The S&P 500 Index ($SPX) (SPY) on Thursday closed down by -1.56%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down by -0.84%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down by -2.38%. December E-mini S&P futures (ESZ25) fell -1.56%, and December E-mini Nasdaq futures (NQZ25) fell -2.46%.
US stock indexes gave up an early rally on Thursday and sold off sharply, with the S&P 500 posting a 2.25-month low, the Dow Jones Industrials posting a 5-week low, and the Nasdaq 100 posting a 2-month low. Megacap technology stocks and chip makers erased early gains on Thursday and retreated, dragging the overall market lower. Selling in stocks intensified after hawkish Fed comments on Thursday dampened expectations for further rate cuts.
Stock indexes initially rallied on Thursday after Nvidia's robust revenue forecast eased valuation concerns and dispelled fears of a potential bubble in the artificial intelligence industry. Also, Walmart rose by more than +6% after its strong Q3 results showed that consumer spending continues to hold up.
Stock indexes also found some early support Thursday after bond yields whipsawed lower following Sep nonfarm payrolls that rose more than expected, but the Sep unemployment rate unexpectedly ticked up to a 4-year high, which bolstered expectations that the Fed may still cut interest rates at next month’s FOMC meeting. The chance of a rate cut at the December 9-10 FOMC meeting rose to 35% on Thursday from 25% on Wednesday.
US weekly initial unemployment claims fell by -8,000 to 220,000, showing a stronger labor market than expectations of 227,000. However, weekly continuing claims rose to 1.974 million, the most in four years, and a sign that those currently unemployed are finding it challenging to secure new employment.
US Sep nonfarm payrolls rose by +119,00 beating expectations of +51,000 and signaling a stronger labor market000. The Sep unemployment rate unexpectedly rose by +0.1 to a nearly four-year high of 4.4%, showing a weaker labor market than expectations of no change at 4.3%.
US Sep average hourly earnings remained unchanged from Aug at +3.8% y/y, stronger than expectations of +3.7% y/y.
The US Nov Philadelphia Fed business outlook survey rose +11.1 to -1.7, weaker than expectations of +1.0.
US Oct existing home sales rose +1.2% m/m to an 8-month high of 4.10 million, stronger than expectations of 4.08 million.
Hawkish Fed comments on Thursday were bearish for stocks. Cleveland Fed President Beth Hammack said, "Lowering interest rates to support the labor market risks prolonging this period of elevated inflation, and it could also encourage risk-taking in financial markets." Also, Chicago Fed President Austan Goolsbee said inflation seems stalled, maybe moving up, which makes him uneasy about front-loading too many interest rate cuts. In addition, Fed Governor Michael Barr said, "I am concerned that we're seeing inflation still at around 3%," and that the Fed needs to proceed with caution when considering additional interest rate cuts with inflation above our 2% target.
The price of Bitcoin (^BTCUSD) tumbled more than -3% on Thursday to a 7-month low, as the crypto market remains in a sharp 6-week-long downtrend that has seen prices drop more than 31% from a record high last month.
This week’s US economic schedule is very heavy as a deluge of delayed economic reports will be released. Friday brings real earnings, the S&P US manufacturing and services PMI reports, the University of Michigan’s US consumer sentiment index, and the Kansas City Fed’s services activity report. The Bureau of Labor Statistics said Wednesday that it will not publish an October employment report and noted it will incorporate those payroll figures into the November report set to be published on December 16. Other delayed US economic reports are also expected to be released in the coming days, but have not yet been scheduled.
The markets are discounting a 35% 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 460 of the 500 S&P companies have released 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 closed up +0.50%. China’s Shanghai Composite closed down -0.40%. Japan’s Nikkei Stock 225 closed up sharply by +2.65%.
Interest Rates
December 10-year T-notes (ZNZ5) on Thursday closed up by +6 ticks. The 10-year T-note yield fell -3.3 bp to 4.104%. T-note prices recovered from a 2-week low on Thursday and whipsawed higher after Sep nonfarm payrolls rose more than expected, but the Sep unemployment rate unexpectedly ticked up to a nearly 4-year high, which bolsters speculation the Fed may still cut interest rates at next month’s FOMC meeting. T-notes also garnered support from easing inflation expectations, as the 10-year breakeven inflation rate dropped to a 6.5-month low of 2.250% on Thursday. Additionally, the sharp sell-off in stocks boosted demand for T-notes as a safe haven.
Gains in T-notes were limited after Oct existing home sales rose more than expected to an 8-month high, and after several Fed members signaled that they were against further Fed interest rate cuts.
