Tech Stocks Lead the Overall Market Higher

The S&P 500 Index ($SPX) (SPY) on Wednesday closed up by +0.69%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up by +0.67%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +0.87%.  December E-mini S&P futures (ESZ25) rose +0.70%, and December E-mini Nasdaq futures (NQZ25) rose +0.89%.

Stock indexes rallied on Wednesday, with the S&P 500 posting a 2-week high and the Dow Jones Industrials and Nasdaq 100 posting 1.5-week highs.  Strength in semiconductor stocks on Wednesday led the technology sector higher and lifted the overall market. 

Optimism about a Fed rate cut also boosted stocks heading into Thursday’s Thanksgiving Day holiday.  Market sentiment has improved this week, as bond yields have fallen amid weak US economic news and dovish Fed comments, strengthening the case for a rate cut at next month’s FOMC meeting.  The chance of a Fed rate cut at the December 9-10 FOMC meeting has risen to 80% from 30% last week.

Stocks also received support from today’s US economic news, which bolstered optimism about the economic outlook after weekly jobless claims unexpectedly fell to a 7-month low and Sep capital goods new orders, a proxy for capital spending, rose more than expected. 

US MBA mortgage applications rose +0.2% in the week ended November 21, with the purchase mortgage sub-index up +7.6% and the refinancing mortgage sub-index down -5.7%.  The average 30-year fixed rate mortgage rose +3 bp to 6.40% from 6.37% in the prior week.

US weekly initial unemployment claims unexpectedly fell -6,000 to a 7-month low of 216,000, showing a stronger labor market than expectations of an increase to 225,000.

US Sep capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose +0.9% m/m, stronger than expectations of +0.3% m/m.

The US Nov MNI Chicago PMI fell -7.5 to 36.3, weaker than expectations of 43.6 and the steepest pace of contraction in 17 months.

The Fed Beige Book was mixed as it stated, "Outlooks were largely unchanged overall, with some contacts noting an increased risk of slower activity in coming months, while some optimism was noted among manufacturers."

The Bureau of Labor Statistics (BLS) canceled its October consumer price report last Friday and said the November report will be released on December 18.  Last Wednesday, the BLS said it would not publish an October employment report and noted that it would incorporate those payroll figures into the November report, scheduled for publication on December 16. 

The markets are discounting an 80% 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 475 of the 500 S&P companies have released results.  According to Bloomberg Intelligence, 83% 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 rallied to a 1-week high and closed up +1.47%.  China’s Shanghai Composite closed down -0.15%.  Japan’s Nikkei Stock 225 closed up +1.85%.

Interest Rates

December 10-year T-notes (ZNZ5) on Wednesday closed down by -0.5 of a tick.  The 10-year T-note yield fell -0.2 bp to 3.994%.  T-notes were little changed on Wednesday as strength in stocks weighed on prices.  T-notes also came under pressure after US weekly initial unemployment claims unexpectedly fell to a 7-month low, a sign of labor market strength that is hawkish for Fed policy.  In addition, weak demand for the Treasury’s $44 billion auction of 7-year T-notes weighed on prices, as the auction had a bid-to-cover ratio of 2.46, below the 10-auction average of 2.57.  However, losses in T-notes were limited after the Nov MNI Chicago PMI fell to a 17-month low, a dovish factor for Fed policy.

European government bond yields moved lower on Wednesday.  The 10-year German bund yield fell to a 1.5-week low of 2.660% and finished down -0.1 bp to 2.671%.  The 10-year UK gilt yield fell to a 1.5-week low of 4.413% and finished down -7.1 bp to 4.423%.

ECB Governing Council member Boris Vujcic said risks to economic growth and inflation in the Eurozone are balanced, and "for the time being," interest rates are in a good place.

Swaps are discounting a 1% chance for a -25 bp rate cut by the ECB at its next policy meeting on December 18.

US Stock Movers

Strength in chip makers on Wednesday was a supportive factor for the overall market.  Marvell Technology (MRVL) closed up more than +5% and ASML Holding NV (ASML) closed up more than +4%.  Also, Advanced Micro Devices (AMD), Applied Materials (AMAT), Broadcom (AVGO), and ON Semiconductor (ON) closed up more than +3%.  In addition, Micron Technology (MU), Analog Devices (ADI), Intel (INTC), Microchip Technology (MCHP), Lam Research (LRCX), and Texas Instruments (TXN) closed up more than +2%. 

Urban Outfitters (URBN) closed up more than +12% after reporting Q3 net sales of $1.53 billion, better than the consensus of $1.49 billion.

Robinhood Markets (HOOD) closed up more than +10% to lead gainers in the S&P 500 after announcing it has bought a majority stake in LedgerX, a US-based derivatives exchange, giving Robinhood access to the prediction markets.

Oscar Health (OSCR) closed up more than +8% after Piper Sandler upgraded the stock to overweight from neutral with a price target of $25. 

Dell Technologies (DELL) closed up more than +5% after raising its 2026 revenue forecast to $112.2 billion-$112.2 billion from a previous forecast of $105 billion-$109 billion, stronger than the consensus of $107.94 billion. 

Oracle (ORCL) closed up more than +4% after Deutsche Bank said the benefits of OpenAI are not yet priced into the stock. 

Boeing (BA) closed up more than +2% to lead gainers in the Dow Jones Industrials after being awarded a $2.47 billion contract from the US Air Force for 15 additional KC-46A Pegasus tankers, and after Taiwan’s China Airlines approved buying $7.852 billion of aircraft from Boeing. 

Autodesk (ADSK) closed up more than +2% after reporting Q3 billings of $1.86 billion, above the consensus of $1.84 billion, and raising its 2025 billings estimate to $7.47 billion-$7.53 billion from a previous estimate of $7.36 billion-$7.45 billion, stronger than the consensus of $7.41 billion. 

Ambarella (AMBA) closed down more than -19% after forecasting Q4 adjusted gross margin of 59% to 60.5%, below the consensus of 60.6%. 

Nutanix (NTNX) closed down more than -17% after reporting Q1 revenue of $670.6 million, weaker than the consensus of $676.6 million, and cutting its 2026 revenue forecast to $2.82 billion-$2.86 billion from a previous forecast of $2.90 billion-$2.94 billion, well below the consensus of $2.92 billion. 

Zscaler (ZS) closed down more than -12% to lead losers in the Nasdaq 100 after forecasting 2026 revenue of $3.28 billion-$3.30 billion, only slightly above the consensus of $3.28 billion. 

Workday (WDAY) closed down more than -7% to lead losers in the S&P 500 after reporting Q3 subscription revenue of $2.24 billion, right on consensus. 

Deere & Co. (DE) closed down more than -5% after forecasting 2026 net income of $4.00 billion to $4.75 billion, well below the consensus of $5.31 billion. 

Salesforce (CRM) closed down more than -2% to lead losers in the Dow Jones Industrials after Citigroup cut its price target on the stock to $253 from $276.

HP Inc (HPQ) closed down more than -1% after forecasting 2026 adjusted EPS of $2.90 to $3.20, weaker than the consensus of $3.32. 

Earnings Reports(11/28/2025)

Compass Diversified Holdings (CODI), Nordic American Tankers Ltd (NAT), SR Bancorp Inc (SRBK).