On Tuesday, U.S. equity benchmarks finished higher after early declines, supported by softer economic indicators that strengthened expectations for a Federal Reserve interest rate reduction in December. The S&P 500 Index ($SPX) advanced 0.91%, the Dow Jones Industrial Average ($DOWI) climbed 1.43%, and the Nasdaq 100 ($IUXX) rose 0.58%. Futures contracts for the S&P 500 and Nasdaq 100 also posted gains, rising 0.90% and 0.56% respectively.
Markets initially dipped due to a more than 2% drop in Nvidia shares, following a report from The Information that Meta Platforms is considering large-scale purchases of Google’s AI processors, known as tensor processing units (TPUs), for use in data centers by 2027. This development signals growing competition for Nvidia in the artificial intelligence chip market.
However, broader sentiment improved as multiple economic releases pointed to cooling activity. September retail sales increased by just 0.2% month-over-month, below the anticipated 0.4%. Core producer price inflation, excluding food and energy, rose 2.6% year-over-year, trailing the expected 2.7%. Additionally, private sector employment data from ADP showed an average weekly decline of 13,500 jobs over the four weeks ending November 8. Consumer confidence in November dropped to 88.7, down 6.8 points and marking a seven-month low, falling short of forecasts at 93.3.
These figures contributed to a decline in the 10-year Treasury yield, which fell to 3.99%, a 3.5-week low. Lower yields typically support equity valuations and increase the likelihood of monetary easing. Market pricing now reflects an 80% probability of a 25 basis point rate cut at the Federal Open Market Committee meeting on December 9–10.
In corporate news, Kohl’s (KSS) surged over 42% after reporting third-quarter sales of $3.41 billion, surpassing the $3.33 billion consensus, and revising its full-year comparable sales outlook to between -2.5% and -3.0%, ahead of analyst expectations. Symbotic (SYM) jumped more than 39% on stronger-than-expected quarterly revenue of $618.5 million and an optimistic forecast for the next quarter.
Homebuilders rallied as lower bond yields boosted housing sector sentiment. Builders FirstSource (BLDR) gained over 8%, while DR Horton (DHI), Toll Brothers (TOL), and Lennar (LEN) each rose more than 6%. PulteGroup (PHM) and Mohawk Industries (MHK) also posted solid gains.
Casino-related equities climbed after Nevada gaming revenue for October rose 8.2% year-over-year to $748.9 million. MGM Resorts (MGM) and Penn Entertainment (PENN) both advanced over 5%, with Caesars Entertainment (CZR), Wynn Resorts (WYNN), and Las Vegas Sands (LVS) also posting positive returns.
Elsewhere, Keysight Technologies (KEYS) rose over 10% after reporting revenue of $1.42 billion, beating estimates, and issuing a strong outlook. Zoom Communications (ZM), Analog Devices (ADI), and Best Buy (BBY) also delivered upbeat results and raised forecasts, contributing to gains in their share prices.
On the downside, Nvidia (NVDA) declined more than 2% amid competitive concerns, while Oracle (ORCL) dropped after a downgrade from CFRA. Coherent Corp (COHR) fell following a stake reduction by Bain Capital.
Internationally, European and Asian markets also closed in positive territory, with the Euro Stoxx 50 up 0.82%, China’s Shanghai Composite rising 0.87%, and Japan’s Nikkei 225 adding 0.07%.
The week ahead includes key data such as weekly jobless claims, Chicago PMI, and the Fed’s Beige Book. Meanwhile, Q3 earnings season is nearing completion, with 83% of S&P 500 companies having exceeded profit expectations and aggregate earnings up 14.6% year-over-year—more than double initial projections.
