The S&P 500 Index ($SPX) (SPY) on Friday closed up by +0.19%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up by +0.22%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +0.43%. December E-mini S&P futures (ESZ25) rose +0.19%, and December E-mini Nasdaq futures (NQZ25) rose up +0.43%.
Stock indexes settled higher on Friday, with the S&P 500 climbing to a 5-week high, the Nasdaq 100 reaching a 1-month high, and the Dow Jones Industrial Average hitting a 3-week high. Optimism about the economic outlook and the prospects of Fed rate cuts are supporting stock prices. Market seasonals are also supportive of stocks, as December is typically a bullish month. Strength in semiconductor stocks on Friday was another supportive factor for the broader market.
Stocks also rose on Friday on benign inflation news after the Sep core PCE price index rose as expected, and the University of Michigan’s US December inflation expectations eased to an 11-month low. In addition, the University of Michigan US Dec consumer sentiment index rose more than expected. Gains in stocks were limited amid rising bond yields, with the 10-year T-note hitting a 2-week high of 4.14% on Friday.
US Sep personal spending rose +0.3% m/m, right on expectations. Sep personal income rose +0.4% m/m, stronger than expectations of +0.3% m/m.
The US Sep core PCE price index, the Fed’s preferred inflation gauge, rose +0.3% m/m and +2.8% y/y, right on expectations.
The University of Michigan US Dec consumer sentiment index rose by +2.3 to 53.3, stronger than expectations of 52.0.
The University of Michigan US Dec 1-year inflation expectations eased to 4.1%, better than expectations of no change at 4.5% and the smallest pace of increase in 11 months. Dec 5-10 year inflation expectations eased to +3.2%, better than expectations of no change at 3.4% and the smallest pace of increase in 11 months.
President Trump said on Tuesday that he will announce his selection for the new Fed Chair in early 2026. Bloomberg reported last week that National Economic Council Director Kevin Hassett is seen as the likely choice to succeed Powell. The Fed’s independence would come into question, as Hassett supports President Trump’s approach to cutting interest rates at the Fed.
The markets are discounting a 95% chance of another -25 bp rate cut at the next FOMC meeting on December 9-10.
Q3 corporate earnings season is drawing to a close as 475 of the 500 S&P companies have released results. According to Bloomberg Intelligence, 83% of reporting S&P 500 companies exceeded forecasts, on course for the best quarter since 2021. Q3 earnings rose +14.6%, more than doubling expectations of +7.2% y/y.
Overseas stock markets settled mixed on Friday. The Euro Stoxx 50 rose to a 3-week high and closed up +0.10%. China’s Shanghai Composite closed up +0.70%. Japan’s Nikkei Stock 225 closed down -1.05%.
Interest Rates
March 10-year T-notes (ZNH6) on Friday closed down -6.5 ticks. The 10-year T-note yield rose +4.1 bp to 4.139%. Mar T-note futures fell to a 2-week low on Friday, and the 10-year T-note yield rose to a 2-week high of 4.143%. Friday’s strength in stocks curbed safe-haven demand for T-notes. Also, rising inflation expectations are bearish for T-notes after the 10-year breakeven inflation rate rose to a 2-week high of 2.284% on Friday. In addition, T-notes were weighed down by negative carryover from a fall in Japanese 10-year JGB bond prices to an 18-year low today, amid prospects for a BOJ rate hike later this month.
Losses in T-notes are limited today due to favorable inflation news after the Sep core PCE price index rose as expected, and the University of Michigan US December inflation expectations eased to an 11-month low.
European government bond yields are moving higher today. The 10-year German bund yield matched an 8-month high of 2.801% and finished up by +2.8 bp to 2.798%. The 10-year UK gilt yield rose by +4.2 bp to 4.476%.
Eurozone Q3 GDP was revised up slightly to +0.3% q/q and +1.4% y/y from the previously reported +0.2% q/q and +1.4% y/y.
