The S&P 500 Index ($SPX) (SPY) today is down -0.62%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.29%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.09%.
Stock indexes are lower after Monday’s rally pushed the S&P 500, Dow Jones Industrials, and the Nasdaq 100 to new record highs.
At a speech in Rhode Island today, Federal Reserve Chairman Jerome Powell did not offer a clear indication of an October interest rate cut and warned that inflation from tariffs could persist.
The weakness in the Magnificent Seven technology stocks today is a drag on the overall market. Strength in energy producers is a supportive factor for the overall market, with the price of WTI crude up more than +2%.
Gold prices continue to soar, posting a new all-time high today, as dovish global central banks, geopolitical risks, and trade tensions have boosted demand for the metal as a store of value and a safe haven. Dovish Fed comments today knocked bond yields lower and are limiting losses in stocks, with the 10-year T-note yield down -1 bp to 4.13%
The US Q2 current account balance was -$251.3 billion, a smaller deficit than expectations of -$256.6 billion.
The US Sep S&P manufacturing PMI fell -1.0 to 52.0, weaker than expectations of 52.2.
The US Sep Richmond Fed manufacturing sentiment survey unexpectedly fell -10 to -17, versus expectations of an increase to -5.
Chicago Fed President Austan Goolsbee said the Fed is mildly restrictive and the neutral policy rate is 100-125 basis points below the current rate.
Fed Governor Michelle Bowman said, “Now that we have seen many months of deteriorating labor market conditions, it is time for the FOMC to act decisively and proactively to address decreasing labor market dynamism and emerging signs of fragility.”
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 this week will focus on any fresh trade or tariff news. Later today, Fed Chair Powell speaks on the economic outlook at an event at the Greater Providence Chamber of Commerce. On Wednesday, Aug new home sales are expected to decline by -0.3% m/m to 650,000. On Thursday, weekly initial unemployment claims are expected to increase by +2,000 to 233,000. Also, Aug core (ex-defense and aircraft) capital goods new orders are expected to slip -0.1% m/m. In addition, Q2 GDP is expected to be unrevised at +3.3% (q/q annualized). Finally, Aug existing home sales are expected to fall -1.3% m/m to 3.96 million. On Friday, Aug personal spending is expected to be up by +0.5% m/m and Aug personal income is expected to be up by +0.3% m/m. Also, the Aug core PCE price index, the Fed’s preferred inflation gauge, is expected to rise by +0.2% m/m and +2.9% y/y. Finally, the University of Michigan’s Sep US consumer sentiment index is expected to remain unchanged at 55.4.
The markets are pricing in a 91% 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 up +0.70%. China’s Shanghai Composite fell to a 2-week low and closed down -0.18%. Japan’s Nikkei Stock 225 did not trade as markets in Japan are closed today for the Autumnal Equinox Day holiday.
Interest Rates
December 10-year T-notes (ZNZ5) today are up by +2 ticks. The 10-year T-note yield is down by -1.0 bp to 4.137%. T-note prices are slightly higher today on dovish comments from Fed Governor Michelle Bowman, who said policymakers are in danger of falling behind the curve and need to act decisively to cut interest rates as the labor market weakens. Additionally, short-covering ahead of a speech later today by Fed Chair Powell is driving up T-notes. Gains in T-notes are limited due to supply pressures, as the Treasury will auction $211 billion of T-notes and floating-rate notes this week, beginning with today’s $69 billion auction of 2-year T-notes.
European government bond yields today are moving lower. The 10-year German bund yield is down by -0.1 bp at 2.748%. The 10-year UK gilt yield is down -2.2 bp at 4.690%.
The Eurozone Sep S&P manufacturing PMI fell -1.2 to 49.5, weaker than expectations of no change at 50.7. The Sep S&P composite PMI rose +0.2 to 51.2, stronger than expectations of 51.1 and the strongest pace of expansion in 16 months.
The UK Sep S&P manufacturing PMI unexpectedly fell -0.8 to a 5-month low of 46.2, weaker than expectations of an increase to 47.1.
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
The weakness in the Magnificent Seven megacap technology stocks is a drag on the broader market. Amazon.com (AMZN) and Nvidia (NVDA) are down more than -2%. Also, Microsoft (MSFT) is down -0.60%, Tesla (TSLA) is down -0.48%, Alphabet (GOOGL) is down -0.36% and Apple (AAPL) is down -0.25%.
Firefly Aerospace (FLY) is down more than -11% after reporting Q2 revenue of $15.5 million, weaker than the consensus of $16.1 million.
Vistra Corp (VST) is down more than -4% after Jeffries downgraded the stock to hold from buy and cut its price target to $230 from $241.
Kingsoft Cloud Holdings (KC) is down more than -3% after proposing to offer 282 million shares in a placement.
AutoZone (AZO) is down more than -2% after reporting Q4 net sales of $6.24 billion, below the consensus of $6.25 billion.
Americold Realty Trust (COLD) is down more than -1% after JPMorgan Chase downgraded the stock to underweight from neutral.
Energy producers and energy service providers are climbing today, with the price of WTI crude oil up more than +1%. As a result, Halliburton (HAL) is up more than +9% to lead gainers in the S&P 500, and Diamondback Energy (FANG) is up more than +4% to lead gainers in the Nasdaq 100. Also, APA Corp (APA) and Devon Energy (DVN) are up more than +4%. In addition, ConocoPhillips (COP), Schlumberger (SLB), and Valero Energy (VLO) are up more than +3%. Finally, Exxon Mobil (XOM), Occidental Petroleum (OXY), Phillips 66 (PSX), and Marathon Petroleum (MPC) are up more than +2%.
McKesson (MCK) is up more than +6% after raising its 2026 adjusted EPS forecast to $38.05-$38.55 from a prior estimate of $37.10-$37.90, stronger than the consensus of $37.92.
ACM Research (ACMR) is up more than +5% after S&P Dow Jones Indices said the stock will replace WK Kellogg in the S&P SmallCap 600 index before the opening of trading on Friday.
Onto Innovation (ONTO) is up more than +4% after Jeffries upgraded the stock to buy from hold with a price target of $170.
Kenvue (KVUE) is up more than +3% after President Trump’s call for pregnant women to avoid Tylenol has drawn sharp criticism from scientists and researchers who said the advice ignores decades of evidence and could endanger mothers and babies.
Boeing (BA) is up more than +2% after US Ambassador to China Perdue said the US and China are weeks away from finalizing negotiations on a “huge” Boeing order.
MP Materials (MP) is up more than +2% after Daiwa Securities initiated coverage of the stock with a recommendation of outperform and a price target of $80.
Palantir Technologies (PLTR) is up more than +1% to lead gainers in the Nasdaq 100 after the Treasury Department awarded the company a contract relating to data integrity and technical infrastructure.
Earnings Reports(9/23/2025)
AAR Corp (AIR), AutoZone Inc (AZO), Micron Technology Inc (MU), MillerKnoll Inc (MLKN), Worthington Enterprises Inc (WOR).
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. This article was originally published on Barchart.com
