S&P Futures Muted as Bond Yields Climb

December S&P 500 E-Mini futures (ESZ25) are trending up +0.04% this morning as global bond yields climbed following the Bank of Japan’s interest rate hike.

The 10-year T-note yield rose three basis points to 4.15% on negative carryover from a jump in 10-year Japanese bond yields to the highest level since 1999 after the Bank of Japan raised interest rates to a three-decade high.

In yesterday’s trading session, Wall Street’s major indices closed higher. Micron Technology (MU) surged over +10% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the largest U.S. memory-chip maker posted upbeat FQ1 results and gave a blowout FQ2 forecast. Also, the Magnificent Seven stocks advanced, with Tesla (TSLA) rising more than +3% and Amazon.com (AMZN) gaining over +2%. In addition, Trump Media & Technology Group (DJT) jumped more than +41% after announcing a merger with TAE Technologies in an all-stock transaction valued at over $6 billion. On the bearish side, FactSet Research Systems (FDS) slumped over -7% and was the top percentage loser on the S&P 500 after the company issued soft FY26 revenue guidance.

The U.S. Bureau of Labor Statistics report released on Thursday showed that the CPI rose +2.7% y/y in November, weaker than expectations of +3.1% y/y. Also, the core CPI, which excludes volatile food and fuel prices, rose +2.6% y/y in November, weaker than expectations of +3.0% y/y. In addition, the U.S. Philly Fed manufacturing index unexpectedly fell to -10.2 in December, weaker than expectations of 2.5. Finally, the number of Americans filing for initial jobless claims in the past week fell by -13K to 224K, in line with expectations.

“November’s inflation undershoot has armed Fed doves with strong ammunition for a January rate cut,” said Seema Shah at Principal Asset Management. “Distortions can’t be ruled out, but the sharp drop in annual inflation leaves the Fed with little excuse not to respond to rising unemployment.”

U.S. rate futures have priced in a 75.6% probability of no rate change and a 24.4% chance of a 25 basis point rate cut at January’s monetary policy meeting.

Meanwhile, Wall Street is bracing for a quarterly event known as “triple-witching,” during which derivatives contracts linked to equities, index options, and futures expire, prompting traders collectively to either roll over their current positions or initiate new ones. According to Bloomberg, a record $7.1 trillion in notional open interest is set to roll off today as contracts expire across the U.S. options market.

On the economic data front, investors will focus on the University of Michigan’s U.S. Consumer Sentiment Index, which is set to be released in a couple of hours. Economists anticipate that the final December figure will be revised higher to 53.5 from the preliminary reading of 53.3.

U.S. Existing Home Sales data will also be released today. Economists foresee this figure coming in at 4.15 million in November, compared to 4.10 million in October.

Investors will also monitor earnings reports from several notable companies, with Paychex (PAYX), Carnival Corp. (CCL), and Conagra Brands (CAG) set to report their quarterly results today.

In addition, market participants will be anticipating a speech from New York Fed President John Williams.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.149%, up +0.85%.

The Euro Stoxx 50 Index is up +0.02% this morning, taking a breather after strong gains in the previous session. Bank and industrial stocks gained ground on Friday, while technology and consumer stocks underperformed. The benchmark index is on track to end the week with solid gains. A survey released on Friday showed that German consumer sentiment is poised to drop sharply heading into 2026 amid economic uncertainty and a rising preference to save rather than spend. Separately, data showed that U.K. monthly retail sales unexpectedly fell in November, as consumers remained cautious ahead of the budget and potential tax increases. Meanwhile, European Central Bank Governing Council member Francois Villeroy de Galhau said in an interview with Le Figaro that the ECB will maintain flexibility over the future path of interest rates amid downside risks to inflation. “There are risks in both directions for inflation, but particularly downside risks. We will therefore be as agile as necessary in each of our upcoming meetings,” Villeroy told Le Figaro. In other news, the European Union pushed back its own deadline to sign off a free trade agreement with Latin American countries to January. In corporate news, Wh Smith Plc (SMWH.LN) fell over -4% after the U.K.’s financial regulator said it was probing the company over accounting failures.

U.K. Retail Sales, U.K. Core Retail Sales, Germany’s GfK Consumer Climate Index, Germany’s PPI, and Eurozone’s Current Account data were released today.

