The S&P 500 Index ($SPX) (SPY) today is down -0.19%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.15%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.45%.  December E-mini S&P futures (ESZ25) are down -0.20%, and December E-mini Nasdaq futures (NQZ25) are down -0.43%.

US stock indexes are moving lower today on strong evidence of a cooling US labor market.  Today's report from outplacement firm Challenger, Gray & Christmas showed that US companies announced the most job cuts in any October in more than 20 years. 

However, a decline in bond yields is limiting the downside in stocks. The 10-year T-note yield is down -5 bp to 4.11% in hopes the Fed will continue to cut interest rates after today's weak labor report from Challenger.  Also, strong corporate earnings results are supportive of stocks, with 81% of S&P 500 companies reporting Q3 earnings beating expectations. 

US Oct Challenger job cuts surged +175.3% y/y to 153,074, the largest increase in 7 months and the most for an October in 22 years. Year-to-date job cuts have exceeded 1 million, the most since the pandemic, and US employers have announced the fewest hiring plans since 2011.

Chicago Fed President Austan Goolsbee said that a lack of inflation data during the government shutdown makes him more uneasy about continuing Fed interest rate cuts.

The markets are discounting a 69% chance of another -25 bp rate cut at the next FOMC meeting on December 9-10.

The US Supreme Court appeared skeptical on Wednesday about whether President Trump's reciprocal tariffs are legal.  Chief Justice Roberts and Justices Gorsuch and Coney questioned President Trump's use of an emergency-powers law to collect tariffs, with Roberts saying the tariffs were an "imposition of taxes on Americans, and that has always been the core power of Congress." The Supreme Court is expected to issue its ruling by late this year or early in 2026.  Lower courts have already ruled that Mr. Trump's reciprocal tariffs are illegal, finding they are based on a specious claim of emergency authority under the 1977 International Emergency Economic Powers Act.  If the US Supreme Court upholds those rulings and strikes down the tariffs, then the US government may have to refund the reciprocal and fentanyl-linked tariffs already collected, totaling more than $80 billion, and Mr. Trump's power to impose tariffs may be limited to well-founded sections of US trade law, such as sections 232, 301, and 201.

Q3 corporate earnings season continues at a strong clip this week, with 136 of the S&P 500 companies reporting earnings this week.  According to Bloomberg Intelligence, 81% of the S&P 500 companies that have reported so far have beaten forecasts, on course for the best quarter since 2021.  However, Q3 profits are expected to have risen by +7.2% y/y, the smallest increase in two years.  Also, Q3 sales growth is projected to slow to +5.9% y/y from +6.4% in Q2.

The US government shutdown, now in its sixth week, is the longest in history, weighing on market sentiment and the US economy.  The government shutdown is delaying a host of government reports and is having an adverse effect on the US economy. 

Overseas stock markets are mixed today.  The Euro Stoxx 50 is down -0.40%.  China's Shanghai Composite closed up +0.97%.  Japan's Nikkei Stock 225 fell closed up +1.34%.

Interest Rates

December 10-year T-notes (ZNZ5) today are up by +13 ticks.  The 10-year T-note yield is down -5.5 bp to 4.105%.  Dec T-notes are moving higher today after weak labor news from Challenger showed US employers cut the most jobs in October in the last 22 years and bolstered optimism that the Fed will be able to continue cutting interest rates. T-note prices also have underlying support from the ongoing US government shutdown, which is now the longest in history and could lead to additional job losses, reduced consumer spending, and a weakened US economy, potentially allowing the Fed to continue cutting interest rates. 

European government bond yields are moving lower today.  The 10-year German bund yield is down -0.7 bp to 2.666%. The 10-year UK gilt yield is down -2.5 bp to 4.437%.

Eurozone Sep retail sales unexpectedly fell -0.1% m/m, versus expectations of a +0.2% m/m increase.

German Sep industrial production rose +1.3% m/m, weaker than expectations of +3.0% m/m.

ECB Vice President Guindos said, "The European economy is showing a little bit of resilience, and growth is better than many projected only a couple of quarters ago."  He also said that the news on inflation is positive, with gains in service prices "behaving" much better.

As expected, the BOE kept its official bank rate unchanged at 4.00%. BOE Governor Bailey said, "We still think rates are on a gradual path downwards, but we need to be sure that inflation is on track to return to our 2% target before we cut them again."