German Oct factory orders rose +1.5% m/m, stronger than expectations of +0.3% m/m.
Swaps are discounting a 1% chance for a -25 bp rate cut by the ECB at its next policy meeting on December 18.
US Stock Movers
Strength in chip makers on Friday was a bullish factor for the overall market. Micron Technology (MU) closed up more than +4% and GlobalFoundries (GFS) closed up more than +3%. Also, Intel (INTC) and Broadcom (AVGO) closed up more than +2%. In addition, Microchip Technology (MCHP), Texas Instruments (TXN), NXP Semiconductors NV (NXPI), Analog Devices (ADI), and Lam Research (LRCX) closed up more than +1%.
Cryptocurrency-exposed stocks retreated on Friday after Bitcoin (^BTCUSD) fell more than -3%. Galaxy Digital Holdings (GLXY) closed down more than -7% and MARA Holdings (MARA) closed down more than -5%. Also, Riot Platforms (RIOT) closed down more than -4% and Strategy (MSTR) closed down more than -3% to lead losers in the Nasdaq 100. In addition, Coinbase Global (COIN) closed down more than -1%.
Rubrick (RBRK) closed up more than +21% after reporting Q3 total revenue of $350.2 million, well above the consensus of $320.5 million, and raising its 2026 revenue forecast to $1.28 billion from a previous forecast of $1.23 billion-$1.24 billion, stronger than the consensus of $1.23 billion.
Ulta Beauty (ULTA) closed up more than +12% to lead gainers in the S&P 500 after reporting Q3 net sales of $2.86 billion, stronger than the consensus of $2.71 billion, and raising its full-year net sales forecast to $12.3 billion from a previous forecast of $12.0 billion to $12.1 billion.
ServiceTitan (TTAN) closed up more than +9% after reporting a Q3 loss of -42 cents per share, smaller than the consensus of -45 cents.
Warner Bros Discovery (WBD) closed up more than +6% to lead gainers in the Nasdaq 100 after being acquired by Netflix for about $72 billion or $27.75 a share.
Salesforce (CRM) closed up more than +5% to lead gainers in the Dow Jones Industrials, adding to Thursday’s +3% gain after raising its 2026 adjusted EPS forecast.
Cooper Cos (COO) closed up more than +5% after reporting Q4 adjusted EPS of $1.15, better than the consensus of $1.11, and forecasting 2026 adjusted EPS of $4.45-$4.60, stronger than the consensus of $4.39.
Albemarle (ALB) closed up more than +5% after UBS upgraded the stock to buy from neutral with a price target of $185.
Humana (HUM) closed up more than +1% after Jeffries upgraded the stock to buy from hold with a price target of $313.
Parsons Corp (PSN) closed down more than -21% after the US Federal Aviation Administration and the Department of Transportation awarded the new air traffic control system contract to rival Peraton.
SentinelOne (S) closed down more than -15% after forecasting a Q4 adjusted operating margin of 5%, weaker than the consensus of 7.11%.
DocuSign (DOCU) closed down more than -8% after forecasting Q4 revenue of $825 million to $829 million, the midpoint below the consensus $827.4 million.
Oklo Inc (OKLO) closed down more than -7% after entering into an equity distribution agreement with nine financial institutions to sell up to $1.5 billion of its Class A common stock through an “at the market” equity offering program.
SoFi Technologies (SOFI) closed down more than -6% after offering 54.5 million shares of its common stock at $27.50 a share, below Thursday’s closing price of $29.60.
Netflix (NFLX) closed down more than -2% after agreeing to buy Warner Bros Discovery for $72 billion.
Earnings Reports(12/8/2025)
Barnes & Noble Education Inc (BNED), Compass Minerals International (CMP), Mama’s Creations Inc (MAMA), Oil-Dri Corp of America (ODC), Ooma Inc (OOMA), Phreesia Inc (PHR), Rezolve AI PLC (RZLV), Toll Brothers Inc (TOL).
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