Stocks Settle Mixed Ahead of Wednesday’s FOMC Decision

The S&P 500 Index ($SPX) (SPY) on Tuesday closed down by -0.09%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down by -0.38%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +0.16%.  December E-mini S&P futures (ESZ25) fell -0.12%, and December E-mini Nasdaq futures (NQZ25) rose +0.10%.

Stock indexes gave up early gains and settled mixed on Tuesday as bond yields climbed after the Oct JOLTS report showed job openings unexpectedly rose to a 5-month high.  The market remains cautious about the pace of Fed easing beyond Wednesday’s decision, when the Fed is expected to cut interest rates by 25 bp.  The 10-year T-note yield rose +2 bp to 4.18%.

US Oct JOLTS job openings unexpectedly rose by +12,000 to a 5-month high of 7.670 million, showing a stronger labor market than expectations of a decline to 7.117 million.

US Sep leading indicators fell -0.3% m/m, right on expectations.

The markets this week will focus on government reports and the FOMC meeting.  On Wednesday, the Q3 employment cost index is expected to climb by +0.9%.  The results of the Tue/Wed FOMC meeting are expected to show a -25 bp cut in the federal funds target range to 3.50%-3.75%.  The markets will also look at the Fed's summary of economic projections and its dot-plot interest rate forecast.  In addition, post-meeting comments from Fed Chair Powell on Wednesday about the future direction of interest rates could move the markets.  On Thursday, weekly initial unemployment claims are expected to increase by +29,000 to 220,000. 

The markets are discounting a 90% chance of another -25 bp rate cut at the conclusion of the 2-day FOMC meeting on Wednesday.

Q3 corporate earnings season is drawing to a close as 495 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 Tuesday.  The Euro Stoxx 50 fell from a 3.5-week high and closed down -0.13%.  China’s Shanghai Composite closed down -0.37%.  Japan’s Nikkei Stock 225 closed up +0.14%.

Interest Rates

March 10-year T-notes (ZNH6) on Tuesday closed down -5 ticks.  The 10-year T-note yield rose +1.8 bp to 4.182%.  Mar T-note futures gave up an early advance and turned lower on Tuesday after the Oct JOLTS report showed job openings unexpectedly rose to a 5-month high, a hawkish factor for Fed policy.  Also, supply pressures weighed on T-notes as the Treasury auctioned $39 billion of 10-year T-notes.  However, losses in T-notes were limited due to solid demand for the $39 billion 10-year T-note auction, which had a bid-to-cover ratio of 2.55, above the 10-auction average of 2.54.

European government bond yields finished lower on Tuesday.  The 10-year German bund yield fell from an 8.5-month high of 2.879% and finished down by -1.2 bp to 2.850%.  The 10-year UK gilt yield fell by -2.3 bp to 4.505%.

German trade news was weaker than expected after German Oct exports rose +0.1% m/m, slightly weaker than expectations of +0.2% m/m.  Also, Oct imports fell -1.2% m/m, weaker than expectations of -0.5% m/m.

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

Toll Brothers (TOL) closed down more than -2% to lead homebuilders lower after forecasting 2026 deliveries of 10,300 to 10,700, below the consensus of 10,843.  Also, Lennar (LEN) closed down more than -2%,  and D R Horton (DHI) and PulteGroup (PHM) closed down more than -1%. 

Cryptocurrency-exposed stocks moved higher on Tuesday as Bitcoin (^BTCUSD) rose more than +1%.  Galaxy Digital Holdings (GLXY) closed up more than +12% after Citizens Jmp Securities LLC initiated coverage of the stock with an outperform recommendation and a $60 price target.  Also, Riot Platforms (RIOT) closed up more than +3%.  In addition, Strategy (MSTR) closed up more than +2%, and MARA Holdings (MARA) and Coinbase Global (COIN) closed up more than +1%. 

Silver mining stocks rose sharply on Tuesday after the price of COMEX silver soared to a new all-time high.  Hecla Mining (HL) closed up more than +7% and Newmont (NEM) closed up more than +5% to lead gainers in the S&P 500.  Also, Coeur Mining (CDE) closed up more than +5%. 

SLM Corp (SLM) closed down more than -14% after Compass Point Research & Trading LLC double-downgraded the stock to sell from buy with a price target of $23.   

Graphic Packaging Holding (GPK) closed down more than -8% after forecasting full-year net sales of $8.4 billion to $8.6 billion, the midpoint below the consensus of $8.56 billion.   

AutoZone (AZO) closed down more than -7% to lead losers in the S&P 500 after reporting Q1 comparable sales rose +5.50%, weaker than the consensus of +5.93%.  O’Reilly Automotive (ORLY) closed down more than -3% on the news to lead losers in the Nasdaq 100.

Caleres (CAL) closed down more than -5% after reporting Q3 adjusted EPS of 38 cents, well below the consensus of 85 cents. 

JPMorgan Chase (JPM) closed down more than -4% to lead losers in the Dow Jones Industrials after CEO Lake said the bank anticipates spending $105 billion next year, higher than the consensus of $101.1 billion, driven by “volume- and growth-related expenses.”

Ollie’s Bargain Outlet Holdings (OLLI) closed down more than -3% after reporting Q3 comparable sales rose +3.30%, weaker than the consensus of +3.74%.

Ares Management (ARES) closed up more than +7% after S&P Dow Jones Indices said the company will replace Kellanova in the S&P 500 before trading begins on Thursday, December 11.   

KeyCorp (KEY) closed up more than +3% after CEO Gorman said the bank agreed with activist investor HoldCo Asset Management that the stock is undervalued and has excess capital.

CVS Health (CVS) closed up more than +2% after raising guidance on its full-year adjusted EPS forecast to $6.60-$6.70 from a previous forecast of $6.55-$6.65, the midpoint stronger than the consensus of $6.63. 

Core & Main Inc (CNM) closed up more than +2% after reporting Q3 net sales of $2.06 billion, better than the consensus of $2.05 billion. 

Exxon Mobil (XOM) closed up more than +2% after it said it expects $35 billion in cash flow growth by 2030, an increase of about 17% from what it was projecting a year ago.

Viking Holdings Ltd (VIK) closed up more than +1% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $78. 

Otis Worldwide (OTIS) closed up more than +1% after BNP Paribas Exane upgraded the stock to outperform from neutral with a price target of $105.

Earnings Reports(12/10/2025)

Adobe Inc (ADBE), Chewy Inc (CHWY), Nordson Corp (NDSN), Oracle Corp (ORCL), Synopsys Inc (SNPS), Vail Resorts Inc (MTN).