The S&P 500 Index ($SPX) (SPY) today is down -0.24%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.36%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.32%. December E-mini S&P futures (ESZ25) are down -0.26%, and December E-mini Nasdaq futures (NQZ25) are down -0.30%.
Stock indexes are moving lower today, with the Dow Jones Industrials posting a 1-week low. The S&P 500 fell from a new all-time high as higher bond yields today sparked long liquidation pressures in chipmakers. The 10-year T-note yield is up by +2 bp to 4.14%. However, Delta Air Lines is up more than +5% after raising its full-year adjusted EPS forecast. Also, Costco Wholesale is up more than +2% after reporting stronger-than-expected September total comparable sales.
Most stock indexes rallied to record highs this week on optimism that growth in the AI sector and spending on artificial intelligence will translate into corporate profits. Stocks are also underpinned by hopes that a resilient US economy and additional Fed easing will continue to support the economy.
Dovish comments today from New York Fed President John Williams were supportive of bonds and stocks, as he stated that he would back “lower rates this year” if the economy evolved as expected, with inflation rising to around 3% and the unemployment rate increasing beyond its current 4.3%. He added. “There’s more downside risks to the labor market and employment, and that is something that takes some of the upside risk off of inflation.”
The shutdown of the US government is now into its second week, weighing on market sentiment and delaying key economic reports. The government shutdown means delays in the release of government reports, including today’s weekly initial unemployment claims, Tuesday’s Aug US trade report, and last Friday’s monthly payroll report. A prolonged shutdown could also delay the government’s inflation data, scheduled for release on October 15. The White House has warned that if the government shutdown lingered, it would trigger widespread dismissals of employees in government programs that don’t align with President Trump’s priorities. Bloomberg Economics estimates that 640,000 federal workers will be furloughed during the shutdown, which would expand jobless claims and push the unemployment rate up to 4.7%.
The ongoing US government shutdown, expectations of additional Fed easing, President Trump’s criticism of the Fed, and political uncertainty in France and Japan are all driving investors to safe-haven assets, such as gold and Bitcoin. Gold prices soared above $4,000 an ounce to another record high on Wednesday.
Market focus this week will be on any new developments regarding tariffs, trade, or attempts by lawmakers to end the ongoing US government shutdown. On Friday, the University of Michigan Oct consumer sentiment index is expected to fall -1.1 to 54.0.
Rising corporate earnings expectations are a bullish backdrop for stocks. According to Bloomberg Intelligence, more than 22% of companies in the S&P 500 provided guidance for their Q3 earnings results that are expected to beat analysts’ expectations, the highest in a year. However, Q3 profits are expected to have risen by +7.2%, the smallest increase in two years. Also, Q3 sales growth is projected to slow to +5.9% from 6.4% in Q2.
The markets are pricing in a 95% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29.
Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.21%. China’s Shanghai Composite reopened from the week-long Lunar New Year holiday and rallied to a 10-year high and closed up +1.32%. Japan’s Nikkei Stock 225 climbed to a new record high and closed up +1.77%.
Interest Rates
December 10-year T-notes (ZNZ5) today are down by -4 ticks. The 10-year T-note yield is up +2.1 bp to 4.138%. T-note prices are moving lower due to rising inflation expectations after the 10-year breakeven inflation rate climbed to a 1-week high today at 2.374%. Also, supply pressures are weighing in T-notes as the Treasury will auction $22 billion of 30-year T-bonds later today to conclude this week’s $119 billion auction slate of T-notes and T-bonds. Losses in T-notes are limited due to dovish comments from New York Fed President John Williams, who stated that he would support “lower rates this year” if the economy evolves as expected.
T-notes also have support amid concerns about the ongoing US government shutdown, which could lead to additional job losses, reduced consumer spending, and a weakened US economy, potentially allowing the Fed to continue cutting interest rates.
European government bond yields today are moving higher. The 10-year German bund yield is up +2.6 bp at 2.705%. The 10-year UK gilt yield is up by +3.6 bp to 4.746%.
German trade news was weaker than expected as Aug exports unexpectedly fell -0.5% m/m, weaker than expectations of +0.2% m/m. Also, Aug imports fell -1.3% m/m, weaker than expectations of -0.5% m/m.
The account of the ECB’s September 10-11 meeting was slightly hawkish as policymakers decided against an interest rate cut amid upside inflation risks, saying “While a further rate cut in the coming months would better protect the inflation target both under the baseline and across a range of adverse scenarios, the materialization of upside risks would instead warrant maintaining the current level of the policy rate.”
Swaps are discounting a 1% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.
US Stock Movers
Most semiconductor makers are sliding today and are weighing on the broader market. GlobalFoundries (GFS) is down more than -2%. Also, Qualcomm (QCOM), Microchip Technology (MCHP), NXP Semiconductors NV (NXPI), KLA Corp (KLAC), Micron Technology (MU), Marvell Technology (MRVL), ON Semiconductor (ON), and Texas Instruments (TXN) are down more than -1%.
PulteGroup (PHM) is down more than -4% and Toll Brothers (TOL) is down more than -3% to lead homebuilders lower after CFRA downgraded them to sell from hold. Also, DR Horton (DHI) and Lennar (LEN) are down more than -1%.
Helen of Troy (HELE) is down more than -22% after reporting Q2 gross margin of 44.2%, below the consensus of 46.6%.
AZZ Inc (AZZ) is down more than -3% after reporting Q2 sales of $417.3 million, below the consensus of $425.5 million.
Tesla (TSLA) is down more than -1% after US auto safety regulators opened a probe into the company over incidents in which vehicles ran through red lights and violated other traffic laws while using the driver-assistance system.
Sonoco Products (SON) is down more than -1% after Bank of America Global Research downgraded the stock to neutral from buy.
Graphic Packaging Holding (GPK) is down more than -1% after Bank of America Global Research downgraded the stock to neutral from buy.
Delta Air Lines (DAL) is up more than +5% after it raised its full-year adjusted EPS forecast to about $6.00 from a previous estimate of $5.25-$6.25. Also, United Airlines Holdings (UAL) is up more than +3% on the news.
Rare earth stocks are moving higher today after China unveiled new restrictions on rare earth exports. As a result, Critical Metals (CRML) is up more than +29%, Ramaco Resources (METC) is up more than +13%, and MP Materials (MP) is up more than +9%.
Serve Robotics (SERV) is up more than +19% after DoorDash added the company as an autonomous delivery partner.
Akero Therapeutics (AKRO) is up more than +17% after Novo Nordisk agreed to buy the company for about $4.7 billion, or $54 per share.
Albemarle (ALB) is up more than +7% to lead gainers in the S&P 500 after TD Cowen raised its price target on the stock to $85 from $70.
Nvidia (NVDA) is up more than +2% to lead gainers in the Nasdaq 100 and Dow Jones Industrials after Cantor Fitzgerald raised its price target on the stock to $300 from $240.
Costco Wholesale (COST) is up more than +2% after reporting that its September total comparable sales rose +5.7%, stronger than the consensus of +4.6%.
PepsiCo (PEP) is up more than +2% after reporting Q3 net revenue of $23.94 billion, better than the consensus of $23.85 billion.
Earnings Reports(10/9/2025)
Apogee Enterprises Inc (APOG), Applied Digital Corp (APLD), Byrna Technologies Inc (BYRN), Delta Air Lines Inc (DAL), Helen of Troy Ltd (HELE), Neogen Corp (NEOG), Oil-Dri Corp of America (ODC), Park Aerospace Corp (PKE), PepsiCo Inc (PEP).
