Stocks Settle Higher Before Nvidia Earnings

The S&P 500 Index ($SPX) (SPY) on Wednesday closed up by +0.38%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up by +0.10%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +0.56%.  December E-mini S&P futures (ESZ25) rose +0.39%, and December E-mini Nasdaq futures (NQZ25) rose +0.58%.

US stock indexes settled higher on Wednesday as they recovered some of this week’s sharp losses.  Nvidia rose more than +2% ahead of its earnings results after Wednesday’s close.  Nvidia’s earnings are seen as a bellwether for whether lofty valuations for tech stocks and massive capital spending in artificial intelligence remain justified. 

Alphabet rose +3% to lead megacap tech stocks higher after Google debuted an updated version of its artificial intelligence model, Gemini, that executives said represents a “massive jump” in reasoning and coding ability.  Also, strength in chip makers supported gains in the broader market.

Limiting gains in the overall market was weakness in energy producers, as WTI crude oil prices are down by more than 2%. 

Stock indexes fell from their best levels on Wednesday as Fed rate-cut expectations faded after the Bureau of Labor Statistics (BLS) canceled publication of the Oct employment report, which removes key data before next month's FOMC meeting and lowers the chances of a Fed rate cut. The November employment report, which will include the October figures, will be published on December 16, after the December 9-10 FOMC meeting.  The chance for a Fed rate cut at next month’s FOMC meeting fell to 30% on Wednesday from 70% last week.

The minutes of the October 28-29 FOMC meeting were hawkish as "many" officials said it would likely be appropriate to keep interest rate steady for the remainder of 2025.

US MBA mortgage applications fell -5.2% in the week ended November 14, with the purchase mortgage sub-index down -2.3% and the refinancing sub-index down -7.3%.  The average 30-year fixed rate mortgage rose +3 bp to 6.37% from 6.34% in the prior week.

The US Aug trade deficit shrank to -$59.6 billion from -$78.2 billion in July, narrower than expectations of -$60.4 billion.

This week’s US economic schedule is very heavy as a deluge of delayed economic reports will be released.  Thursday brings weekly unemployment claims, the Sep unemployment report, the Philadelphia Fed report, Oct existing home sales, and the Kansas City Fed manufacturing survey.  Friday brings real earnings, the S&P US manufacturing and services PMI reports, the University of Michigan’s US consumer sentiment index, and the Kansas City Fed’s services activity report.  The Bureau of Labor Statistics said today that it will not publish an October employment report and noted it will incorporate those payroll figures into the November report set to be published on December 16.  Other delayed US economic reports are also expected to be released in the coming days, but have not yet been scheduled.

The markets are discounting a 30% chance of another -25 bp rate cut at the next FOMC meeting on December 9-10.

Q3 corporate earnings season is drawing to a close as 460 of the 500 S&P companies have released 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 recovered from a 1-month low and closed up +0.13%.  China’s Shanghai Composite closed up +0.18%.  Japan’s Nikkei Stock 225 dropped to a 1-month low and closed down by -0.34%.

Interest Rates

December 10-year T-notes (ZNZ5) on Wednesday closed down by -3 ticks.  The 10-year T-note yield rose +1.8 bp to 4.131%.  T-note prices were under pressure on Wednesday as strength in stocks curbed some safe-haven demand for government debt.  Also, Wednesday’s action by the BLS to cancel the publication of the Oct employment report is bearish for T-notes as it removes key data before next month's FOMC meeting and lowers the chances of a Fed rate cut.  T-note prices fell to their lows on Wednesday afternoon on the hawkish minutes of the October 28-29 FOMC meeting that stated “many“ policymakers favored keeping interest rates steady the remainder of the year.  Finally, weak demand for the Treasury’s $16 billion auction of 20-year T-bonds was negative for T-notes as the auction had a bid-to-cover ratio of 2.41, well below the 10-auction average of 2.65.

European government bond yields moved higher on Wednesday.  The 10-year German bund yield rose +0.5 bp to 2.711%. The 10-year UK gilt yield rose to a 5-week high of 4.619% and finished up +4.9 bp at 4.602%.

UK Oct CPI eased to +3.6% y/y from +3.8% y/y in Sep.  Oct core CPI eased to +3.4% y/y from +3.5% y/y in Sep.

