Market Update
The S&P 500 Index saw a modest increase of 0.25% on Tuesday, while the Dow Jones Industrial Average rose by 0.39%. The Nasdaq 100 Index experienced a more significant jump, ending the day up 0.84%. In futures, December E-mini S&P futures gained 0.21%, and December E-mini Nasdaq futures increased by 0.82%.
Stock indexes rallied, with both the S&P 500 and Nasdaq 100 reaching highs not seen in 2.5 weeks. This upward trend was largely fueled by strong performances within the semiconductor sector. Several tech stocks also reported earnings that surpassed expectations. MongoDB saw a remarkable increase of over 22% after better-than-expected Q3 earnings, while Credo Technology Group had a rise of more than 10% after its Q2 earnings report. Additionally, Boeing climbed over 10%, prompted by optimistic comments from its CFO about expected free cash flow.
The Organization for Economic Co-operation and Development (OECD) maintained its global GDP growth forecast for 2025 at 3.2%. However, it did adjust the GDP forecast for the United States, raising it from 1.8% to 2.0%, and the euro area’s forecast from 1.2% to 1.3%. The OECD attributed these adjustments to robust investments in artificial intelligence and favorable fiscal and monetary policies that are helping the global economy adapt to trade tariffs.
On Tuesday, President Trump indicated that he would announce a new Fed chair in early 2026. Reports suggest Kevin Hassett, currently head of the National Economic Council, could be a primary candidate to succeed Powell. Given Hassett’s alignment with Trump’s desire to influence interest rate policies, questions about the Fed’s independence are likely to arise.
This week, attention will shift to U.S. economic indicators. Analysts anticipate a rise of approximately 10,000 jobs in November according to the ADP. Moreover, September manufacturing production is expected to see a slight increase of 0.1%, while the ISM services index is projected to decline by 0.4 to a reading of 52.0. The weekly jobless claims number on Thursday is expected to rise by 6,000 to 222,000. On Friday, personal spending and personal income for September are both forecasted to grow by 0.3% month-over-month, with the core PCE price index expected to rise by 0.2% month-over-month and by 2.8% year-over-year. The University of Michigan Consumer Confidence Index for December is also expected to increase by 1.0 to a total of 52.0.
The market currently sees a 98% probability of a 25 basis point interest rate cut at the upcoming FOMC meeting in December.
As the third-quarter earnings season nears its end, 475 companies from the S&P 500 have reported their earnings. Notably, 83% of these companies have exceeded expectations, marking the best quarter since 2021, with a year-over-year profit increase of 14.6%. This also significantly surpasses the estimate of 7.2%.
International stock markets presented a mixed picture on Tuesday. The Euro Stoxx 50 climbed to a two-week high, finishing up 0.33%, while China’s Shanghai Composite dipped by 0.42%. In Japan, the Nikkei Stock Average remained stable.
The March 10-year T Note closed up slightly, while the yield on the 10-year T-note fell by 0.2 basis points to 4.085%. T-notes rebounded from earlier losses due to declining WTI crude oil prices, which eased inflation expectations. Increased odds of a Fed rate cut also supported T-notes, with the probability for a cut rising significantly.
European government bond yields declined on Tuesday, influenced by falling rates in Germany and the UK.
In November, the Eurozone’s CPI increased by 2.2% year-over-year, slightly above the anticipated 2.1%. Core CPI remained steady year-over-year at 2.4%, matching expectations.
In the semiconductor sector, stocks showed strong performance on Tuesday, with Intel leading the gains in the Nasdaq 100, rising over 9%. Other notable gains included NXP Semiconductors NV and Microchip Technology, along with several other tech firms.
Stocks tied to cryptocurrencies saw positive movement as Bitcoin rose over 5%. Meanwhile, defensive food stocks faced declines as the broader market strengthened, with several major food companies reporting losses.
MongoDB reported a Q3 revenue of $628.3 million, considerably above expectations and raised its revenue forecast for 2026. Boeing’s share price rose significantly after indicating expected free cash flow. Other stocks like Credo Technology also performed well post-earnings.
On the flip side, some companies such as Symbotic and Block experienced notable declines following downgrades and lower expectations.
Overall, various companies are set to report their financial results soon, with several notable names in the retail and technology sectors remaining in focus.
