Stocks Pressured by AI Jitters and Signs of US Labor Market Weakness

The S&P 500 Index ($SPX) (SPY) today is down -0.16%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.15%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.42%.  December E-mini S&P futures (ESZ25) are down -0.15%, and December E-mini Nasdaq futures (NQZ25) are down -0.38%.

US stock indexes are mixed today, with the Dow Jones Industrials climbing to a 1-week high.  The weakness in AI-infrastructure stocks and semiconductor makers today is leading to losses in the broader market.  CoreWeave is down more than -10% to lead AI stocks lower after it said a data center delay would negatively impact Q4 earnings expectations.  Also, Nvidia is down by more than -2% after SoftBank Group sold its entire stake in the company for $5.83 billion.  Trading activity may be below average today, as cash trading in Treasuries is closed for the Veterans Day holiday.

Stocks are also pressured today after a weekly report from ADP showed that for the four weeks ending October 25, 2025, US private employers shed an average of 11,250 jobs a week, suggesting the labor market has weakened.

Stocks are also pressured today after the US Oct NFIB small business optimism index fell -0.6 to a 6-month low of 98.2, weaker than expectations of 98.3.

Stocks have support from signs that the US government shutdown is nearing an end.  After the Senate voted 60-40 on Monday to pass a temporary continuing resolution (CR) to fund the government, the House is expected to vote on the measure on Wednesday, and House Speaker Johnson said he expects it will pass quickly.  If approved, the bill goes to President Trump, who said he will sign it into law. 

On Sunday, a group of eight Senate Democrats broke with their party to vote with Republicans to advance a bill to reopen the government.  The bill would provide full-year funding for some departments, fund other agencies through January 30, and provide pay for furloughed government workers.  The bill will also resume withheld federal payments to states and localities and recall agency employees who were laid off during the shutdown.

The markets are discounting a 70% chance of another -25 bp rate cut at the next FOMC meeting on December 9-10.

Q3 corporate earnings season is nearly over as 456 of the S&P 500 companies have reported earnings results.  According to Bloomberg Intelligence, 82% of reporting S&P 500 companies exceeded forecasts, on course for the best quarter since 2021.  Q3 earnings rose +14.6%, more than doubling expectations of +7.2% y/y. 

Overseas stock markets are mixed today.  The Euro Stoxx 50 rose to a 1.5-week high and is up +0.65%.  China’s Shanghai Composite fell from a 1.5-week high and closed down -0.39%.  Japan’s Nikkei Stock 225 closed down -0.14%.

Interest Rates

December 10-year T-notes (ZNZ5) today are up by +8 ticks.  The cash Treasury market is closed today for the Veterans Day holiday.  T-notes have support today from the weakness in stocks. T-notes added to their gains after today’s ADP report showed that private-sector US employers shed more jobs than they created in the four weeks ending October 25, a dovish factor for Fed policy. 

Gains in T-notes are limited amid progress on ending the US government shutdown.  The Senate passed a temporary CR on Monday, and the House will vote on the measure on Wednesday, which is expected to pass and go to President Trump, who said he will sign the bill into law. 

European government bond yields are moving lower today.  The 10-year German bund yield is down -1.3 bp to 2.655%. The 10-year UK gilt yield fell to a 2-week low of 4.374% and is down -8.4 bp to 4.378%.

The German Nov ZEW survey expectations of economic growth unexpectedly fell -0.8 to 38.5, versus expectations of an increase to 41.0.

ECB Executive Board member Elderson said the current level of ECB interest rates “is appropriate, but we will continue to be data-dependent and decide on rates one meeting at a time.”

ECB Governing Council member Kocher said, “The ECB is in a good position on interest-rate policy, and the expectation is that not much more will happen in the next few months.”

UK Sep employment change unexpectedly fell -22,000, weaker than expectations of a +5,000 increase and the biggest decline in 1.5 years.  The Sep ILO unemployment rate rose +0.2 to a 4.5-year high of 5.0%, showing a weaker labor market than expectations of 4.9%.

Swaps are discounting a 3% chance for a -25 bp rate cut by the ECB at its next policy meeting on December 18.

US Stock Movers

Chip stocks are sliding today and are weighing on the overall market. ARM Holdings Plc (ARM) is down more than -3% to lead losers in the Nasdaq 100.  Also, Micron Technology (MU) and Lam Research (LRCX) are down more than -2%.  In addition, Applied Materials (AMAT), Intel (INTC), KLA Corp (KLAC), and Marvell Technology (MRVL) are down more than -1%. 

CoreWeave Inc (CRWV) is down more than -10% after saying a data center delay will negatively impact Q4 expectations, prompting JPMorgan Chase to downgrade the stock to neutral from overweight. 

Gemini Space Station Inc (GEMI) is down more than -10% after reporting a Q3 loss of -$6.67 per share, a larger loss than the consensus of -$3.24.

Rigetti Computing (RGTI) is down more than -6% after reporting Q3 revenue of $1.95 million, below the consensus of $2.17 million. 

Nvidia (NVDA) is down more than -2% to lead losers in the Dow Jones Industrials after Softbank Group sold its entire stake of Nvidia stock for $5.83 billion. 

DraftKings (DKNG) is down more than -1% after CBRE Research downgraded the stock to hold from buy.

Surmodics Inc. (SRDX) is up more than +49% after a federal court rejected a request by the FTC and some state regulators for a preliminary injunction blocking the company’s  acquisition by GTCR. 

RealReal (REAL) is up more than +23% after boosting its full-year revenue forecast to $687 million-$690 million from a previous forecast of $667 million-$674 million, stronger than the consensus of $675 million. 

Paramount Skydance (PSKY) is up more than +9% to lead gainers in the S&P 500 after announcing an additional 1,600-person workforce reduction and a goal to achieve at least $3 billion in cost savings. 

Rocket Lab (RKLB) is up more than +7% after reporting Q3 revenue of $155 million, better than the consensus of $152.5 million. 

Viasat Inc. (VSAT) is up more than +6% after JPMorgan Chase upgraded the stock to overweight from neutral with a price target of $50.

Kodiak Sciences (KOD) is up more than +4% after HC Wainwright & Co LLC upgraded the stock to buy from neutral with a price target of $24.

Linde Plc (LIN) is up more than +1% after UBS upgraded the stock to buy from neutral with a price target of $500. 

Earnings Reports(11/11/2025)

Amdocs Ltd (DOX) and Anglogold Ashanti Plc (AU).