The S&P 500 Index ($SPX) (SPY) on Thursday closed up by +0.21%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up by +1.34%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down by -0.35%.  December E-mini S&P futures (ESZ25) rose +0.23%, and December E-mini Nasdaq futures (NQZ25) fell -0.33%.

Stock indexes settled mixed on Thursday, with the S&P 500 posting a 6-week high and the Dow Jones Industrials climbing to a new all-time high. The broader market found underlying support on Thursday after bond yields moved lower amid a jump in weekly jobless claims, which is dovish for Fed policy.  Also, managed healthcare stocks staged a rally on Thursday, a supportive factor for the overall market, and Visa shares surged more than +6% to boost the Dow Jones Industrial Average.

However, the Nasdaq 100 fell to a 1-week low due to a sell-off in Oracle, which is viewed as a bellwether of the AI investment boom.  Oracle tumbled more than 10% on Thursday, leading AI-infrastructure shares lower, after reporting Q2 cloud sales that missed estimates and raising its 2026 capital spending outlook by $15 billion to $50 billion.  Oracle’s results reignited worries about tech valuations and whether the capital outlays on AI infrastructure will pay off.

US weekly initial unemployment claims rose by +44,000 to a 3-month high of 236,000, showing a weaker labor market than expectations of 220,000.

The US Sep trade deficit unexpectedly shrank to -$52.8 billion versus expectations of a widening to -$63.1 billion and the smallest deficit in 5.25 years.

The markets are discounting a 24% chance that the FOMC will cut the fed funds target range by 25 bp at the January 27-28 FOMC meeting.

Q3 corporate earnings season is drawing to a close as 496 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 Thursday.  The Euro Stoxx 50 rallied to a 4-week high and closed up +0.80%.  China’s Shanghai Composite closed down -0.70%.  Japan’s Nikkei Stock 225 closed down -0.90%.

Interest Rates

March 10-year T-notes (ZNH6) on Thursday closed up by +7.5 ticks.  The 10-year T-note yield fell -0.6 bp to 4.141%.  T-notes found support on Thursday on positive carryover from Wednesday when the FOMC cut its 2025 and 2026 US core PCE price estimates, and Fed Chair Powell said that he doesn't think a rate hike is anybody's base case for the Fed's next policy move.  T-notes held their gains after weekly jobless claims unexpectedly rose to a 3-month high, a dovish factor for Fed policy.  Decent demand for the Treasury’s $22 billion auction of 30-year T-bonds was also positive for T-notes as the auction had a bid-to-cover ratio of 2.36, right on the 10-auction average.

European government bond yields are moving lower today.  The 10-year German bund yield fell -0.7 bp to 2.843%. The 10-year UK gilt yield fell -2.2 bp to 4.484%.

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

Cruise line operators moved higher on Thursday.  Royal Caribbean Cruises Ltd (RCL) closed up more than +7% to lead gainers in the S&P 500.  Also, Norwegian Cruise Line Holdings (NCLH) closed up more than +6%, and Carnival (CCL) closed up more than +5%

Managed healthcare stocks rallied on Thursday. Elevance Health (ELV) closed up more than +5%, and Centene (CNC) and Molina Healthcare (MOH) closed up more than +4%.  Also, Humana (HUM) and Cigna Group (CI) closed up more than +3%.  In addition, HCA Healthcare (HCA) and UnitedHealth Group (UNH) closed up more than +2%.

Fertilizer stocks rose on Thursday after Ukraine said its drones attacked two fertilizer plants in western Russia.  Mosaic (MOS) closed up more than +6%, and Intrepid Potash (IPI) closed up more than +5%.  Also, CF Industries Holdings (CF) closed up more than +2%. 

Chip makers retreated on Thursday, weighing on the Nasdaq 100.  ARM Holdings Plc (ARM), Intel (INTC), and Marvell Technology (MRVL) closed down more than -3%.  Also, Nvidia (NVDA), Broadcom (AVGO), Applied Materials (AMAT), GlobalFoundries (GFS), and Micron Technology (MU) closed down more than -1%.  

Oracle (ORCL) closed down more than -10% to lead losers in the S&P 500 after reporting Q2 adjusted revenue of $16.06 billion, below the consensus of $16.21 billion, and raising its 2026 capital spending outlook by $15 billion to $50 billion.  

Oxford Industries (OXM) closed down more than -21% after cutting its 2026 adjusted EPS forecast to $2.20-$2.40 from a previous estimate of $2.80-$3.20, well below the consensus of $2.91. 

Lovesac Co (LOVE) closed down more than -8% after cutting its 2026 net sales forecast to $685 million-$705 million from a previous forecast of $710 million-$740 million, weaker than the consensus of $713.7 million. 

Stellantis NV (STLA) closed down more than -3% after BNP Paribas Exane downgraded the stock to underperform from neutral. 

Intuitive Surgical (ISRG) closed down more than -1% after Citigroup downgraded the stock to neutral from buy. 

Gemini Space Station Inc (GEMI) closed up more than +31% after the company’s application for a derivatives exchange was approved by the Commodity Futures Exchange Commission. 

Ciena Corp (CIEN) closed up more than +8% after reporting Q4 revenue of $1.35 billion, better than the consensus of $1.29 billion. 

Visa (V) closed up more than +6% to lead gainers in the Dow Jones Industrials after Bank of America Global Research upgraded the stock to buy from neutral with a price target of $382.

Abercrombie & Fitch (ANF) closed up more than +2% after Goldman Sachs initiated coverage on the stock with a buy recommendation and a price target of $120.

West Pharmaceutical Services (WST) closed up more than +1% after Nephron Research LLC upgraded the stock to buy from hold with a price target of $367. 

Earnings Reports(12/12/2025)

Johnson Outdoors Inc (JOUT), SR Bancorp Inc (SRBK), Value Line Inc (VALU). 

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