Stocks Climb on Strength in Chip Makers and Energy Producers

The S&P 500 Index ($SPX) (SPY) today is up by +0.39%, the Dow Jones Industrials Index ($DOWI) (DIA) is up by +0.61%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up by +0.46%.  December E-mini S&P futures (ESZ25) are up +0.35%, and December E-mini Nasdaq futures (NQZ25) are up +0.43%.

Stock indexes are moving higher today, with the S&P 500, the Dow Jones Industrials, and the Nasdaq 100 posting 2-week highs.  Strength in semiconductor stocks today is supporting gains in the overall market.  Also, energy producers are climbing today, with WTI crude up more than 1% to a 1-week high. 

Trading activity was lighter than normal today after a technical outage at the Chicago Mercantile Exchange (CME) disrupted trading.  CME futures and options markets resumed trading at 8:30 AM today after being shut since Thursday evening due to a data-center fault. According to CyrusOne, the malfunction was caused by cooling system problems at a data center in Aurora, Illinois. Market activity today was already expected to be subdued, with only half a day of trading in US equity markets after Thursday’s Thanksgiving holiday. 

Optimism about a Fed rate cut has boosted stocks this week. 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 84% from 30% last week.

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 84% 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 are higher today.  The Euro Stoxx 50 rose to a 1.5-week high and is up +0.37%.  China’s Shanghai Composite closed up +0.34%.  Japan’s Nikkei Stock 225 closed up +0.17%.

Interest Rates

December 10-year T-notes (ZNZ5) today are down -5 ticks.  The 10-year T-note yield is up +2.9 bp to 4.025%.  T-notes gave up an early advance today and turned lower, and the 10-year T-note yield rebounded from a 1-month of 3.960% and moved higher, as strength in stocks undercut safe-haven demand for T-notes.  Also, today’s +1% rally in WTI crude oil to a 1-week high has boosted inflation expectations, a bearish factor for T-notes. 

T-notes initially moved higher today due to optimism that the Fed will cut interest rates at next month’s FOMC meeting, as the chances of a 25 bp rate cut to the fed funds target range have risen to 84% from 30% last week.  Trading volume in Treasury futures is subdued as trading resumed this morning after being down since Thursday evening due to a technical outage at the CME.

European government bond yields are moving higher today.  The 10-year German bund yield is up +1.5 bp to 2.695%. The 10-year UK gilt yield is up +0.1 bp to 4.451%.

Eurozone Oct 1-year inflation expectations unexpectedly increased to +2.8% from 2.7% in Sep, stronger than expectations of an easing to 2.6%.  Oct 3-year expectations remained unchanged at 2.5%, right on expectations.

German Oct retail sales unexpectedly fell -0.3% m/m, weaker than expectations of an increase of +0.2% m/m.

German Nov CPI (EU harmonized) rose +2.6% y/y, stronger than expectations of +2.4% y/y and the fastest pace of increase in 9 months.

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

Strength in chip makers today is a supportive factor for the overall market.  Intel (INTC) is up more than +7% to lead gainers in the S&P 500 and Nasdaq 100.  Also, Analog Devices (ADI) and Micron Technology (MU) are up more than +2%.  In addition, Microchip Technology (MCHP), Texas Instruments (TXN), ARM Holdings Plc (ARM), and Marvell Technology (MRVL) are up more than +1%. 

Energy producers and energy service providers are climbing today, with WTI crude rising to a 1-week high.  Devon Energy (DVN), ConocoPhillips (COP), and Halliburton (HAL) are up more than +2%.  Also, Baker Hughes (BKR), Diamondback Energy (FANG), Marathon Petroleum (MPC), Valero Energy (VLO), Phillips 66 (PSX), Chevron (CVX), and Occidental Petroleum (OXY) are up more than +1%. 

Cryptocurrency-exposed stocks are moving higher today, with Bitcoin (^BTCUSD) up by more than +1% to a 1-week high. Riot Platforms (RIOT) is up more than +10% and MARA Holdings (MARA) is up more than +7%.  Also, Strategy (MSTR) and Coinbase Global (COIN) are up more than +4%, and Galaxy Digital Holdings (GLXY) is up more than +2%. 

SanDisk Corp (SNDK) is up more than +1% after Nikkan Kogyo reported that Japan and the US are considering building a NAND flash memory plant in the US through a public partnership with Kioxia Holdings and SanDisk, seen as the main investors.

Oracle (ORCL) is down more than -1% after Morgan Stanley warned that the company’s borrowing binge to finance its AI ambitions threatens its credit rating.   

Earnings Reports(11/28/2025)

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