The S&P 500 Index ($SPX) (SPY) today is up +0.40%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.84%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.07%. December E-mini S&P futures (ESZ25) are up +0.37%, and December E-mini Nasdaq futures (NQZ25) are up +0.04%.
Stock indexes are moving higher today, with the S&P 500, Nasdaq 100, and Dow Jones Industrials posting new all-time highs. Chip makers and AI-infrastructure stocks are rallying today, leading the broader market higher on optimism that growth in the AI sector will translate into corporate profits. Stocks are climbing today despite the US government being shut down for a third day. Stock indexes fell back from their best levels after the Sep ISM services index dropped more than expected to a 4-month low.
The government shutdown means a delay in the release of government reports, including today’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 a shutdown, which would expand jobless claims and push the unemployment rate up to 4.7%.
The US Sep S&P composite PMI was revised upward by +0.3 to 53.9 from the previously reported 53.6.
The US Sep ISM services index fell -2.0 to a 4-month low of 50.0, weaker than expectations of 51.7. The Sep ISM services price paid sub-index unexpectedly rose +0.2 to 69.4, higher than expectations of a decline to 68.0.
Comments today from Chicago Fed President Austan Goolsbee were hawkish and negative for stocks as he cautioned against the Fed front-loading too many interest rate cuts, saying, “The uptick of inflation that we’ve been seeing, coupled with the jobs, payroll numbers deteriorating, have put the Fed in a bit of a sticky spot where you’re getting deterioration of both sides of the mandate at the same time.”
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. Also, S&P companies are expected to post +6.9% earnings growth in Q3, up from +6.7% as of the end of May.
The markets are pricing in a 98% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29.
Overseas stock markets today are higher. The Euro Stoxx 50 is up +0.01%. China’s Shanghai Composite did not trade and is closed for the week-long Lunar New Year holiday. Japan’s Nikkei Stock 225 climbed to a 1-week high and closed up +1.85%.
Interest Rates
December 10-year T-notes (ZNZ5) today are down -7 ticks. The 10-year T-note yield is up +3.5 bp to 4.117%. Dec T-notes gave up an early advance and turned lower today due to hawkish comments from Chicago Fed President Austan Goolsbee, who cautioned against the Fed front-loading too many interest rate cuts. T-notes were also pressured after the Sep ISM services price paid sub-index unexpectedly rose, a sign of price pressures in the service sector.
Dec T-notes initially moved higher today and matched their 1-week high, and the 10-year T-note yield fell to a 2-week low of 4.077%. T-notes garnered support after the Sep ISM services index fell more than expected to a 4-month low. The ongoing US government shutdown is also boosting T-notes on concerns that a protracted shutdown could weaken the economy, a supportive factor for T-notes.
European government bond yields are mixed today. The 10-year German bund yield rebounded from a 2-week low of 2.690% and is up +0.4 bp at 2.703%. The 10-year UK gilt yield is down -1.4 bp to 4.696%.
Eurozone Sep PPI fell -0.3% m/m and -0.6% y/y, weaker than expectations of -0.1% m/m and -0.4% y/y, with the -0.6% y/y fall the largest year-over-year decline in 9 months.
The UK Sep S&P composite PMI was revised downward by -0.9 to a 5-month low of 50.1 from the previously reported 51.0.
ECB Governing Council member Wunsch stated that ECB policymakers have found the “perfect calibration” for interest rates and policy settings, which are appropriate to ensure that consumer prices rise in line with the 2% target in the medium term.
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
Chip makers and AI-infrastructure stocks are moving higher today and are supporting gains in the broader market. Micron Technology (MU) is up more than +3%, and Microchip Technology (MCHP) is up more than +2%. Also, GlobalFoundries (GFS), ON Semiconductor Corp (ON), NXP Semiconductors NV (NXPI), Analog Devices (ADI), and Texas Instruments (TXN) are up more than +1%.
Humana (HUM) is up more than +5% and added to Thursday’s +4% jump to lead managed health care companies higher and gainers in the S&P 500 after it reaffirmed its earnings guidance for 2025. Also, Cigna Group (CI) is up more than +5%, and Centene (CNC) and Elevance Health (ELV) are up more than +4%. In addition, Molina Healthcare (MOH) is up more than +3% and UnitedHealth Group (UNH) is up more than +3% to lead gainers in the Dow Jones Industrials.
Fair Isaac Corp (FICO) is up more than +4%, adding to Thursday’s +17% surge after announcing it will sell credit scores directly to mortgage resellers, reducing their reliance on credit bureaus.
Knight-Swift Transportation Holdings (KNX) is up more than +4% after Stifel upgraded the stock to buy from hold with a price target of $45.
Zillow Group (ZG) is up more than +3% after Gordon Haskett upgraded the stock to buy from hold with a price target of $90.
Southwest Airlines (LUV) is up more than +2% after Susquehanna Financial raised its price target on the stock to $35 from $30.
Freeport-McMoRan (FCX) is up more than +2% after UBS upgraded the stock to buy from neutral with a price target of $48.
Entergy (ETR) is up more than +2% after Scotiabank upgraded the stock to sector outperform from sector perform with a price target of $105.
Occidental Petroleum (OXY) is up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $60.
US-listed Macau-linked casino stocks are sliding today after Citigroup said national passenger data from China’s travel ministry for the first two days of the Golden Week holiday was weaker than expected. Wynn Resorts Ltd (WYNN) is down more than -6% to lead losers in the S&P 500. Also, Las Vegas Sands (LVS) is down more than -5%, and MGM Resorts International (MGM) is down more than -2%.
Palantir Technologies (PLTR) is down more than -3% to lead losers in the Nasdaq 100 after Reuters reported that an Army memo said the company’s battlefield communications network has serious “fundamental security” flaws.
Applied Materials (AMAT) is down more than -2% after saying its net revenue for fiscal year 2026 is set to decrease by $600 million due to a new rule by the US Department of Commerce’s Bureau of Industry and Security.
Hecla Mining (HL) is down more than -3% after Roth Capital Partners downgraded the stock to sell from neutral with a price target of $8.75.
Corteva (CTVA) is down nearly -1% after KeyBanc Capital Markets downgraded the stock to sector weight from overweight.
Earnings Reports(10/3/2025)
C&F Financial Corp (CFFI), Lifecore Biomedical Inc (LFCR), Pathward Financial Inc (CASH).
