Stocks Muted Before the Open as Investors Weigh Fed Rate Outlook After U.S. Reopens

December S&P 500 E-Mini futures (ESZ25) are down -0.05%, and December Nasdaq 100 E-Mini futures (NQZ25) are down -0.08% this morning as investors weigh the outlook for the Federal Reserve’s interest rate path following the end of the longest government shutdown in U.S. history.

U.S. President Donald Trump signed a spending bill to reopen the government late Wednesday, a measure passed by the Republican-controlled House after a record-long 43-day shutdown. The legislation cleared the House on a 222 to 209 vote, largely along party lines. The package extends federal government funding through January 30th and includes full-year funding for the Department of Agriculture, military construction, and the legislative branch. It will ensure that federal employees, including air-traffic controllers, receive their pay and return hundreds of thousands of furloughed government workers to their jobs.

In yesterday’s trading session, Wall Street’s major indices ended mixed, with the Dow notching a new all-time high. Advanced Micro Devices (AMD) climbed +9% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after forecasting faster sales growth over the next five years, fueled by strong demand for its data center products. Also, On Holding (ONON) jumped about +18% after the company posted upbeat Q3 results and raised its full-year guidance for revenue growth and adjusted EBITDA margin. In addition, BILL Holdings (BILL) surged over +11% after Bloomberg reported that the business-payments company was exploring options, including a potential sale. On the bearish side, most members of the Magnificent Seven stocks fell, with Meta Platforms (META) and Tesla (TSLA) sliding more than -2%.

The government reopening removes one source of investor uncertainty, paving the way for the release of delayed economic data, including the September jobs report, as early as next week. The data will be critical in shaping rate-cut expectations ahead of the Fed’s December meeting. Still, White House Press Secretary Karoline Leavitt said on Wednesday that the October jobs and inflation reports are “likely never” to be published because of the shutdown. “All of that economic data released will be permanently impaired, leaving our policymakers at the Fed flying blind at a critical period,” Leavitt told reporters.

Fed officials remain divided over which risk is more pressing—inflation or the weakening labor market. Boston Fed President Susan Collins said on Wednesday she favored keeping rates unchanged, given still-solid growth that could slow or hinder progress in bringing down inflation. Also, Atlanta Fed President Raphael Bostic stated that inflation remains the bigger risk to the economy and that he prefers keeping rates unchanged until it’s clear the central bank is on track to achieve its 2% target. “Despite shifts in the labor market, the clearer and urgent risk is still price stability,” Bostic said. At the same time, Fed Governor Stephen Miran reiterated that U.S. monetary policy is overly restrictive, arguing that easing housing inflation is helping to reduce overall price pressures.

Meanwhile, U.S. rate futures have priced in a 53.9% probability of a 25 basis point rate cut and a 46.1% chance of no rate change at the next FOMC meeting in December.

Today, market participants will hear perspectives from San Francisco Fed President Mary Daly, Minneapolis Fed President Neel Kashkari, St. Louis Fed President Alberto Musalem, and Cleveland Fed President Beth Hammack. 

On the economic front, investors will focus on the EIA’s weekly crude oil inventories report, set to be released in a couple of hours. Economists expect this figure to be 1.0 million barrels, compared to last week’s value of 5.2 million barrels.

On the earnings front, prominent companies like Walt Disney (DIS) and Applied Materials (AMAT) are scheduled to report their quarterly figures today. According to Bloomberg Intelligence, S&P 500 companies are on track to post a +14.6% increase in Q3 profits from a year earlier, nearly twice the level analysts had projected.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.072%, up +0.17%.

The Euro Stoxx 50 Index is up +0.26% this morning, hitting a new record high. Technology stocks led the gains on Thursday as a robust AI-backed forecast from Cisco encouraged investors to rotate back into the sector. Economic data released on Thursday were mixed. Eurostat reported that the Eurozone’s monthly industrial production edged back into slow growth in September, signaling modest resilience amid trade uncertainty. Separately, preliminary data from the Office for National Statistics showed that the U.K.’s economic growth nearly stalled in the third quarter amid uncertainty over the government’s budget plans and the impact of higher U.S. tariffs. Economists said the data likely set the stage for a December rate cut by the Bank of England. “These disappointing figures pave the way for a December interest-rate cut by fueling fears over economic conditions sufficiently enough to push a majority of rate-setters to authorize another policy loosening,” according to ICAEW economics director Suren Thiru. Investors also digested a slew of corporate earnings reports. Alk-Abello A/S (ALKB.C.DX) jumped over +10% after the Danish allergy solutions maker raised its full-year guidance. Also, Delivery Hero SE (DHER.D.DX) climbed more than +7% after the German online takeaway food company said it anticipates growth to accelerate in the current quarter. At the same time, Siemens AG (SIE.D.DX) slid over -4% after the engineering company posted weaker-than-expected FQ4 profit.

U.K. GDP (preliminary) and Eurozone’s Industrial Production data were released today.

U.K. GDP has been reported at +0.1% q/q and +1.3% y/y in the third quarter, compared to expectations of +0.2% q/q and +1.3% y/y.

