The S&P 500 Index ($SPX) (SPY) today is down by -0.32%, the Dow Jones Industrials Index ($DOWI) (DIA) is down by -0.293%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down by -0.14%. December E-mini S&P futures (ESZ25) are down -0.30%, and December E-mini Nasdaq futures (NQZ25) are down -0.12%.
Stock indexes are sliding today, with the S&P 500 falling to a 2.5-week low and the Nasdaq 100 dropping to a 3-week low. Stocks are under pressure today as US financial reports point to a sluggish economy. The Nov unemployment rate rose to a 4-year high, Oct retail sales stagnated, and US manufacturing activity slowed to a 5-month low. Also, a slump in energy producers today is weighing on the broader market after WTI crude oil fell more than 3% to a 4.75-year low.
Stocks found some support from today’s Fed-friendly US economic reports on Nov payrolls and Oct retail sales, which bolster expectations that the Fed will continue to ease monetary policy. Also, wage pressures are easing as Nov hourly earnings posted their smallest year-on-year increase in 4.5 years.
US Nov nonfarm payrolls rose by +64,000, stronger than expectations of +50,000. Oct nonfarm payrolls fell by -105,000, weaker than expectations of -25,000. The Nov unemployment rate rose +0.1 to a 4-year high of 4.6%.
US Nov average hourly earnings rose +0.1% m/m and +3.5% y/y, weaker than expectations of +0.3% m/m and +3.6% y/y, with the +3.5% y/y gain the smallest year-on-year increase in 4.5 years.
US Oct retail sales were unchanged m/m, weaker than expectations of +0.1% m/m. However, Oct retail sales ex-autos rose +0.4% m/m, stronger than expectations of +0.2% m/m.
The US Dec S&P manufacturing PMI fell -0.4 to a 5-month low of 51.8, weaker than expectations of 52.1.
This week's market focus will be on US economic news. On Thursday, weekly initial unemployment claims are expected to fall -11,000 to 225,000. Also, Nov CPI is expected to be +3.1% y/y, and Nov core CPI is expected to be +3.0% y/y. On Friday, Nov existing home sales are expected to be up +1.2% m/m to 4.15 million. Also, the University of Michigan Dec consumer sentiment index is expected to be revised upward by +0.2 to 53.5 from the previously reported 53.3.
The markets are discounting a 24% chance that the FOMC will cut the fed funds target range by 25 bp at the next FOMC meeting on January 27-28.
Overseas stock markets are lower today. The Euro Stoxx 50 is down -0.68%. China’s Shanghai Composite fell to a 2-month low and closed down -1.11%. Japan’s Nikkei Stock 225 slid to a 2-week low and closed down -1.56%.
Interest Rates
March 10-year T-notes (ZNH6) today are up by +3 ticks. The 10-year T-note yield is down -0.8 bp to 4.165%. T-notes are moving higher today after the US Nov employment rate rose to a 4-year high and Nov average hourly earnings posted their smallest year-on-year increase in 4.5 years. Also, Oct retail sales rose less than expected, and the Dec S&P manufacturing PMI fell to a 5-month low, dovish factors for Fed policy. In addition, falling inflation expectations are supportive of T-notes as the 10-year breakeven inflation rate fell to a 1.5-week low today at 2.240%.
Gains in T-notes are limited after a report on US Oct retail sales ex-autos rose more than expected, a hawkish factor for Fed policy.
The steepening yield curve is bearish for T-note prices. Steepening trades occur when bond investors buy short-term government debt and sell long -term debt. The yield curve has steepened since last Wednesday’s FOMC meeting, when the Fed said it would begin purchasing up to $40 billion of short-term T-bills a month to boost liquidity in the financial system. Longer-term Treasury securities are also under pressure from concerns about inflation and the Fed’s independence.
European government bond yields are mixed today. The 10-year German bund yield is down -0.2 bp to 2.851%. The 10-year UK gilt yield rose to a 3-week high of 4.561% and is up +2.6 bp to 4.522%.
The Eurozone Dec S&P manufacturing PMI unexpectedly fell -0.4 to 49.2, weaker than expectations of an increase to 49.9 and the steepest pace of contraction in 8 months.
The German Dec ZEW survey expectations of economic growth unexpectedly rose by +7.3 to a 5-month high of 45.8, stronger than expectations of a decline to 38.4.
The UK Dec S&P manufacturing PMI rose +1.0 to 51.2, stronger than expectations of 50.3 and the fastest pace of expansion in 15 months.
Swaps are discounting a 0% chance for a -25 bp rate cut by the ECB at its next policy meeting on Thursday.
US Stock Movers
Energy producers and energy service providers are falling today, weighing on the broader market, as WTI crude oil is down more than 3% at a 4.75-year low. APA Corp (APA) is down more than -5% to lead losers in the S&P 500. Also, Diamondback Energy (FANG) is down more than -4% to lead losers in the Nasdaq 100. In addition, Halliburton (HAL) is down more than -4%, and Occidental Petroleum (OXY), Marathon Petroleum (MPC), ConocoPhillips (COP), Baker Hughes (BKR), Phillips 66 (PSX), and Devon Energy (DVN) are down more than -3%. Finally, Exxon Mobil (XOM) and Valero Energy (VLO) are down more than -2%.
Cryptocurrency-exposed stocks are climbing today as Bitcoin (^BTCUSD) rose more than +1%. Strategy (MSTR) is up more than +4% to lead gainers in the Nasdaq 100. Also, Galaxy Digital Holdings (GLXY), MARA Holdings (MARA), and Coinbase Global (COIN) are up more than +1%.
Booz Allen Hamilton Holding Corp (BAH) is down more than -7% after it announced that CFO Calderone will resign from the company effective February 1.
Pfizer Inc (PFE) is down more than -4% after forecasting 2026 revenue of $59.5 billion to $62.5 billion, the midpoint below the consensus of $61.63 billion.
Humana (HUM) is down more than -2% after forecasting full-year adjusted EPS of $17.000, below the consensus of $17.06.
Illinois Tool Works (ITW) is down more than -2% after Goldman Sachs downgraded the stock to sell from neutral with a price target of $230.
Archer-Daniels-Midland (ADM) is down more than -2% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $50.
Cognex (CGNX) is up more than +5% after Goldman Sachs double-upgraded the stock to buy from sell with a price target of $50.
Comcast (CMCSA) is up more than +3% to lead gainers in the S&P 500 after CNBC commented about trading activity in the swaps market that may suggest involvement by activist investors.
Okta Inc (OKTA) is up more than +2% after Jeffries upgraded the stock to buy from hold with a price target of $125.
Southwest Airlines (LUV) is up more than +2% after Barclays upgraded the stock to overweight from equal weight with a price target of $56.
Estee Lauder (EL) is up more than +2% after Bank of America named the stock as its top pick for beauty for 2026, with a price target of $130.
Ford Motor (F) is up more than +1% after it said it is cancelling a planned electric F-series truck and shifting production toward gas and hybrid vehicles.
Earnings Reports(12/16/2025)
CSP Inc (CSPI), Golden Matrix Group Inc (GMGI), Immersion Corp (IMMR), Lennar Corp (LEN), RCI Hospitality Holdings Inc (RICK), Worthington Enterprises Inc (WOR).
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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