U.K. November Retail Sales fell -0.1% m/m and rose +0.6% y/y, weaker than expectations of +0.3% m/m and +1.6% y/y.

U.K. November Core Retail Sales fell -0.2% m/m and rose +1.2% y/y, weaker than expectations of +0.2% m/m and +1.6% y/y.

The German January GfK Consumer Climate Index came in at -26.9, weaker than expectations of -23.0.

The German November PPI was unchanged m/m and fell -2.3% y/y, weaker than expectations of +0.1% m/m and -2.2% y/y.

Eurozone’s October Current Account stood at 25.7 billion euros, stronger than expectations of 19.6 billion euros.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.36%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.03%.

China’s Shanghai Composite Index closed higher today, marking a third straight session of gains. Tourism stocks climbed on Friday, with China Tourism Group Duty Free jumping more than +8% after China launched a $113 billion free-trade experiment on Hainan island. Also, defense stocks extended their gains after the Trump administration announced on Wednesday a major arms sale to Taiwan worth around $11 billion. Meanwhile, chip stocks were little changed after Reuters reported that the Trump administration has initiated a review that could allow the first shipments of Nvidia’s H200 chips to China. The benchmark index ended the week roughly flat. In other news, inflows into a group of exchange-traded funds tracking the CSI A500 Index jumped to a new record on Thursday. “It’s possible that there’s some sort of broadly-defined ‘national team’ at work” to support markets, said Chen Shi, a fund manager at Shanghai Jade Stone Investment Management. In corporate news, Man Wah Holdings climbed about +8% in Hong Kong after its unit agreed to acquire U.S. furniture maker Gainline Recline Intermediate Corp. for $58.7 million, including debt.

Japan’s Nikkei 225 Stock Index closed higher today, led by gains in the tech sector, while government bond yields climbed after the Bank of Japan raised interest rates to a three-decade high. Technology stocks were among the biggest gainers on Friday, tracking an overnight rally in their U.S. peers following a blowout forecast from chipmaker Micron. The benchmark index held its gains after the BOJ raised borrowing costs as expected. The central bank raised its policy rate to 0.75% from 0.50% in a unanimous decision, reflecting policymakers’ increasing confidence that wage growth and inflation are moving in tandem. The hike lifts borrowing costs to their highest level since 1995. In its statement, the central bank said it would pursue further rate hikes if the economy and prices evolve in line with its projections. Japan’s benchmark 10-year bond yield climbed above 2% for the first time in nearly two decades following the announcement. At the same time, the yen weakened as much as 1.1% against the dollar amid a lack of clear guidance on the timing of future monetary tightening. Governor Kazuo Ueda said at a press conference that there remains scope to raise rates further, but how far and how fast the BOJ proceeds must be determined carefully based on developments in prices and the economy. Meanwhile, the benchmark index notched a weekly loss. Government data released earlier on Friday showed that Japan’s core inflation rose 3.0% in November from a year earlier, remaining above the central bank’s 2% target for the 44th consecutive month. In corporate news, Takeda Pharmaceuticals rose over +2% after the company announced positive clinical trial results for its new treatment for plaque psoriasis. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -2.36% to 27.31.

The Japanese November National Core CPI rose +3.0% y/y, in line with expectations.

Pre-Market U.S. Stock Movers

Oracle (ORCL) climbed more than +5% in pre-market trading after the company and two other investors signed agreements with TikTok and its Chinese parent ByteDance to establish a new joint venture called TikTok USDS Joint Venture LLC.

Generac Holdings (GNRC) rose over +3% in pre-market trading after Wells Fargo upgraded the stock to Overweight from Equal Weight with a price target of $195.

Nike (NKE) plunged over -10% in pre-market trading after the company said it expects sales to drop by a low single-digit percentage in the current quarter amid ongoing weakness in China and at its Converse brand.

KB Home (KBH) fell more than -3% in pre-market trading after the homebuilder provided soft FY26 deliveries guidance.

Lyft (LYFT) slid over -3% in pre-market trading after Wedbush downgraded the stock to Underperform from Neutral with a price target of $16.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - December 19th

Paychex (PAYX), Carnival Corp (CCL), Conagra Brands (CAG), Lamb Weston Holdings (LW), Winnebago Industries (WGO).