The S&P 500 Index ($SPX) (SPY) today is up +0.66%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +1.21%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.47%. September E-mini S&P futures (ESU25) are up +0.64%, and September E-mini Nasdaq futures (NQU25) are up +0.50%.
Stock indexes are rallying today, with the S&P 500, the Dow Jones Industrials, and the Nasdaq 100 all posting new all-time highs. Stocks are supported after today’s as-expected Aug CPI report, and an unexpected surge in weekly jobless claims to a 3.75-year high knocked bond yields lower and cemented expectations for Fed rate cuts. The 10-year T-note yield fell to a 5-month low of 3.99%.
US weekly initial unemployment claims unexpectedly rose by +27,000 to a 3.75-year high of 263,000, showing a weaker labor market than expectations of a decline to 235,000.
US Aug CPI increased to +2.9% y/y from +2.7% y/y in July, right on expectations. Aug CPI ex-food and energy rose +3.1% y/y, unchanged from July and right on expectations.
Market focus this week will be on any trade or tariff news. On Friday, the University of Michigan’s Sep US consumer sentiment index is expected to slip -0.2 to 58.0.
The markets are now pricing in a 100% chance of a -25 bp rate cut and a 12% chance of a -50 bp rate cut at the upcoming FOMC meeting on Sep 16-17. After the fully expected -25 bp rate cut at the Sep 16-17 meeting, the markets are discounting a 100% chance of a second -25 bp rate cut at the Oct 28-29 meeting. The markets are now pricing in an overall -73 bp rate cut in the federal funds rate by year-end to 3.60% from the current 4.33% rate.
Overseas stock markets today are higher. The Euro Stoxx 50 is up +0.47%. China’s Shanghai Composite rose to a 1-week high and closed up +1.65%. Japan’s Nikkei Stock 225 rallied to a new all-time high and closed up +1.22%.
Interest Rates
December 10-year T-notes (ZNZ5) today are up by +6 ticks. The 10-year T-note yield is down by -3.1 bp to 4.015%. T-notes today climbed to a 5-month high, and the 10-year T-note yield dropped to a 5-month low of 3.992%. T-note prices whipsawed higher today after US Aug CPI came in right on expectations, but weekly initial unemployment claims unexpectedly soared to a 3.75-year high, a dovish factor for Fed policy and cementing expectations for at least a 25 bp rate cut at next week’s FOMC meeting. The markets are now pricing in an overall -73 bp rate cut in the federal funds rate by year-end to 3.60% from the current 4.33% rate.
Today’s rally in the S&P 500 to a new record high is limiting gains in T-notes. Also, supply pressures are negative for T-notes as the Treasury will auction $22 billion of 30-year T-bonds later today to conclude this week’s auction of $119 billion of T-notes and T-bonds.
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 mixed. The 10-year German bund yield is up +1.0 bp to 2.662%. The 10-year UK gilt yield fell to a 4-week low of 4.596% and is down -1.6 bp to 4.616%.
As expected, the ECB kept its deposit facility rate unchanged at 2.00% and said, “Inflation is currently around the 2% medium-term target and the Governing Council’s assessment of the inflation outlook is broadly unchanged.”
The ECB raised its 2025 Eurozone GDP estimate to +1.2% from a June forecast of +0.9% and maintained its 2025 Eurozone inflation ex-food and energy estimate at 2.4%.
ECB President Lagarde said the ECB now sees growth risks in the Eurozone as more balanced and the disinflationary process is over, signaling the ECB is done cutting interest rates.
Swaps are discounting a 3% chance for a -25 bp rate cut by the ECB at the October 30 policy meeting.
US Stock Movers
Micron Technology (MU) is up more than +9% to lead semiconductor stocks higher after Citigroup raised its price target on the stock to $175 from $150. Also, Lam Research (LRCX) is up more than +6% and Applied Materials (AMAT) is up more than +3%. In addition, KLA Corp (KLAC) is up more than +2%, and ASML Holding NV (ASML) and ARM Holdings Plc (ARM) are up more than +1%.
Home builders and home building suppliers are climbing today after the 10-year T-note yield fell to a 5-month low, which will lower mortgage rates and is supportive of housing demand. Builders FirstSource (BLDR) is up more than +5%. Also, PulteGroup (PHM), Lennar (LEN), DR Horton (DHI), and Toll Brothers (TOL) are up more than +2%.
Centene (CNC) is up more than +12% to lead gainers in the S&P 500 after forecasting full-year adjusted EPS of $1.75, better than the consensus of $1.64.
Red Cat Holdings (RCAT) is up more than +25% after the drone company said its Black Widow system had been approved and added to the NATO Support and Procurement Agency catalog.
Oxford Industries (OXM) is up more than +24% after reporting Q2 adjusted EPS of $1.26, stronger than the consensus of $1.18.
Revolution Medicines (RVMD) is up more than +14% after reporting “highly encouraging initial clinical results” in a Phase 1 trial of daraxonrasib in treating pancreatic cancer.
Celsius Holdings (CELH) is up more than +2% after Goldman Sachs initiated coverage of the stock with a buy recommendation and a price target of $72.
Thermo Fisher Scientific (TMO) is up more than +2% after Barclays upgraded the stock to overweight from equal weight with a price target of $550.
Atlassian Corp (TEAM) is up more than +1% after Guggenheim Securities initiated coverage on the stock with a buy recommendation and a price target of $225.
Energy producers and energy service providers are under pressure today with the price of WTI crude oil down nearly -2%. As a result, APA Corp (APA), Occidental Petroleum (OXY), Devon Energy (DVN), and Diamondback Energy (FANG) are down more than -1%. Also, ConocoPhillips (COP) is down -0.92%.
Avidity Biosciences (RNA) is down more than -19% after announcing it intends to offer $500 million in shares of its common stock in an underwritten public offering.
Advanced Micro Devices (AMD) is down more than -2% to lead losers in the Nasdaq 100 after Erste Group downgraded the stock to hold from buy.
Netflix (NFLX) is down more than -2% after Chief Product Officer Kim announced she is leaving the company.
Earnings Reports(9/11/2025)
Adobe Inc (ADBE), Frequency Electronics Inc (FEIM), IBEX Holdings Ltd (IBEX), KalVista Pharmaceuticals Inc (KALV), Kestra Medical Technologies Ltd (KMTS), Kroger Co/The (KR), Lovesac Co/The (LOVE), RH (RH).
