The S&P 500 Index ($SPX) (SPY) on Thursday closed down -1.66%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -1.65%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -2.05%.  December E-mini S&P futures (ESZ25) fell -1.64%, and December E-mini Nasdaq futures (NQZ25) fell -2.02%.

US stock indexes sold off sharply on Thursday amid concerns that the soon-to-be-released economic reports, delayed by the government shutdown, will be weak enough to allow the Fed to keep cutting interest rates.  The weakness in chipmakers and the slide in the Magnificent Seven technology stocks on Thursday also weighed on the overall market.

Higher T-note yields on Thursday undercut stocks, as the 10-year T-note yield rose +4 bp to 4.11%.  Hawkish Fed comments pushed bond yields higher on Thursday and reduced the chances of a Fed rate cut at next month's FOMC meeting to 51% from 70% last week.  Boston Fed President Susan Collins, Cleveland Fed President Beth Hammack, and St. Louis Fed President Alberto Musalem all said they favored keeping interest rates steady.   

St. Louis Fed President Alberto Musalem cautioned against further Fed rate cuts, saying, "I think there's limited room for further easing without monetary policy becoming overly accommodative."

Cleveland Fed President Beth Hammack said she doesn't support any further interest rate cuts unless the economy changes, as "we've got this persistent high inflation that is sticking around."

Wednesday evening, Boston Fed President Susan Collins said, "It will likely be appropriate to keep policy rates at the current level for some time to balance the inflation and employment risks in this highly uncertain environment." 

As expected, President Trump signed legislation Wednesday evening that ended the longest US government shutdown in history.  The bill provides full-year funding for some departments, funds other agencies through January 30, and includes pay for furloughed government workers.  The bill also resumes federal payments to states and localities and recalls agency employees who were laid off during the shutdown. 

The Congressional Budget Office (CBO) projected that the six-week government closure would reduce real GDP growth in the current quarter by 1.5 percentage points.  However, more than half of the loss may be recovered early next year as federal programs resume and government employees receive back pay, according to the CBO.

The White House on Wednesday said that the monthly October payrolls report and consumer price index are unlikely to be released due to the government shutdown.  The Bureau of Labor Statistics is expected to publish a calendar in the coming days with updated release dates for delayed economic data.

The markets are discounting a 51% chance of another -25 bp rate cut at the next FOMC meeting on December 9-10.

Q3 corporate earnings season is nearly over, as 456 of the S&P 500 companies have reported earnings results.  According to Bloomberg Intelligence, 82% 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 Thursday.  The Euro Stoxx 50 fell from a new record high and closed down -0.77%.  China's Shanghai Composite climbed to a 10-year high and closed up +0.73%.  Japan's Nikkei Stock 225 closed up +0.43%.

Interest Rates

December 10-year T-notes (ZNZ5) on Thursday closed down -7.5 ticks.  The 10-year T-note yield rose +4.1 bp to 4.110%.  T-notes were under pressure Thursday as the US government reopened, reducing safe-haven demand for T-notes.  Also, hawkish Fed comments weighed on T-note prices after Boston Fed President Susan Collins, Cleveland Fed President Beth Hammack, and St. Louis Fed President Alberto Musalem cautioned against further Fed rate cuts.  In addition, weak demand for the Treasury's $25 billion auction of 30-year T-bonds was negative for T-notes, as the auction had a 2.29 bid-to-cover ratio, below the 10-auction average of 2.38.

European government bond yields moved higher on Thursday.  The 10-year German bund yield recovered from a 1-week low of 2.639% and finished up +4.4 bp to 2.688%.  The 10-year UK gilt yield rose +3.9 bp to 4.437%.

Eurozone Sep industrial production rose +0.2% m/m, weaker than expectations of +0.7% m/m.

UK Sep industrial production fell -2.0% m/m, weaker than expectations of -0.2% m/m and the biggest decline in more than 4.5 years.

UK Q3 GDP rose +0.1% q/q and +1.3% y/y, weaker than expectations of +0.2% q/q and +1.4% y/y.

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

Chip stocks sold off on Thursday and weighed on the overall market. ARM Holdings Plc (ARM) and Intel (INTC) closed down more than -5%, and Lam Research (LRCX) and Broadcom (AVGO) closed down more than -4%.  Also, Micron Technology (MU), Advanced Micro Devices (AMD), GlobalFoundries (GFS), Applied Materials (AMAT), and KLA Corp (KLAC) closed down by more than -3%. In addition, ON Semiconductor (ON) and Marvell Technology (MRVL) closed down more than -2%. 

Weakness in most of the Magnificent Seven technology stocks on Thursday dragged the broader market lower.  Tesla (TSLA) closed down more than -6% and Nvidia (NVDA) closed down more than -3%.  Also, Alphabet (GOOGL) and Amazon.com (AMZN) closed down more than -2%, and Microsoft (MSFT) closed down more than -1%.  In addition, Apple (AAPL) closed down -0.19%, but Meta Platforms (META) bucked the trend and closed up +0.14%. 

Ardent Health (ARDT) closed down more than -34% after cutting its full-year adjusted Ebitda forecast to $530 million-$555 million from a previous forecast of $575 million-$615 million, well below the consensus of $600.6 million. 

Webtoon Entertainment (WBTN) closed down more than -25% after forecasting Q4 revenue of $330 million to $340 million, well below the consensus of $382.3 million.

Ibotta Inc (IBTA) closed down more than -23% after forecasting Q4 revenue of $80 million to $85 million, the midpoint below the consensus of $84.2 million. 

Walt Disney (DIS) closed down more than -7% to lead losers in the S&P 500 and Dow Jones Industrials after reporting Q4 revenue of $22.46 billion, below the consensus of $22.83 billion. 

Dlocal Ltd (DLO) closed down more than -6% after reporting Q3 adjusted Ebitda margin of 25%, weaker than the consensus of 26.3%. 

Dollar Tree (DLTR) closed down more than -2% after Goldman Sachs double-downgraded the stock to buy from sell with a price target of $103. 

Sealed Air Corp (SEE) closed up more than +17% after Clayton Dubilier & Rice said it was exploring a potential acquisition of the company.

Firefly Aerospace (FLY) closed up more than +17% after reporting Q3 revenue of $30.8 million, stronger than the consensus of $27.8 million, and said it plans to resume launches of its Alpha rocket between late 2025 and early next year. 

Dillard's Inc. (DDS) closed up more than +9% after reporting Q3 EPS of $8.31, well above the consensus of $6.26.

Cisco Systems (CSCO) closed up more than +4% to lead gainers in the Dow Jones Industrials and Nasdaq 100 after boosting its 2026 revenue forecast to $60.2 billion -$61.0 billion from a previous forecast of $59 billion-$60 billion, stronger than the consensus of $59.64 billion. 

Albemarle (ALB) closed up more than +3% to lead gainers in the S&P 500 after Mizuho Securities raised its price target on the stock to $110 from $92.

Nike (NKE) is up more than +2% after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $75.

Earnings Reports(11/14/2025)

Qnity Electronics Inc (Q).

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