The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.49%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.37%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.70%. December E-mini S&P futures (ESZ25) rose +0.42%, and December E-mini Nasdaq futures (NQZ25) rose +0.68%.
Inventory indexes rallied on Friday, with the S&P 500, the Dow Jones Industrials, and the Nasdaq 100 posting new all-time highs. The prospects for added Fed rate of interest cuts have sparked risk-on sentiment in asset markets and supported shares. Market volatility was close to regular on Friday regardless of the quarterly occasion often called triple-witching, as $5 trillion value of inventory choices, futures, and derivatives expired. Larger bond yields on Friday restricted features in shares, because the 10-year T-note yield rose +2 bp to 4.13%.
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Minneapolis Fed President Neel Kashkari stated he supported the FOMC’s determination to chop rates of interest by 25 bp this week, and he has penciled in two extra cuts this yr.
President Trump spoke with Chinese language President Xi Jinping by phone on Friday to debate a framework settlement to shift management of TikTok’s operations from its Chinese language father or mother, ByteDance Ltd, to a consortium of American buyers. Mr. Trump stated he made progress on many essential points and can meet Xi on the sidelines of the upcoming Asia-Pacific Financial Cooperation Summit in South Korea subsequent month.
Rising company earnings expectations are a bullish backdrop for shares. In response to Bloomberg Intelligence, greater than 22% of firms within the S&P 500 supplied steering for his or her Q3 earnings outcomes which might be anticipated to beat analysts’ expectations, the best in a yr. Additionally, S&P firms are anticipated to publish 6.9% earnings development in Q3, up from 6.7% on the finish of Might.
The markets are pricing in a 92% probability of a -25 bp fee lower on the subsequent FOMC assembly on Oct 28-29.
Abroad inventory markets on Friday settled combined. The Euro Stoxx 50 rose to a 4-week excessive and closed up by +0.03%. China’s Shanghai Composite closed down -0.30%. Japan’s Nikkei Inventory 225 fell from a brand new report excessive and posted a 1-week low and closed down -0.57%.
Curiosity Charges
December 10-year T-notes (ZNZ5) on Friday closed down by -7.5 ticks. The ten-year T-note yield rose by +2.7 bp to 4.131%. T-note costs right this moment prolonged Thursday’s losses and fell to a 2-week low, and the 10-year T-note yield rose to a 2-week excessive of 4.143%. T-notes have been beneath stress Friday on account of energy in shares, which has curbed safe-haven demand for presidency debt securities. Additionally, damaging carryover from Friday’s slide in European authorities bonds to 2-week lows is weighing on T-notes. Dovish feedback on Friday from Minneapolis Fed President Neel Kashkari lifted T-notes off their lows when he stated he has penciled in two extra Fed fee cuts this yr.
Considerations about Fed independence are negatively impacting T-note costs on account of President Trump’s try to fireside Fed Governor Cook dinner and Stephen Miran’s intention to carry a Fed Governor place whereas remaining technically in his White Home position on the Council of Financial Advisors.
European authorities bond yields moved increased on Friday. The ten-year German bund yield rose to a 2-week excessive of two.753% and completed up +2.2 bp at 2.748%. The ten-year UK gilt yield climbed to a 2-week excessive of 4.718% and completed up +3.9 bp at 4.715%.
German Aug PPI fell -0.5% m/m and -2.2% y/y, weaker than expectations of -0.1% m/m and -1.7% y/y, with the -2.2% y/y drop the largest year-on-year decline in 15 months.
UK Aug retail gross sales ex-auto gas rose +0.8% m/m, stronger than expectations of +0.7% m/m and the most important improve in 5 months.
UK Aug authorities borrowing was 18 billion kilos ($24.4 billion), above estimates of 12.5 billion kilos and the best borrowing for the month in 5 years.
ECB Governing Council member Centeno stated, “Development within the Eurozone is under potential and inflation will quickly fall under our goal and keep there for a while. I imagine that it’s extra seemingly than not that now we have to ease financial coverage additional.”
ECB Governing Council member Muller stated the ECB is working a barely accommodative financial coverage and presently has no cause to decrease borrowing prices any additional.
Swaps are discounting a 2% probability for a -25 bp fee lower by the ECB at its subsequent coverage assembly on October 30.
US Inventory Movers
Power within the Magnificent Seven megacap know-how shares is supportive for the general market. Apple (AAPL) closed up greater than +3% and Tesla (TSLA) closed up greater than +2%. Additionally, Alphabet (GOOGL) and Microsoft (MSFT) closed up greater than +1%, Nvidia (NVDA) closed up +0.24%, and Amazon.com (AMZN) closed up +0.11%.
Oracle (ORCL) closed up greater than +4% after Bloomberg reported the corporate is in talks with Meta Platforms for a cloud computing deal value about $20 billion.
Klaviyo Inc (KVYO) closed up greater than +4% after Morgan Stanley upgraded the inventory to obese from equal weight with a worth goal of $50.
CoreWeave (CRWV) closed up greater than +3% after Loop Capital Markets initiated protection on the inventory with a purchase suggestion and a worth goal of $165.
Lincoln Nationwide (LNC) closed up greater than +3% after Morgan Stanley upgraded the inventory to obese from equal weight with a worth goal of $58.
FedEx (FDX) closed up greater than +2% after reporting Q1 adjusted EPS of $3.83, higher than the consensus of $3.59.
Warner Bros Discovery (WBD) closed up greater than +2% after CNBC reported a possible bid for the corporate from Paramount Skydance could possibly be within the $22 to $24 a share vary.
Scholastic Corp (SCHL) closed down greater than -12% after reporting a Q1 adjusted loss per share of -$2.52, a wider loss than the consensus of -$2.44.
Hess Midstream LP (HESM) closed down greater than -10% after saying it expects decrease capital spending in 2026 and 2027, citing suspension of early engineering actions on its Capa fuel plant and elimination of the challenge from its ahead plan.
Cognizant Know-how Options (CTSH) closed down greater than -4% to steer IT consulting shares decrease after Bloomberg Information reported that President Trump will transfer to require a $100,000 charge for H-1B visa purposes. In response to Bloomberg, almost half of H-1B visas went to outsourcing or staffing firms.
Humana (HUM) closed down greater than -4% after Piper Sandler stated the corporate’s CMS star score restoration received’t happen till 2027, signaling improved high quality bonus funds wouldn’t occur till 2028.
Lennar (LEN) closed down greater than -4% after reporting Q3 income of $8.81 billion, under the consensus of $9.05 billion, and forecasting This fall new orders of 20,000 to 21,000, weaker than the consensus of 21,047.
Intel (INTC) closed down greater than -3% after Citigroup downgraded the inventory to promote from impartial with a worth goal of $29.
Earnings Studies(9/22/2025)
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