Swaps are discounting a 4% chance for a -25 bp rate cut by the ECB at its next policy meeting on December 18.

US Stock Movers

Elf Beauty (ELF) is down more than -29% after forecasting 2026 adjusted EPS of $2.80 to $2.85, well below the consensus of $3.53. 

Duolingo (DUOL) is down more than -26% after forecasting Q4 bookings of $329.5 million to $335.5 million, well below the consensus of $344.1 million. 

DoorDash (DASH) is down more than -15% to lead losers in the S&P 500 and Nasdaq 100 after forecasting Q4 adjusted Ebitda of $710 million to $810 million, the midpoint weaker than the consensus of $802.7 million. 

CarMax (KMX) is down more than -13% after reporting Q3 preliminary EPS of 18 cents to 26 cents, well below the consensus of 69 cents, and terminating CEO Nash, effective December 1. 

Paycom Software (PAYC) is down more than -11% after reporting Q3 adjusted EPS of $1.94, below the consensus of $1.96.

Fortinet (FTNT) is down more than -7% after forecasting full-year service revenue of $4.58 billion to $4.60 billion, weaker than the consensus of $4.61 billion.

Becton Dickinson & Co. (BDX) is down more than -2% after forecasting 2026 adjusted EPS of $14.75 to $15.05, the midpoint below the consensus of $14.92. 

Datadog (DDOG) is up more than +20% to lead gainers in the S&P 500 and Nasdaq 100 after raising its full-year adjusted EPS forecast to $2.00-$2.02 from a previous estimate of $1.80-$1.83, above the consensus of $1.84.

Coherent (COHR) is up more than +16% after reporting Q1 revenue of $1.58 billion, stronger than the consensus of $1.54 billion, and forecasting Q2 revenue of $156 billion to $1.70 billion, the midpoint above the consensus of $1.56 billion. 

Air Products and Chemicals (APD) is up more than +9% after forecasting 2026 adjusted EPS of $12.85 to $13.15, the midpoint above the consensus of $12.89. 

Lyft Inc (LYFT) is up more than +8% after reporting Q3 gross bookings of $4.78 billion, above the consensus of $4.76 billion, and forecasting Q4 gross bookings of $5.01 billion-$5.13 billion, better than the consensus of $5.01 billion. 

Cummins (CMI) is up more than +6% after reporting Q3 net sales of $8.32 billion, stronger than the consensus of $8.00 billion.

Rockwell Automation (ROK) is up more than +5% after reporting Q4 sales of $2.32 billion, stronger than the consensus of $2.20 billion. 

Marvell Technology (MRVL) is up more than +4% on a report that said SoftBank Group explored a potential takeover of the company earlier this year. 

AppLovin (APP) is up more than +3% after reporting Q3 revenue of $1.41 billion, better than the consensus of $1.34 billion, and forecasting Q4 revenue of $1.57 billion to $1.60 billion, stronger than the consensus of $1.54 billion.

Earnings Reports(11/6/2025)

Air Products and Chemicals Inc (APD), Airbnb Inc (ABNB), Akamai Technologies Inc (AKAM), Alliant Energy Corp (LNT), AstraZeneca PLC (AZN), Becton Dickinson & Co (BDX), Block Inc (XYZ), Camden Property Trust (CPT), ConocoPhillips (COP), Consolidated Edison Inc (ED), Cummins Inc (CMI), Datadog Inc (DDOG), DuPont de Nemours Inc (DD), EOG Resources Inc (EOG), EPAM Systems Inc (EPAM), Evergy Inc (EVRG), Expedia Group Inc (EXPE), Gen Digital Inc (GEN), Insulet Corp (PODD), Mettler-Toledo International I (MTD), Microchip Technology Inc (MCHP), Moderna Inc (MRNA), Monster Beverage Corp (MNST), News Corp (NWSA), NRG Energy Inc (NRG), Parker-Hannifin Corp (PH), Ralph Lauren Corp (RL), Rockwell Automation Inc (ROK), Solstice Advanced Materials In (SOLS), Solventum Corp (SOLV), Take-Two Interactive Software (TTWO), Tapestry Inc (TPR), Trade Desk Inc/The (TTD), Viatris Inc (VTRS), Vistra Corp (VST), Warner Bros Discovery Inc (WBD), Wynn Resorts Ltd (WYNN).

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