The S&P 500 Index ($SPX) (SPY) on Monday closed up by +1.55%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up by +0.44%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +2.62%. December E-mini S&P futures (ESZ25) rose +1.56%, and December E-mini Nasdaq futures (NQZ25) rose +2.64%.
US stock indexes rallied sharply on Monday due to strength in technology stocks and rising expectations for a December Fed interest rate cut. Semiconductor and AI-infrastructure stocks extended last Friday’s rebound after the sectors retreated on concerns over lofty valuations and whether heavy investment in artificial intelligence will boost profitability. Also, the strength of the Magnificent Seven technology stocks on Monday was another supportive factor for the overall market.
T-note yields moved lower on Monday, providing support to stocks, after Fed Governor Christopher Waller said he's advocating for a December rate cut by the Fed due to concerns about the labor market, and then taking a meeting-by-meeting approach starting in January. The 10-year T-note yield fell -3 bp to 4.03% as Mr. Waller’s comments, along with last Friday’s dovish comments from New York Fed President John Williams, increased the chance of a Fed rate cut at next month’s FOMC meeting to 80% from 30% last Thursday.
The Bureau of Labor Statistics (BLS) canceled its October consumer price report last Friday and said the November report will be released on December 18. Last Wednesday, the BLS said it would not publish an October employment report and noted that it would incorporate those payroll figures into the November report, scheduled for publication on December 16.
The markets will look to this week’s economic news for direction. On Tuesday, Sep retail sales are expected to climb +0.4% m/m and +0.3% m/m ex-autos. Also, Sep PPI is expected to remain unchanged from Aug at +2.6% y/y, and Sep core PPI is expected to ease to +2.7% y/y from +2.8% y/y in Aug. In addition, The Conference Board’s Nov consumer confidence index is expected to fall by 1.2 points to 93.4. Finally, on Tuesday, Oct pending home sales are expected to climb +0.1% m/m. Wednesday brings weekly initial unemployment claims (expected +6,000 to 226,000), Sep capital goods new orders nondefense ex-aircraft and parts (expected +0.3% m/m), the Nov MNI Chicago PMI (expected +0.2 to 44.0), and the Fed Beige Book.
The markets are discounting an 80% 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 466 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 higher on Monday. The Euro Stoxx 50 closed up +0.25%. China’s Shanghai Composite recovered from a 6-week low and closed up +0.05%. Japan’s Nikkei Stock 225 did not trade as Japanese markets closed for the Labor Thanksgiving Day holiday.
Interest Rates
December 10-year T-notes (ZNZ5) on Monday closed up by +4 ticks. The 10-year T-note yield fell -2.9 bp to 4.034%. T-notes settled higher on Monday, and the 10-year T-note yield fell to a 3.5-week low of 3.031%. Dovish comments from Fed Governor Christopher Waller on Monday lifted T-note prices when he said he's advocating for a December rate cut by the Fed due to concerns about the labor market, which boosted the chances of a Fed rate cut at the December 9-10 FOMC meeting to 80% from 30% last Thursday. Also, falling inflation expectations are bullish for T-notes after the 10-year breakeven inflation rate fell to a 6.75-month low of 2.231% on Monday. T-notes raced to their highs Monday afternoon on strong demand for the Treasury’s $69 billion auction of 2-year T-notes that had a bid-to-cover ratio of 2.68, above the 10-auction average of 2.60.
Monday's strength in stocks curbed safe-haven demand for government debt and limited gains in T-notes. Also, supply pressures are negative for T-notes as the Treasury will auction $211 billion in T-notes and floating-rate notes this week.
European government bond yields moved lower on Monday. The 10-year German bund yield fell 1.1 bp to 2.692%. The 10-year UK gilt yield fell -0.8 bp to 4.537%.
The German Nov IFO business climate unexpectedly fell -0.4 to 88.1, weaker than expectations of an increase to 88.5.
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
Chip makers and AI-infrastructure stocks rallied sharply on Monday, providing support to the broader market. Broadcom (AVGO) closed up more than +11% to lead gainers in the S&P 500 and Nasdaq 100. Also, Western Digital (WDC) and Micron Technology (MU) closed up more than +8%, and Marvel Technology (MRVL) closed up more than +7%. In addition, Lam Research (LRCX) and Advanced Micro Devices (AMD) closed up more than +6%, and KLA Corp (KLAC) closed up more than +4%. Finally, Intel (INTC) and Applied Materials (AMAT) closed up more than +3%, and ASML Holding NV (ASML) and ARM Holdings Plc (ARM) closed up more than +2%.
The Magnificent Seven Technology stocks rallied on Monday, a supportive factor for the overall market. Tesla (TSLA) and Alphabet (GOOGL) closed up more than +6%. Also, Meta Platforms (META) closed up more than +3%, and Amazon.com (AMZN) and Nvidia (NVDA) closed up more than +2%. In addition, Apple (AAPL) closed up more than +1% and Microsoft (MSFT) closed up +0.40%.
Healthcare insurers and providers are moved higher on Monday after Politico reported the Trump administration is preparing a two-year health insurance premium tax credit extension. Oscar Health (OSCR) closed up more than +23% and Centene (CNC) closed up more than +5%. Also, Molina Healthcare (MOH) and Elevance Health (ELV) closed up more than +2%.
Cruise line operators retreated on Monday, led by a -6% decline in Carnival (CCL) after management struck a cautious tone about near-term demand, citing US macroeconomic uncertainty and elevated Caribbean capacity growth. Also, Royal Caribbean Cruises Ltd (RCL) closed down more than -3% and Norwegian Cruise Line Holdings (NCLH) closed down more than -2%.
Defensive food producers were under pressure on Monday amid a broader market rally. Campbell’s Company (CPB) closed down more than -3% and General Mills (GIS) closed down more than -2%. Also, J M Smucker (SJM), Mondelez International (MDLZ), and McCormick & Co (MKC) closed down more than -1%.
Inspire Medical Systems (INSP) closed up more than +30% after Nephron Research LLC upgraded the stock to buy from hold with a price target of $145.
Lumentum (LITE) closed up more than +17% after Needham & Co. raised its price target on the stock to $290 from $235.
Carvana (CVNA) closed up more than +6% after Wedbush Securities upgraded the stock to outperform from neutral with a price target of $400.
Bristol-Myers Squibb (BMY) closed up more than +3% after peer developer, Bayer AG, said an experimental stroke-prevention drug showed positive results in a late-stage study.
Merck & Co. (MRK) closed up more than +2% to lead gainers in the Dow Jones Industrials after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $125.
Copart (CPRT) closed down more than -4% to lead losers in the Nasdaq 100 after JPMorgan Chase cut its price target on the stock to $45 from $50.
Frontline Plc (FRO) closed down more than -3% after Clarksons Securities downgraded the stock to neutral from buy.
Performance Food Group (PFGC) closed down more than -2% after US Foods said it is no longer pursuing a merger with the company.
Earnings Reports(11/25/2025)
Analog Devices Inc (ADI), Autodesk Inc (ADSK), Best Buy Co Inc (BBY), Burlington Stores Inc (BURL), Dell Technologies Inc (DELL), Dick's Sporting Goods Inc (DKS), HP Inc (HPQ), J M Smucker Co/The (SJM), NetApp Inc (NTAP), Nutanix Inc (NTNX), Workday Inc (WDAY), Zscaler Inc (ZS).
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.
More news from Barchart
