Stocks Settle Mostly Higher as Government Poised to Reopen

The S&P 500 Index ($SPX) (SPY) on Wednesday closed up +0.06%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.68%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.06%.  December E-mini S&P futures (ESZ25) rose +0.08%, and December E-mini Nasdaq futures (NQZ25) fell -0.04%.

US stock indexes settled mostly higher on Wednesday, with the S&P 500 posting a 1-week high and the Dow Jones Industrial Average posting a new all-time high.  Stocks rose in anticipation that the US government shutdown could end as soon as late Wednesday, when the House is expected to vote on the continuing resolution (CR) that the Senate already passed on Monday.  If approved, the bill goes to President Trump, who said he will sign it into law.

Strength in semiconductor stocks also supported the broader market on Wednesday, led by a +9% jump in Advanced Micro Devices after it projected accelerating sales growth over the next five years.  However, the weakness in the Magnificent Seven technology stocks on Wednesday limited gains in the broader market, as did a slide in energy producers after the price of WTI crude oil tumbled more than -4% to a 3-week low.

Comments on Wednesday from Atlanta Fed President Raphael Bostic were hawkish when he said, “Despite shifts in the labor market, the clearer and urgent risk is still price stability,” and he favors keeping interest rates steady until it is clear the Fed is on track to reach its 2% inflation goal.

US MBA mortgage applications rose +0.6% in the week ended November 7, with the purchase mortgage sub-index up +5.8% and the refinancing sub-index down -3.4%.  The average 30-year fixed rate mortgage rose +3 bp to 6.34% from 6.31% in the prior week.

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 White House on Wednesday said that the monthly October payrolls report and consumer price index are unlikely to be released due to the government shutdown.  Once the government reopens, the Bureau of Labor Statistics has not released an updated schedule for which indicators will be released and when.

The markets are discounting a 64% 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 settled mixed on Wednesday.  The Euro Stoxx 50 rose to a new record high and closed up +1.08%.  China’s Shanghai Composite closed down -0.07%.  Japan’s Nikkei Stock 225 closed up +0.43%.

Interest Rates

December 10-year T-notes (ZNZ5) on Wednesday closed down -1 tick.  The 10-year T-note yield fell -4.9 bp to 4.067% as the cash Treasury market reopened after being closed for Tuesday’s Veterans Day holiday.  Dec T-notes fell from a 2-week high, and the 10-year T-note yield dropped to a 2-week low of 4.05%.  T-notes were under pressure Wednesday amid strength in stocks, as anticipation that the US government will shortly reopen curbs safe-haven demand for government debt securities.  T-notes also came under pressure due to weak demand for the Treasury’s $42 billion auction of 10-year T-notes that had a bid-to-cover ratio of 2.43, below the 10-auction average of 2.55.

European government bond yields were mixed on Wednesday.  The 10-year German bund yield fell -1.5 bp to 2.643%. The 10-year UK gilt yield rose +1.1 bp to 4.398%.

ECB Executive Board member Schnabel said interest rates are “absolutely” in a good place, as there’s positive momentum in the Eurozone economy and inflation risks are slightly tilted to the upside.

Swaps are discounting a 4% chance for a -25 bp rate cut by the ECB at its next policy meeting on December 18.

US Stock Movers

Chip stocks rallied on Wednesday and boosted the broader market, led by a +9% jump in Advanced Micro Devices (AMD) after it projected accelerating sales growth over the next five years.  Also, Analog Devices (ADI) closed up more than +3%, and Microchip Technology (MCHP) and Texas Instruments (TXN) closed up more than +2%.  In addition, Lam Research (LRCX), Qualcomm (QCOM), Micron Technology (MU), and ON Semiconductor Corp (ON) closed up more than +1%. 

Airline stocks moved higher on Wednesday amid speculation that air travel will return to normal once the government shutdown ends.  Also, United Airlines Holdings (UAL) closed up more than +5% after Moody’s Ratings upgraded the company’s long-term corporate family rating to Ba1 from Ba2.  In addition, Delta Air Lines (DAL) closed up more than +4% after CEO Bastian said Thanksgiving holiday travel should be “great” and demand from foreign travelers is coming back.  In addition, Southwest Airlines (LUV) closed up more than +4%, and American Airlines Group (AAL) and Alaska Air Group (ALK) closed up more than +3%.  

Weakness in the Magnificent Seven technology stocks is a drag on the overall market.  Tesla (TSLA) and Meta Platforms (META) closed down more than -2%.  Also, Amazon.com (AMZN) and Alphabet (GOOGL) closed down more than -1%.  In addition, Apple (AAPL) closed down -0.70%.  However, Microsoft (MSFT) bucked the trend, closing up +0.48%, and Nvidia (NVDA) closed up +0.33%. 

Energy producers and energy service providers moved lower on Wednesday after the price of WTI crude oil fell more than -4% to a 3-week low.  Halliburton (HAL) closed down more than -4% and APA Corp (APA), Baker Hughes (BKR), and Phillips 66 (PSX) closed down more than -2%.  Also, Chevron (CVX), Diamondback Energy (FANG), ConocoPhillips (COP), Exxon Mobil (XOM), Valero Energy (VLO), and Marathon Petroleum (MPC) closed down more than -1%. 

On Holding (ONON) closed up more than +17% after boosting its full-year adjusted Ebitda margin to above 18% from a previous forecast of 17% to 17.5%, stronger than the consensus of 17.5%. 

Bill Holdings Inc. (BILL) closed up more than +11% as the company is under pressure from activist investor Starboard Value LP to explore options to boost value in the stock, including a potential sale. 

Clearwater Analytics Holdings (CWAN) closed up more than +7% after it said it was considering a potential sale after receiving takeover interest. 

Oklo Inc (OKLO) closed up more than +6% after analysts said they see the company’s US Department of Energy Nuclear Safety Design Agreement approval accelerating the licensing process. 

Floor & Decor Holdings (FND) closed up more than +3% after Piper Sandler upgraded the stock to overweight from neutral with a price target of $80. 

AutoNation (AN) closed up more than +1% after Barclays initiated coverage on the stock with a recommendation of overweight and a price target of $250.

SM Energy (SM) closed down more than -5% after Siebert Williams Shank downgraded the stock to hold from buy.

Fortinet (FTNT) closed down more than -1% after Daiwa Securities downgraded the stock to neutral from outperform.

Earnings Reports(11/13/2025)

Applied Materials Inc (AMAT), Globant SA (GLOB), NIQ Global Intelligence Plc (NIQ), NU Holdings Ltd/Cayman Islands (NU), Walt Disney Co/The (DIS).