— news from Nasdaq
— News Original —
Stocks Settle Higher as US Economic News Lifts Fed Rate Cut Expectations
The S&P 500 Index ($SPX) (SPY) on Tuesday closed up by +0.91%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up by +1.43%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +0.58%. December E-mini S&P futures (ESZ25) rose +0.90%, and December E-mini Nasdaq futures (NQZ25) rose +0.56%. n nStock indexes shook off early losses on Tuesday and settled higher, with the Dow Jones Industrials posting a 1-week high. Dovish US economic news on Tuesday knocked bond yields lower, strengthened the case for the Fed to cut interest rates at next month’s FOMC meeting, and pushed stocks higher. Sep retail sales and Sep core PPI rose less than expected, ADP’s weekly data showed private payrolls declined, and Nov consumer confidence fell more than expected, knocking the 10-year T-note yield to a 3.5-week low of 3.99% and increasing the chance of a Fed rate cut at the December 9-10 FOMC meeting to 80%. n nJoin 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily. n nStocks initially opened lower on Tuesday after Nvidia fell more than -2% to weigh on chip stocks after The Information reported that Meta Platforms is in talks to spend billions on Google’s AI chips, known as tensor processing units (TPUs), in data centers in 2027. An agreement would suggest that Google is making headway in efforts to rival Nvidia’s AI accelerator chips and would help establish TPUs as an alternative to Nvidia’s chips. n nUS Sep retail sales rose +0.2% m/m, weaker than expectations of +0.4% m/m. Sep retail sales ex-autos rose +0.3% m/m, right on expectations. n nUS Sep PPI final demand rose +2.7% y/y, stronger than expectations of +2.6% y/y. However, Sep PPI ex-food and energy rose +2.6% y/y, weaker than expectations of +2.7% y/y. n nThe US Sep S&P CaseShiller composite-20 home price index rose +1.36% y/y, weaker than expectations of +1.40% y/y and the smallest pace of increase in more than two years. n nThe latest weekly update from ADP showed US private payrolls fell -13,500 a week, on average, in the four weeks ending November 8. n nThe Conference Board US Nov consumer confidence index fell -6.8 to a 7-month low of 88.7, weaker than expectations of 93.3. n nUS Oct pending home sales rose +1.9% m/m, stronger than expectations of +0.2% m/m. n nThe Bureau of Labor Statistics (BLS) canceled its October consumer price report last Friday and said the November report will be released on December 18. Last Wednesday, the BLS said it would not publish an October employment report and noted that it would incorporate those payroll figures into the November report, scheduled for publication on December 16. n nThe markets will look to this week’s economic news for direction. Wednesday brings weekly initial unemployment claims (expected +5,000 to 225,000), Sep capital goods new orders nondefense ex-aircraft and parts (expected +0.2% m/m), the Nov MNI Chicago PMI (expected unchanged at 43.8), and the Fed Beige Book. n nThe markets are discounting an 80% chance of another -25 bp rate cut at the next FOMC meeting on December 9-10. n nQ3 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. n nOverseas stock markets settled higher on Tuesday. The Euro Stoxx 50 closed up +0.82%. China’s Shanghai Composite closed up +0.87%. Japan’s Nikkei Stock 225 closed up +0.07%. n nInterest Rates n nDecember 10-year T-notes (ZNZ5) on Tuesday closed up by +8.5 ticks. The 10-year T-note yield fell -2.3 bp to 4.002%. Dec T-notes climbed to a 1-month high on Tuesday, and the 10-year T-note yield fell to a 3.5-week low of 3.987%. T-notes found support after Tuesday’s US economic news showed that Sep retail sales and Sep core PPI rose less than expected, weekly ADP data showed private payrolls declined, and Nov consumer confidence fell more than expected, all of which are dovish for Fed policy. Also, falling inflation expectations are bullish for T-notes after the 10-year breakeven inflation rate fell to a 7.25-month low of 2.212% on Tuesday. T-notes jumped to their highs Tuesday afternoon on strong demand for the Treasury’s $70 billion auction of 5-year T-notes, which had a bid-to-cover ratio of 2.41, above the 10-auction average of 2.37. n nTuesday’s rally in stocks limited gains in T-notes. Also, supply pressures are negative for T-notes as the Treasury auctioned $28 billion 2-year floating rate notes and $70 billion 5-year T-notes on Tuesday as part of this week’s slate of $211 billion in T-notes and floating-rate note auctions. n nEuropean government bond yields moved lower on Tuesday. The 10-year German bund yield dropped to a 