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

Strength in semiconductor stocks on Wednesday was a supportive factor for the broader market.  Broadcom (AVGO), Lam Research (LRCX), Applied Materials (AMAT), and KLA Corp (KLAC) closed up more than +4%.  Also, Marvell Technology (MRVL) and ASML Holding NV (ASML) closed up more than +3%.  In addition, Nvidia (NVDA) and Intel (INTC) closed up more than +2%, and Analog Devices (ADI) and ON Semiconductor (ON) closed up more than +1% 

Energy producers and energy service providers retreated on Wednesday after WTI crude oil prices fell by more than -2%.  APA Corp (APA) closed down more than -3%.  Also, Valero Energy (VLO), Phillips 66 (PSX), Occidental Petroleum (OXY), and Marathon Petroleum (MPC) closed down more than -2%.  In addition, ConocoPhillips (COP), Devon Energy (DVN),  Halliburton (HAL), ExxonMobil (XOM), and Chevron (CVX) closed down more than -1%.

Crypto stocks tumbled on Wednesday as the price of Bitcoin (^BTCUSD) fell more than -3% to a 6.75-month low.  Strategy (MSTR) closed down more than -9% to lead losers in the Nasdaq 100, and MARA Holdings (MARA) closed down more than -6%.  Also, Riot Platforms (RIOT) closed down more than -4% and Coinbase Global (COIN) closed down more than -1%.

Block Inc (XYZ) closed up more than +7% to lead gainers in the S&P 500 after saying it expects gross profit to grow in the mid-teens range through 2028, and to reach $15.8 billion.  The company also boosted its share repurchase program by $5 billion.

GE Vernova (GEV) closed up more than +7% after securing its first international onshore wind repower upgrade contract through Taiwan Power Company. 

Constellation Energy (CEG) closed up more than +5% to lead gainers in the Nasdaq 100 as it plans to restart its Three Mile Island nuclear plant and is getting $1 billion in backing from the US government as the Trump administration pushes to add more atomic power to the electric grid. 

Alphabet (GOOGL) closed up +3% after Google debuted an updated version of its artificial intelligence model, Gemini, that executives said represents a “massive jump” in reasoning and coding ability.

La-Z-Boy Inc (LZB) closed up more than +20% after announcing Q2 sales of $522.5 million, stronger than the consensus of $517.7 million.

Dycom Industries (DY) closed up more than +10% after signing an agreement to acquire Power Solutions LLC, one of the Mid-Atlantic’s largest electrical contractors serving data centers, for $1.95 billion. 

MP Materials (MP) closed up more than +9% after Goldman Sachs initiated coverage of the stock with a recommendation of buy and a price target of $77. 

Unity Software (U) closed up more than +6% after announcing it is working with Epic Games to bring Unity games into Fortnite. 

Lowe’s (LOW) closed up more than +4% after raising its 2026 total sales forecast to $86.0 billion from a previous forecast of $84.5 billion-$85.5 billion, above the consensus of $85.36 billion.   

Agios Pharmaceuticals (AGIO) closed down more than -50% after a Phase 3 trial of mitapivat in patients 16 and older with sickle cell disease met one primary endpoint but missed another. 

Eversource Energy (ES) closed down more than -12% to lead losers in the S&P 500 after its request to sell its subsidiary, Aquarion Water Company, was rejected by Connecticut regulators.

QuantumScape Corp (QS) closed down more than -3% after HSBC downgraded the stock to reduce from hold with a price target of $10.50.

Boeing (BA) closed down more than -2% after Flydubai announced an offer to buy 250 jets from Airbus SE, its first order ever with the company, and a blow to Boeing, which had been the sole aircraft provider to the airline. 

Iron Mountain (IRM) closed down more than 2% after Gotham City Research said it has a short position in the stock and that the company is worth no more than $22-$40 a share.

Gitlab Inc (GTLB) closed down more than -1% after Truist Securities downgraded the stock to hold from buy.

Earnings Reports(11/20/2025)

Bath & Body Works Inc (BBWI), Copart Inc (CPRT), Elastic NV (ESTC), Gap Inc/The (GAP), Intuit Inc (INTU), Jacobs Solutions Inc (J), Post Holdings Inc (POST), Ross Stores Inc (ROST), UGI Corp (UGI), Veeva Systems Inc (VEEV), Walmart Inc (WMT).