U.K. September GDP fell -0.1% m/m and rose +1.1% y/y, weaker than expectations of no change m/m and +1.4% y/y.

Eurozone’s September Industrial Production rose +0.2% m/m and +1.2% y/y, weaker than expectations of +0.7% m/m and +2.1% y/y.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.73%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.43%.

China’s Shanghai Composite Index closed higher and hit a fresh 10-year high today, led by gains in the new energy sector, while investors awaited a slew of key economic data from the country. New energy stocks jumped on Thursday after a senior official at China’s Ministry of Industry and Information Technology said the ministry will unveil a comprehensive plan to boost the new energy battery sector and expand its infrastructure usage. Also buoying sentiment in the sector was Contemporary Amperex Technology’s deal with an energy-storage system maker. Beijing Hyperstrong Technology said it had secured an order for 200 gigawatt hours of energy-storage system batteries from the company. Meanwhile, investors are shifting their focus to China’s October activity data, including retail sales and industrial production, due Friday, which will provide insight into the economy’s momentum at the start of the final quarter of the year. Economists anticipate that the data will likely highlight continued weakness in domestic demand. A major shopping event in China, Singles’ Day, an unofficial anti-Valentine’s Day holiday held on November 11th, saw sales improve, though not enough to ease worries that weak consumer spending will continue to weigh on the economy. Still, the People’s Bank of China on Tuesday signaled a less dovish stance in its third-quarter monetary policy report than in the previous report released in August, suggesting that monetary policy easing is likely to be delayed. In corporate news, Alibaba rose over +3% in Hong Kong after Bloomberg News reported that the company is preparing to overhaul its flagship AI app to make it more similar to ChatGPT.

Japan’s Nikkei 225 Stock Index closed higher today as optimism over the end of the U.S. government shutdown boosted sentiment. Metals and financial stocks led the gains on Thursday. Data released on Thursday showed that Japan’s wholesale prices rose more than anticipated in October as the cost of rice and other food items remained stubbornly high. Analysts said wholesale inflation is likely to ease in the coming months, though renewed yen weakness could raise import costs and keep prices elevated. Meanwhile, the yen slipped to its weakest level in nine months against the dollar overnight after the first face-to-face meeting between Prime Minister Sanae Takaichi and Bank of Japan Governor Kazuo Ueda dampened expectations of an imminent interest rate hike. Takaichi on Wednesday signaled her administration’s preference for interest rates to stay low and called for close coordination with the BOJ. “We will continue to request that the Bank of Japan Governor provide regular reports to this Council on Economic and Fiscal Policy. The government and the BOJ will continue to work together to advance the national economy,” Takaichi said. The remarks were interpreted by some traders as an indication that any move by the BOJ will be delayed further. On Thursday, Ueda indicated that his goals were aligned with the government’s push to reflate growth, telling parliament he was targeting moderate inflation supported by wage growth. In other news, foreign investors offloaded a net 347.3 billion yen worth of Japanese stocks in the week through November 8th amid a global tech selloff, marking the first week of net selling since September 27th. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.88% to 27.49.

The Japanese October PPI rose +2.7% y/y, stronger than expectations of +2.5% y/y.

Pre-Market U.S. Stock Movers

Memory-chip stocks slumped in pre-market trading after Japan’s Kioxia reported disappointing results, with SanDisk (SNDK) sliding over -4% and Western Digital (WDC) falling more than -3%.

Dollar Tree (DLTR) dropped about -3% in pre-market trading after Goldman Sachs double-downgraded the stock to Sell from Buy with a price target of $103.

Cisco Systems (CSCO) climbed over +6% in pre-market trading after the networking-equipment company posted better-than-expected FQ1 results and raised its full-year guidance.

Sealed Air (SEE) jumped more than +20% in pre-market trading after the Wall Street Journal reported that Clayton Dubilier & Rice was in talks to take the company private.

Nike (NKE) gained over +2% in pre-market trading after Wells Fargo upgraded the stock to Overweight from Equal Weight with a price target of $75.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - November 13th

Walt Disney (DIS), Applied Materials (AMAT), Brookfield (BN), Nu Holdings (NU), Credicorp (BAP), JBS NV (JBS), Stantec (STN), Bilibili (BILI), Figure Technology (FIGR), Energy of Minas Gerais (CIG), South Bow (SOBO), Alliance Laundry (ALH), Inter and Co A (INTR), NIQ Global Intelligence (NIQ), Accelerant Holdings (ARX), Globant SA (GLOB), TMC the metals company (TMC), Sharplink Gaming (SBET), Canadian Solar Inc (CSIQ), Ondas (ONDS), Bitfarms (BITF), Sally Beauty (SBH), Trevi Therapeutics (TRVI), Afya (AFYA), Spectrum Brands (SPB), National Energy Services (NESR), Suburban Propane Partners LP (SPH), Jefferson Capital (JCAP), Evolv Technologies Holdings (EVLV), Precigen (PGEN), Newsmax (NMAX), Ballard (BLDP), Red Cat Holdings (RCAT), WhiteFiber (WYFI).