The S&P 500 Index ($SPX) (SPY) today is up +0.13%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.11%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.19%. September E-mini S&P futures (ESU25) are up +0.07%, and September E-mini Nasdaq futures (NQU25) are up +0.17%.
Stock indexes today are slightly higher, finding support from a rally in European stocks to a 1-week high. Stocks are also underpinned by the prospect of a more accommodative Federal Reserve, as the markets have fully priced in a 25 bp rate cut by the Fed at next week's FOMC meeting and priced in a 10% chance for a 50 bp rate cut.
M&A activity is also supporting stocks today after Anglo American agreed to acquire Teck Resources, creating a more than $50 billion company. Also, Novartis AG is buying Tourmaline Bio for about $1.4 billion.
Market focus this week will be on any trade or tariff news. Later today, the BLS will release annual benchmark revisions to US payrolls in the year through March (expected -700,000). On Wednesday, Aug PPI final demand is expected to climb +3.3% y/y, unchanged from July, and Aug PPI ex-food and energy is expected to ease to +3.5% y/y from +3.7% y/y in July. On Thursday, Aug CPI is expected to climb to +2.9% y/y from +2.7% y/y in July, and Aug CPI ex-food and energy is expected to increase +3.1% y/y, unchanged from July. Also, weekly initial unemployment claims are expected to fall by -3,000 to 234,000. On Friday, the University of Michigan Sep consumer sentiment index is expected to slip -0.2 to 58.0.
The markets are now pricing in a 10% chance of a 50 bp rate cut at the upcoming FOMC meeting on Sep 16-17, versus the previous expectations of a zero chance of that 50 bp rate cut. After the fully expected -25 bp rate cut at the Sep 16-17 meeting, the markets are now discounting an 81% chance of a second -25 bp rate cut at the Oct 28-29 meeting, up from a 54% chance as of late Thursday. The markets are now pricing in an overall -75 bp rate cut in the federal funds rate by year-end to 3.63% from the current 4.38% rate.
Regarding tariffs, a federal appeals court ruled late last month that President Trump exceeded his authority by imposing global tariffs without Congressional approval, but the court let the tariffs remain in place while appeals continue. The US Court of Appeals for the Federal Circuit Court said, "The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax." The case now appears to be headed to the Supreme Court for a final decision. According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced.
Overseas stock markets today are mixed. The Euro Stoxx 50 rose to a 1-week high and is up +0.07%. China's Shanghai Composite closed down -0.51%. Japan's Nikkei Stock 225 fell from a record high and closed down -0.42%.
Interest Rates
December 10-year T-notes (ZNZ5) are down by -5 ticks. The 10-year T-note yield is up by +2.9 bp to 4.068%. Strength in stocks today is undercutting T-notes. Also, supply pressures are weighing on T-notes as the Treasury will auction $119 billion of T-notes and T-bonds this week, beginning with today's $58 billion auction of 3-year T-notes. Losses in T-notes are limited due to carryover support from last Friday's weak US unemployment report that boosted the chances to 100% for a 25 bp Fed rate cut at next week's FOMC meeting.
Concerns about Fed independence are negatively impacting T-note prices due to President Trump's attempt to fire Fed Governor Cook and Stephen Miran's intention to hold a Fed Governor position while remaining technically in his White House role on the Council of Economic Advisors.
European government bond yields today are moving higher. The 10-year German bund yield is up +2.9 bp to 2.671%. The 10-year UK gilt yield is up +0.8 bp to 4.613%.
French Jul manufacturing production fell -1.7% m/m, weaker than expectations of -1.2% m/m and the largest decline in 14 months.
Swaps are discounting the chances at 1% for a -25 bp rate cut by the ECB at Thursday's policy meeting.
US Stock Movers
Energy producers and energy service providers are climbing today, with WTI crude oil up more than +1%. Phillips 66 (PSX) and Valero Energy (VLO) are up more than +3%, and Marathon Petroleum (MPC) is up more than +2%. Also, Schlumberger (SLB), Haliburton (HAL), Devon Energy (DVN), Exxon Mobil (XOM), Diamondback Energy (FANG), and ConocoPhillips (COP) are up more than +1%.
Tourmaline Bio (TRML) is up more than +57% after Novartis AG agreed to buy the company for $1.4 billion or about $48 a share.
Nebius Group NV (NBIS) is up more than +41% after announcing it will provide Microsoft access to GPU infrastructure capacity at its new data center in Vineland, New Jersey, over the next five years.
Brighthouse Financial (BHF) is up more than +10% after the Financial Times reported that Aquarian Holdings is in late-stage talks with two Middle Eastern investors to finance a takeover of the company.
CoreWeave (CRWV) is up more than +8% after launching CoreWeave Ventures, a new initiative committed to backing founders and companies developing platforms and technologies shaping the AI ecosystem.
Atlassian Corp (TEAM) is up more than 4% to lead gainers in the Nasdaq 100 after announcing it is ending its data center product over the coming three years and will move customers to its cloud platform.
UnitedHealth Group (UNH) is up more than +2% to lead gainers in the Dow Jones Industrials after saying it expects 78% of its Medicare Advantage members to be in highly rated 4-star or higher plans that earn bonus payments next year.
EchoStar (SATS) is up more than +2% after the FDC said it was ending a probe examining whether the company had met milestones for building out its mobile network.
Albemarle (ALB) is down more than -10% to lead losers in the S&P 500 as lithium stocks retreat on a report from Chinese state media Securities Times that said CATL's lithium mine, which had suspended production last month, will resume production soon.
SailPoint (SAIL) is down more than -7% after forecasting Q3 adjusted income from operations of $42.5 million-$43.5 million, weaker than the consensus of $50.4 million.
Fox Corp (FOXA) is down more than -5% after trusts established for three of Rupert Murdoch's children are selling 16.9 million shares of Class B stock.
Dell Technologies (DELL) is down more than -3% after announcing that CFO McGill is stepping down immediately.
News Corp (NWS) is down more than -3% after announcing it will offer 14.1 million shares of Class B common stock.
Earnings Reports(9/9/2025)
Core & Main Inc (CNM), GameStop Corp (GME), Oracle Corp (ORCL), Rubrik Inc (RBRK), SailPoint Inc (SAIL), Synopsys Inc (SNPS).
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.