1-week low of 2.665% and finished down -2.0 bp to 2.672%. The 10-year UK gilt yield fell to a 1-week low of 4.483% and finished down -4.3 bp to 4.494%. n nSwaps are discounting a 2% chance for a -25 bp rate cut by the ECB at its next policy meeting on December 18. n nUS Stock Movers n nStrength in the Magnificent Seven Technology stocks, sans Nvidia, was a supportive factor for the overall market. Meta Platforms (META) closed up more than +3%, and Alphabet (GOOGL) and Amazon.com (AMZN) closed up more than +1%. Also, Microsoft (MSFT) closed up +0.63%, Apple (AAPL) closed up +0.38%, and Tesla (TSLA) closed up +0.39%. n nHome builders and home building suppliers rallied on Tuesday after the 10-year T-note yield fell to a 3.5-week low of 3.99%, a supportive factor for housing demand. Builders FirstSource (BLDR) closed up more than +8%, and DR Horton (DHI), Toll Brothers (TOL), and Lennar (LEN) closed up more than +6%. Also, PulteGroup (PHM) closed up more than +5% and Mohawk Industries (MHK) closed up more than +4%. n nCasino stocks moved higher on Tuesday after the Nevada Gaming Control Board reported that October Las Vegas Strip gambling revenue rose 8.2% y/y to $748.9 million. MGM Resorts International (MGM) and Penn Entertainment (PENN) closed up more than +5%. Also, Caesars Entertainment (CZR) closed up more than +4%, Wynn Resorts Ltd (WYNN) closed up more than +3%, and Las Vegas Sands (LVS) closed up more than +2%. n nKohl’s (KSS) closed up more than +42% after reporting Q3 met sales of $3.41 billion, better than the consensus of $3.33 billion, and raising its full-year comparable sales forecast to -2.5% to -3.0% from a previous forecast of -4% to -5%, above the consensus of -4.19%. n nSymbotic (SYM) closed up more than +39% after reporting Q4 revenue of 618.5 million, better than the consensus of $605.1 million, and forecasting Q1 revenue of $610 million to $630 million, well above the consensus of $606.8 million. n nAmentum Holdings (AMTM) closed up more than +18% after reporting Q4 pro forma revenue of $3.93 billion, stronger than the consensus of $3.61 billion. n nKeysight Technologies (KEYS) closed up more than +10% to lead gainers in the S&P 500 after reporting Q4 revenue of $1.42 billion, stronger than the consensus of $1.38 billion, and forecasting Q1 revenue of $1.53 billion to $1.55 billion, well above the consensus of $1.42 billion. n nZoom Communications (ZM) closed up more than +9% after reporting Q3 revenue of $1.23 billion, above the consensus of $1.21 billion, and raising its 2026 revenue forecast to $4.85 billion-$4.86 billion from a previous estimate of $4.83 billion-$4.84 billion, better than the consensus of $4.83 billion. n nAnalog Devices (ADI) closed up more than +5% to lead gainers in the Nasdaq 100 after reporting Q4 revenue of $3.08 billion, stronger than the consensus of $3.02 billion, and forecasting Q1 revenue of $3.0 billion to $3.2 billion, above the consensus of $2.97 billion. n nBest Buy (BBY) closed up more than +5% after reporting Q3 revenue of $9.67 billion, stronger than the consensus of $9.58 billion, and raising its 2026 revenue forecast to $41.65 billion-$41.95 billion from a previous forecast of $41.1 billion-$41.9 billion, the midpoint above the consensus of $41.77 billion. n nBurlington Stores (BURL) closed down more than -11% after reporting Q3 revenue of $2.71 billion, below the consensus of $2.72 billion. n nJ M Smucker (SJM) closed down more than -3% after cutting the top end of its full-year guidance, lowering its 2026 net sales forecast to +3.5% to +4.5% from a previous forecast of +3% to +5%. n nNvidia (NVDA) closed down more than -2% to lead losers in the Dow Jones Industrials after The Information reported that Meta Platforms is in talks to spend billions on Google’s AI chips, suggesting Google is making headway in efforts to rival Nvidia’s dominance in AI chips. n nOracle (ORCL) closed down more than 2% after CFRA downgraded the stock to hold from buy and cut its price target to $230 from $350. n nCoherent Corp (COHR) closed down more than -2% after Bain Capital cut its stake in the company for the second time this month via a $1.14 billion unregistered block trade. n nEarnings Reports(11/26/2025) n nDeere & Co (DE). n nOn 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. For more information please view the Barchart Disclosure Policy here. n nMore news from Barchart n nGoogle is Winning the AI Race by Stealing Exxon’s Business Model. Here’s How. n nA $4 Billion Reason to Buy Nokia Stock Now n nWhy Investors Are Suddenly Watching Nebius Stock Closely n nThe views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc