Stock Indexes Push Higher on Strength in Chip Makers

The S&P 500 Index ($SPX) (SPY) today is up by +0.45%, the Dow Jones Industrials Index ($DOWI) (DIA) is up by +0.44%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up by +0.93%.  December E-mini S&P futures (ESZ25) are up +0.45%, and December E-mini Nasdaq futures (NQZ25) are up +1.02%.

Stock indexes are moving higher today, with the Nasdaq 100 posting a 1.5-week high.  Strength in chip stocks is supporting gains in the broader market today.  Also, some better-than-expected earnings results are boosting technology stocks.  MongoDB is up more than +24% after reporting stronger-than-expected Q3 EPS, and Credo Technology Group Holding is up more than +15% after reporting stronger-than-expected Q2 revenue.  In addition, Boeing is up more than +8% after CFO Malave said he expects positive free cash flow to reach the ”low-single digits” next year.

Limiting gains in stocks are higher bond yields as the 10-year T-note yield ticked up to a 1.5-week high of 4.11%. 

The Organization for Economic Co-operation and Development (OECD) kept its global 2025 GDP forecast unchanged at +3.2%, but raised its US 2025 GDP forecast to +2.0% from a previous estimate of +1.8%, and its Eurozone 2025 GDP forecast to +1.3% from +1.2%.  The OECD said the global economy is weathering trade tariffs better than expected due to strong investment in artificial intelligence and supportive fiscal and monetary policies.

Market attention this week will focus on the US economic news. On Wednesday, the Nov ADP employment change is expected to increase by +10,000.  Also, Sep manufacturing production is expected to rise by +0.1% m/m, and the Nov ISM services index is expected to fall by -0.4 to 52.0.  On Thursday, initial weekly unemployment claims are expected to rise by +6,000 to 222,000.  On Friday, Sep personal spending is expected to increase by +0.3% and Sep personal income is expected to climb +0.3% m/m.  Also on Friday, the Sep core PCE price index, the Fed’s preferred inflation measure, is expected to climb by +0.2% m/m and +2.8% y/y. Finally, the University of Michigan's Dec consumer sentiment index is expected to climb by +1.0 to 52.0.   

The markets are discounting a 92% 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 mixed today.  The Euro Stoxx 50 climbed to a 2-week high and is up +0.51%.  China’s Shanghai Composite closed down -0.42%.  Japan’s Nikkei Stock 225 closed unchanged.

Interest Rates

March 10-year T-notes (ZNH6) today are down -2 ticks.  The 10-year T-note yield is up +1.2 bp at 4.098%.  March T-notes slid to a 1.5-week low today, and the 10-year T-note yield climbed to a 1.5-week high of 4.114%.  T-notes are under pressure from a slump in 10-year German bunds, which fell to a 2-month low today after Eurozone Nov CPI rose more than expected.  Also, rising inflation expectations are bearish for T-notes after the 10-year breakeven inflation rate rose to a 1.5-week high of 2.263% today.

Losses in T-notes are limited due to expectations that the Fed will cut interest rates at next week’s FOMC meeting, as the chances of a rate cut increased to 92% from 30% last week, according to swaps markets. 

European government bond yields are moving higher today.  The 10-year German bund yield climbed to a 2-month high of 2.767% and is up by +0.2 bp to 2.753%.  The 10-year UK gilt yield is up +0.1 bp to 4.482%.

Eurozone Nov CPI rose +2,2% y/y, stronger than expectations of +2.1% y/y.  Nov core CPI was unchanged from Oct at +2.4% y/y, right on expectations.

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 semiconductor stocks is a supportive factor for the overall market.  Intel (INTC) is up more than +7% to lead gainers in the Nasdaq 100 and NXP Semiconductors NV (NXPI) is up more than +3%.  Also, KLA Corp (KLAC), Applied Materials (AMAT), Nvidia (NVDA), ARM Holdings Plc (ARM), GlobalFoundries (GFS), Lam Research (LRCX), and Marvell Technology (MRVL), are up more than +2%.  In addition, Advanced Micro Devices (AMD), ASML Holding NV (ASML), and Microchip Technology (MCHP) are up more than +1%.

Weakness in energy producers and energy service providers is undercutting the broader market. Baker Hughes (BKR) is down more than -2% to lead losers in the Nasdaq 100. Also, Marathon Petroleum (MPC), Chevron (CVX), Devon Energy (DVN), Occidental Petroleum (OXY), ConocoPhillips (COP), and Exxon Mobil (XOM) are down more than -1%. 

MongoDB (MDB) is up more than +24% after reporting Q3 revenue of $628.3 million, well above the consensus of $594.8 million, and raising its 2026 revenue forecast to $2.43 billion-$2.44 billion from a previous forecast of $2.34 billion-$2.36 billion, stronger than the consensus of $2.36 billion.

Credo Technology Group Holding Ltd (CRDO) is up more than +15% after reporting Q2 adjusted EPS of 67 cents, stronger than the consensus of 49 cents. 

Boeing (BA) is up more than +8% to lead gainers in the S&P 500 and Dow Jones Industrials after CFO Malave said he expects the company to generate low-single-digit positive free cash flow in 2026. 

Teradyne (TER) is up more than +6% after Stifel upgraded the stock to buy from hold with a price target of $225.

Cloudflare (NET) is up more than +3% after Barclays initiated coverage on the stock with a recommendation of overweight and a price target of $235.

OneStream (OS) is up more than +2% after Rosenblatt Securities initiated coverage on the stock with a recommendation of buy and a price target of $26. 

Six Flags Entertainment (FUN) is up more than +2% after Truist Securities upgraded the stock to buy from hold with a price target of $23.

Dexcom (DXCM) is up more than +1% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $75.

Symbotic (SYM) is down more than -15% after Goldman Sachs downgraded the stock to sell from neutral with a price target of $47. 

Packaging Corp of America (PKG) is down more than -3% after Bloomberg Intelligence reported that surveyed managers said box demand may only rise +1.3% in December from a year earlier, down from a September forecast of +1.6% and the third month in  a row that sentiment declined from initial expectations.

Maplebear (CART) is down more than -3% after The Information reported that Amazon.com is planning a new ultrafast delivery offering for groceries in major urban areas of the US.

Procter & Gamble (PG) is down more than -2% to lead losers in the Dow Jones Industrials after CFO Schulten said US consumer weakness is likely to hit the company’s bottom line in the current quarter.

Earnings Reports(12/2/2025)

Crowdstrike Holdings Inc (CRWD), Gitlab Inc (GTLB), Marvell Technology Inc (MRVL), Okta Inc (OKTA), Pure Storage Inc (PSTG).