Stocks Set to Open Lower as Bond Yields Climb, U.S. PCE Inflation Data Awaited

December S&P 500 E-Mini futures (ESZ25) are down -0.57%, and December Nasdaq 100 E-Mini futures (NQZ25) are down -0.68% this morning, pointing to a lower open on Wall Street as Treasury yields climbed following hawkish comments from Bank of Japan Governor Kazuo Ueda.

Treasury yields tracked Japanese government bond yields higher after BOJ Governor Kazuo Ueda offered his strongest signal yet of a rate hike this month. Ueda said on Monday that the central bank “will consider the pros and cons of raising the policy interest rate and make decisions as appropriate” by assessing the economy, inflation, and financial markets both domestically and overseas. Ueda’s remarks prompted investors to shift away from risky assets.

Investor focus this week is on a fresh batch of U.S. economic data, with particular attention on the long-delayed U.S. PCE inflation reading, as well as earnings reports from several high-profile companies.

In Friday’s trading session, Wall Street’s major equity averages closed higher, with the S&P 500, Dow, and Nasdaq 100 notching 2-week highs. Chip stocks climbed, with Intel (INTC) jumping over +10% to lead gainers in the S&P 500 and Nasdaq 100, and Analog Devices (ADI) rising more than +2%. Also, energy stocks gained ground after the price of WTI crude rose over +1%, with Diamondback Energy (FANG) advancing over +2% and Devon Energy (DVN) rising more than +1%. In addition, cryptocurrency-exposed stocks rose after Bitcoin rebounded past the $90,000 level, with Riot Platforms (RIOT) surging over +7% and MARA Holdings (MARA) climbing more than +6%. On the bearish side, Tilray (TLRY) tumbled over -21% after the cannabis company announced it would implement a one-for-ten reverse stock split, effective Monday.

This week, the September reading of the U.S. core personal consumption expenditures price index, the Fed’s preferred inflation gauge, will be the main highlight. The Bureau of Economic Analysis will release the long-delayed PCE price data, along with personal income and spending figures, on Friday. “[Recent] soft core CPI and PPI reports suggest that tariffs continue to have more bark than bite with regard to inflation, and this should also be reflected in this week’s September core PCE deflator,” according to ING economist James Knightley. Other noteworthy data releases include ADP private employment figures, the Export Price Index, the Import Price Index, the S&P Global Services PMI, the ISM Non-Manufacturing PMI, Initial Jobless Claims, Consumer Credit, and the University of Michigan’s Consumer Sentiment Index (preliminary). The Fed is also set to publish industrial production data for September. Any indications of labor-market weakness or slowing economic activity would further bolster expectations for a Fed rate cut this month.

U.S. rate futures have priced in an 87.6% chance of a 25 basis point rate cut and a 12.4% chance of no rate change at the conclusion of the Fed’s December meeting.

Meanwhile, U.S. President Donald Trump said on Sunday he has made his choice for the next Fed chair after signaling clearly that he expects his nominee to deliver interest rate cuts. “I know who I am going to pick, yeah,” Trump told reporters on Air Force One, without giving a name. “We’ll be announcing it.”

Investors will also turn their attention to earnings releases from several high-profile names. Prominent companies such as Salesforce (CRM), CrowdStrike Holdings (CRWD), Marvell Technology (MRVL), Snowflake (SNOW), Hewlett Packard Enterprise (HPE), and MongoDB (MDB) are scheduled to report their quarterly results this week.

U.S. central bankers are in a media blackout period before the December 9-10 policy meeting, so they are prohibited from making public comments on the economic outlook or policy this week. Fed policy limits the extent to which FOMC participants and staff can speak publicly or grant interviews during Fed blackout periods.

Today, investors will focus on the U.S. ISM Manufacturing PMI and the S&P Global Manufacturing PMI data, set to be released in a couple of hours. Economists expect the November ISM manufacturing index to be 49.0 and the S&P Global manufacturing PMI to be 51.9, compared to the previous values of 48.7 and 52.5, respectively.

Also, Fed Chair Jerome Powell is scheduled to deliver brief remarks and join a panel discussion with Michael Boskin and Condoleezza Rice on George Shultz and his economic policy contributions later today at the Hoover Institution’s George P. Shultz Memorial Lecture Series in Stanford, California.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.041%, up +0.52%.

The Euro Stoxx 50 Index is down -0.30% this morning, kicking off the year’s final month on a cautious note. Industrial stocks underperformed on Monday, with Airbus SE (AIR.FP) sliding over -3% after the planemaker recalled 6,000 jets and ordered immediate repairs over a software issue. Defense stocks also sank after U.S. and Ukrainian officials held “productive” talks on Sunday regarding a potential Russia-Ukraine peace agreement. U.S. Special Envoy Steve Witkoff is set to travel to Moscow this week for talks with President Vladimir Putin and other Kremlin officials. Limiting losses, mining stocks gained ground. Meanwhile, a survey released on Monday showed that Eurozone manufacturing activity fell back into contraction in November as softening demand pushed companies to cut jobs at the fastest pace in seven months. Investor focus this week is on the Eurozone’s preliminary inflation data for November. “Will price pressures ease, giving the European Central Bank room for further interest rate cuts in December?” DZ Bank analysts ask. Still, money markets nearly completely dismiss this scenario. In other corporate news, Vivendi SE (VIV.FP) fell more than -2% after Kepler Cheuvreux downgraded the stock to Hold from Buy.

