The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +0.21%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +1.18%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.31%.  December E-mini S&P futures (ESZ25) rose +0.26%, and December E-mini Nasdaq futures (NQZ25) fell -0.23%.

US stock indexes settled mostly higher on Tuesday, with the S&P 500 posting a 1-week high and the Dow Jones Industrials posting a 1.5-week high. Optimism that the US government shutdown is nearing an end is supporting stocks.  After the Senate voted 60-40 on Monday to pass a temporary continuing resolution (CR) to fund the government, the House is expected to vote on the measure on Wednesday, and House Speaker Johnson said he expects it will pass quickly. If approved, the bill goes to President Trump, who said he will sign it into law.  Trading activity may be below average on Tuesday, as cash trading in Treasuries was closed for the Veterans Day holiday.

The Nasdaq 100 was under pressure on Tuesday due to weakness in AI-infrastructure stocks and semiconductor makers.  CoreWeave fell more than -16% to lead AI stocks lower after it said a data center delay would negatively impact Q4 earnings expectations. Also, Nvidia closed down by more than -2% after SoftBank Group sold its entire stake in the company for $5.83 billion. 

Also weighing on stocks on Tuesday was a weekly report from ADP that showed US private employers shed an average of 11,250 jobs per week over the four weeks ending October 25, 2025, suggesting the labor market has weakened. In addition, the US Oct NFIB small business optimism index fell -0.6 to a 6-month low of 98.2, weaker than expectations of 98.3.

On Sunday, a group of eight Senate Democrats broke with their party to vote with Republicans to advance a bill to reopen the government.  The bill would provide full-year funding for some departments, fund other agencies through January 30, and provide pay for furloughed government workers.  The bill will also resume withheld federal payments to states and localities and recall agency employees who were laid off during the shutdown.

The markets are discounting a 67% chance of another -25 bp rate cut at the next FOMC meeting on December 9-10.

Q3 corporate earnings season is nearly over, as 456 of the S&P 500 companies have reported earnings results.  According to Bloomberg Intelligence, 82% 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 Tuesday.  The Euro Stoxx 50 rose to a 1.5-week high and closed up +1.08%.  China’s Shanghai Composite fell from a 1.5-week high and closed down -0.39%.  Japan’s Nikkei Stock 225 closed down -0.14%.

Interest Rates

December 10-year T-notes (ZNZ5) on Tuesday closed up by +11 ticks.  The cash Treasury market was closed on Tuesday for the Veterans Day holiday.  T-notes moved higher Tuesday after a report from ADP showed that private-sector US employers shed more jobs than they created in the four weeks ending October 25, a dovish factor for Fed policy. 

Gains in T-notes were limited amid progress on ending the US government shutdown.  The Senate passed a temporary CR on Monday, and the House will vote on the measure on Wednesday, which is expected to pass and go to President Trump, who said he will sign the bill into law. 

European government bond yields moved lower on Tuesday.  The 10-year German bund yield fell -1.0 bp to 2.658%. The 10-year UK gilt yield fell to a 2-week low of 4.374% and finished down -7.4 bp to 4.387%.

The German Nov ZEW survey expectations of economic growth unexpectedly fell -0.8 to 38.5, versus expectations of an increase to 41.0.

ECB Executive Board member Elderson said the current level of ECB interest rates “is appropriate, but we will continue to be data-dependent and decide on rates one meeting at a time.”

ECB Governing Council member Kocher said, “The ECB is in a good position on interest-rate policy, and the expectation is that not much more will happen in the next few months.”

UK Sep employment change unexpectedly fell -22,000, weaker than expectations of a +5,000 increase and the biggest decline in 1.5 years.  The Sep ILO unemployment rate rose +0.2 to a 4.5-year high of 5.0%, showing a weaker labor market than expectations of 4.9%.

Swaps are discounting a 3% chance for a -25 bp rate cut by the ECB at its next policy meeting on December 18.

US Stock Movers

Recently beaten-down pharmaceutical makers and health insurance stocks rallied on Tuesday, helping support gains in the broader market. Viatris (VRTS) closed up more than +10% to lead gainers in the S&P 500.  Also, Moderna (MRNA) closed up more than +6% and Merck & Co (MRK) closed up more than +4% to lead gainers in the Dow Jones Industrials.  In addition, Amgen (AMGN) and Pfizer (PFE) closed up more than +4%, and Elevance Health (ELV), Gilead Sciences (GILD), Cigna Group (CI), Bristol-Myers Squibb (BMY), Centene (CNC), and Regeneron Pharmaceuticals (REGN) closed up more than +3%.  

Surmodics Inc. (SRDX) closed up more than +49% after a federal court rejected a request by the FTC and some state regulators for a preliminary injunction blocking the company’s acquisition by GTCR. 

RealReal (REAL) closed up more than +37% after boosting its full-year revenue forecast to $687 million-$690 million from a previous forecast of $667 million-$674 million, stronger than the consensus of $675 million. 

Paramount Skydance (PSKY) closed up more than +9% after announcing an additional 1,600-person workforce reduction and a goal to achieve at least $3 billion in cost savings. 

Kodiak Sciences (KOD) closed up more than +6% after HC Wainwright & Co LLC upgraded the stock to buy from neutral with a price target of $24.

FedEx (FDX) closed up more than +5% after CFO Dietrich told investors at an industry conference that the company’s adjusted earnings in its fiscal second quarter will surpass the $4.05 a share generated last year.

Viasat Inc. (VSAT) closed up more than +3% after JPMorgan Chase upgraded the stock to overweight from neutral with a price target of $50.

Linde Plc (LIN) closed up more than +1% after UBS upgraded the stock to buy from neutral with a price target of $500. 

Chip stocks slid on Tuesday, weighing on the Nasdaq 100.  Micron Technology (MU), Marvell Technology (MRVL), and Lam Research (LRCX) closed down more than -4%.  Also, ARM Holdings Plc (ARM) closed down more than -3%, and Advanced Micro Devices (AMD), Applied Materials (AMAT), and KLA Corp (KLAC) closed down more than -2%.  In addition, Broadcom (AVGO), ASML Holding NV (ASML), Intel (INTC), and Microchip Technology (MCHP) closed down more than -1%. 

CoreWeave Inc (CRWV) closed down more than -16% after saying a data center delay will negatively impact Q4 expectations, prompting JPMorgan Chase to downgrade the stock to neutral from overweight. 

Gemini Space Station Inc (GEMI) closed down more than -16% after reporting a Q3 loss of -$6.67 per share, a larger loss than the consensus of -$3.24.

Rigetti Computing (RGTI) closed down more than -5% after reporting Q3 revenue of $1.95 million, below the consensus of $2.17 million. 

Six Flags Entertainment Corp (FUN) closed down more than -5% after CFRA downgraded the stock to hold from buy and cut its price target to $9 from $18.

Nvidia (NVDA) closed down more than -2% to lead losers in the Dow Jones Industrials after Softbank Group sold its entire stake of Nvidia stock for $5.83 billion. 

Earnings Reports(11/12/2025)

Circle Internet Group Inc (CRCL), Cisco Systems Inc (CSCO), Flutter Entertainment PLC (FLUT), GLOBALFOUNDRIES Inc (GFS), Loar Holdings Inc (LOAR), On Holding AG (ONON), Tetra Tech Inc (TTEK), TransDigm Group Inc (TDG).

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