instruments (TXN) are up more than +1%.

Energy producers and energy service providers are moving higher today, with the price of WTI crude oil up more than +1%.  As a result, Diamondback Energy (FANG) and Devon Energy (DVN) are up more than +3%.  Also, APA Corp (APA), Phillips 66 (PSX), and ConocoPhillips (COP) are up more than +2%.  In addition, Halliburton (HAL), Occidental Petroleum (OXY), Baker Hughes (BKR), Valero Energy (VLO), Schlumberger (SLB), Exxon Mobil (XOM), Marathon Petroleum (MPC), and Chevron (CVX) are up more than +1%.

uniQure NV (QURE) is up more than +190% after reporting its phase I/II trial of its AMT-130 in treating Huntington’s disease met its prespecified endpoint, with a high dose demonstrating a statistically significant slowing of disease progression at 36 months. 

Iren Ltd (IREN) is up more than +15% after Arete initiated coverage of the stock with a recommendation of buy and a price target of $78. 

Cipher Mining (CIFR) is up more than +5% after OpenAI said it plans to invest about $400 billion to develop five new data center sites in partnership with Oracle and Softbank Group. Cipher Mining counts Softbank as an investor. 

Thor Industries (THO) is up more than +4% after reporting Q4 net sales of $2.52 billion, well above the consensus of $2.33 billion. 

Albemarle (ALB) is up more than +3% as lithium producers rally on news that the Trump administration is pursuing a stake in Lithium Americas Corp.

General Motors (GM) is up more than +2% after UBS upgraded the stock to buy from neutral with a price target of $81. 

ServiceNow (NOW) is up more than +1% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $1,250. 

Acadia Pharmaceuticals (ACAD) is down more than -11% after reporting that a Phase 3 trial of its intranasal carbetocin in patients with hyperphagia in Prader-Willi syndrome failed to meet its primary endpoint. 

Freeport-McMoRan (FCX) is down more than 10% to lead losers in the S&P 500 after it declared force majeure on contracted copper supplies and suspended activity at its Grasberg mine in Indonesia following a deadly mudslide. 

Bloom Energy (BE) is down more than -12% after Jeffries downgraded the stock to underperform from hold with a price target of $31. 

James Hardie Industries Plc (JHX) is down more than 3% after projecting a fiscal 2025-28 target EBITDA margin of 28.5%, below the consensus of 31%-32%. 

Electronic Arts (EA) is down more than -3% on mixed reviews for its new EA Sports FC 26 video game that launches on Friday.

Adobe (ADBE) is down more than -2% to lead losers in the Nasdaq 100 after Morgan Stanley downgraded the stock to equal weight from overweight. 

Earnings Reports(9/24/2025)

Barnes & Noble Education Inc (BNED), Cintas Corp (CTAS), HB Fuller Co (FUL), KB Home (KBH), PACS Group Inc (PACS), Steelcase Inc (SCS), Stitch Fix Inc (SFIX), Thor Industries Inc (THO), Uranium Energy Corp (UEC), Worthington Steel Inc (WS).