Eurozone’s Manufacturing PMI data was released today.

Eurozone’s November Manufacturing PMI came in at 49.6, weaker than expectations of 49.8.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.65%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.89%.

China’s Shanghai Composite Index closed higher today as investors shrugged off downbeat economic data from the country. Non-ferrous metal and AI-related stocks led the gains on Monday. Meanwhile, stablecoin-linked stocks tumbled in Hong Kong after China’s central bank pledged to crack down on virtual currencies and raised fresh concerns about stablecoins. Data from the National Bureau of Statistics released on Sunday showed that China’s manufacturing activity improved but stayed in contraction in November, marking a record stretch of declines as the nation’s economic slowdown deepens. Separately, China’s non-manufacturing PMI, which covers services and construction, unexpectedly slipped into contraction in November for the first time in almost three years, pressured by weakness in the real estate and residential services sectors. In addition, a private gauge of China’s manufacturing sector contracted slightly in November as production growth stalled and new orders lost momentum. Barclays said in a research note that the readings signal further weakening in domestic demand, projecting China’s GDP growth to slow to roughly 4% in Q4. This underscores the challenge for policymakers in deciding whether to push forward with tough structural reforms or introduce additional stimulus to support domestic demand. Investor attention now turns to the Politburo meeting and the Central Economic Work Conference later this month. China’s leadership is expected to outline key policy priorities for the world’s second-largest economy in 2026 and may signal whether additional stimulus is on the horizon. In corporate news, Xiaomi fell over -1% in Hong Kong after the company reported November electric-vehicle deliveries that came in below expectations.

The Chinese November Manufacturing PMI stood at 49.2, in line with expectations.

The Chinese November Non-Manufacturing PMI came in at 49.5, weaker than expectations of 50.0.

The Chinese November RatingDog Manufacturing PMI arrived at 49.9, weaker than expectations of 50.5.

Japan’s Nikkei 225 Stock Index closed sharply lower today as government bond yields climbed and the yen strengthened after Bank of Japan Governor Kazuo Ueda offered his strongest signal yet of a rate hike this month. Chip and real estate stocks led the declines on Monday. Gov. Kazuo Ueda said on Monday that the central bank “will consider the pros and cons of raising the policy interest rate and make decisions as appropriate” by assessing the economy, inflation, and financial markets both domestically and overseas. “Uncertainties surrounding U.S. tariff policy and the U.S. economy, which we had been particularly monitoring, have significantly declined compared to a few months ago,” Ueda said. He noted that this heightens the BOJ’s attention on developments heading into next year’s shunto, referring to the annual wage talks that play a crucial role in setting pay increases for Japanese workers. He added that any rate increase would amount to a tweak in the level of monetary easing and that raising rates at a measured pace wouldn’t risk stalling Japan’s economy. On the economic front, government data released on Monday showed that Japanese corporate spending on factories and equipment slowed in the third quarter, yet continued to support domestic demand. Separately, a private-sector survey showed that Japan’s manufacturing activity contracted for a fifth straight month in November amid weak demand, though the outlook saw a modest improvement. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +8.95% to 30.08.

The Japanese Capital Spending rose +2.9% y/y in the third quarter, weaker than expectations of +5.9% y/y.

The Japanese November au Jibun Bank Manufacturing PMI was revised slightly lower to 48.7 from the preliminary reading of 48.8.

Pre-Market U.S. Stock Movers

The Magnificent Seven stocks are moving lower in pre-market trading, with Tesla (TSLA) and Meta Platforms (META) falling over -1%.

Chip stocks retreated in pre-market trading, with Marvell Technology (MRVL) and Advanced Micro Devices (AMD) dropping more than -1%.

Cryptocurrency-exposed stocks slumped in pre-market trading, with the price of Bitcoin down more than -5%. Strategy (MSTR) is down more than -5%. Also, MARA Holdings (MARA) is down over -6%, and Coinbase (COIN) is down more than -4%.

Zscaler (ZS) fell more than -1% in pre-market trading after Bernstein downgraded the stock to Market Perform from Outperform.

New Fortress Energy (NFE) surged over +23% in pre-market trading after regulators in Puerto Rico said late Friday that they had given preliminary approval to a contract with the troubled liquefied natural gas supplier.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - December 1st

Credo Technology Holding (CRDO), MongoDB (MDB), Hafnia (HAFN), Vestis (VSTS), Simulations Plus (SLP).