European government bond yields were mixed on Thursday. The 10-year German bund yield rose to a 6-week high of 2.742% and finished up +0.5 bp to 2.716%. The 10-year UK gilt yield fell from a 5-week high of 4.619% and finished down -1.6 bp to 4.586%.
The Eurozone Nov consumer confidence index was unchanged at -14.2, weaker than expectations of an increase to -14.0.
German Oct PPI fell -1.8% y/y, weaker than expectations of -1.7% y/y.
ECB Governing Council member Makhlouf said Eurozone interest rates are in a "good place" and that he'd "need to see pretty compelling evidence to move."
Swaps are discounting a 2% chance for a -25 bp rate cut by the ECB at its next policy meeting on December 18.
US Stock Movers
Nvidia (NVDA) closed down more than -3% to lead the Magnificent Seven technology stocks lower despite reporting Q3 revenue of $57.01 billion, above the consensus of $55.19 billion, and forecasting Q4 revenue of $65 billion plus or minus 2%, stronger than the consensus of $62 billion. Also, Tesla (TSLA) and Amazon.com (AMZN) closed down more than -2%. In addition, Alphabet (GOOGL) and Microsoft (MSFT) closed down more than -1%, Apple (AAPL) closed down -0.86% and Meta Platforms (META) closed down -0.19%.
Semiconductor and AI-infrastructure stocks gave up early gains on Thursday and sold off, weighing on the broader market. Micron Technology closed down more than -10% to lead losers in the Nasdaq 100. Also, Advanced Micro Devices (AMD) closed down more than -7%, and Applied Materials (AMAT) and Lam Research (LRCX) closed down more than -6%. In addition, Marvell Technology (MRVL), ASML Holding NV, and KLA Corp (KLAC) closed down more than -5%, and Microchip Technology (MCHP), NXP Semiconductors NV (NXPI), ARM Holdings Plc (ARM), Intel (INTC), and Qualcomm (QCOM) closed down more than -3%.
Cryptocurrency-exposed stocks retreated on Thursday after the price of Bitcoin fell more than -3% to a 7-month low. Galaxy Digital Holdings (GLXY) closed down more than -9% and MARA Holdings (MARA) closed down more than -8%. Also, Coinbase Global (COIN) closed down more than -7%, Strategy (MSTR) closed down more than -5%, and Riot Platforms (RIOT) closed down more than -4%.
Bath & Body Works Inc. (BBWI) closed down more than -24% after reporting Q3 net sales of $1.59 billion, below the consensus of $1.63 billion, and cutting its full-year EPS estimate to $2.83 from a previous estimate of $3.28-$3.53, well below the consensus of $3.44.
Jacobs Solutions (J) closed down more than -10% to lead losers in the S&P 500 after reporting Q3 revenue of $3.15 billion, below the consensus of $3.16 billion.
Datadog (DDOG) closed down more than -9% after analysts said Palo Alto Networks’ purchase of Chronosphere is a competitive risk for the company.
Palo Alto Networks (PANW) closed down more than -7% after announcing it had acquired Chronosphere Inc. for $3.35 billion.
PACS Group (PACS) closed up more than +55% after it said its restatements and audit committee investigation are now complete. It also reported Q3 revenue of $1.34 billion, up +31% from a year ago.
Walmart (WMT) closed up more than +6% to lead gainers in the S&P 500 and Dow Jones Industrials after boosting its 2026 net sales forecast at constant currencies to +4.8% to +5.1% from a previous forecast of +3.75% to 4.75%.
Regeneron Pharmaceuticals (REGN) closed up more than +4% to lead gainers in the S&P 500 and Nasdaq 100 after the FDA approved the company’s EYLEA HD, an injectable drug to treat patients with macular edema following retinal vein occlusion.
Solventum (SOLV) closed up more than +2% after buying Acera Surgical for $725 million in cash and announcing a $1 billion share buyback program.
Nasdaq Inc. (NDAQ) closed up more than +1% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $110.
Jack Henry & Associates (JKHY) closed up more than +1% after Raymond James double-upgraded the stock to strong buy from market perform with a price target of $198.
Earnings Reports(11/21/2025)
Azenta Inc (AZTA), Barnes & Noble Education Inc (BNED), BJ's Wholesale Club Holdings Inc (BJ), Buckle Inc/The (BKE), IES Holdings Inc (IESC), Moog Inc (MOG/A), New Fortress Energy Inc (NFE), Rezolve AI PLC (RZLV).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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