The S&P 500 Index ($SPX) (SPY) today is up by +0.63%, the Dow Jones Industrials Index ($DOWI) (DIA) is up by +0.52%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up by +1.08%.  March E-mini S&P futures (ESH26) are up +0.61%, and March E-mini Nasdaq futures (NQH26) are up +1.09%.

Stock indexes are moving higher today as a rally in cloud infrastructure stocks improves market sentiment and lifts the broader market. Oracle is up by more than 7% after TikTok CEO Chew said his company has signed binding agreements to create a US joint venture owned by American investors, including Oracle.  Also, strength in chipmakers today supports the broader market.

Higher bond yields are limiting gains in stocks today, as the 10-year T-note yield is up +3 bp to 4.15%.  Global bond yields are climbing today, led by a surge in the 10-year Japanese government bond yield to a 26-year high of 2.025% after the BOJ raised interest rates and said it will keep raising rates if its economic and price outlook is realized.

Upbeat comments today from New York Fed President John Williams were supportive for stocks but negative for bonds, as he said some data we're seeing is "pretty encouraging" and he sees no sign of sharp deterioration in the jobs data.  He added that he sees US GDP growth of 1.5% to 1.75% this year, with growth picking up next year, and that there's "no urgency to need to act further on monetary policy right now, because I think the cuts we've made have positioned us really well."

Stock market moves may be exaggerated and more volatile than usual today due to the expiration of options, futures, and derivatives during the quarterly event known as triple witching.  According to Citigroup, a record $7.1 trillion of notional open interest will roll off the US options market today. 

This week's market focus will be on US economic news.  Later today, Nov existing home sales are expected to be up +1.2% m/m to 4.15 million.  Also, the University of Michigan Dec consumer sentiment index is expected to be revised upward by +0.2 to 53.5 from the previously reported 53.3.

The markets are discounting a 20% chance that the FOMC will cut the fed funds target range by 25 bp at the next FOMC meeting on January 27-28.

Overseas stock markets are higher today.  The Euro Stoxx 50 is up +0.04%.  China’s Shanghai Composite climbed to a 1-week high and closed up +0.36%.  Japan’s Nikkei Stock 225 closed up +1.03%.

Interest Rates

March 10-year T-notes (ZNH6) today are down by -7 ticks.  The 10-year T-note yield is up +2.7 bp to 4.149%.  Today's strength in stocks has reduced safe-haven demand for government debt securities and is weighing on T-notes.  Also, hawkish comments from New York Fed President John Williams are undercutting T-note prices after he said some of the data we're seeing is "pretty encouraging" and that he sees no sign of sharp deterioration in the jobs data.  In addition, T-notes have a negative carryover from today’s jump in the 10-year Japan government bond yield to a 26-year high of 2.025%.   

The steepening yield curve is also bearish for T-note prices. Steepening trades occur when bond investors buy short-term government debt and sell long-term debt.  The yield curve has steepened since last Wednesday’s FOMC meeting, when the Fed said it would begin purchasing up to $40 billion of short-term T-bills a month to boost liquidity in the financial system. Longer-term Treasury securities are also under pressure from concerns about inflation and the Fed’s independence. 

European government bond yields are moving higher today.  The 10-year German bund yield is up +3.4 bp to 2.884%. The 10-year UK gilt yield is up +3.8 bp to 4.518%.

German Nov PPI fell -2.3% y/y, weaker than expectations of -2.2% y/y and the steepest pace of decline in 20 months.

The German Jan GfK consumer confidence index unexpectedly fell -3.5 to a 1.75-year low of -26.9, weaker than expectations of an increase to -23.0.

UK Nov retail sales ex-auto fuel unexpectedly fell -0.2% m/m, weaker than expectations of an increase of +0.1% m/m.

Swaps are discounting a 1% chance for a -25 bp rate cut by the ECB at its next policy meeting on February 5.

US Stock Movers

Cloud infrastructure stocks are rallying today as they recover from a recent sell-off on financing concerns in the AI supply chain.  CoreWeave (CRWV) is up +8%, and Oracle (ORCL) is up more than +7% to lead gainers in the S&P 500.  Also, Applied Digital (APLD) is up more than +4%, and Nebius Group NV (NBIS) is up more than +3%.

Chip stocks are moving higher today, a supportive factor for the overall market.  Micron Technology (MU) is up more than +6% to lead gainers in the Nasdaq 100.  Also, Lam Research (LRCX) is up more than +3%, and Nvidia (NVDA) is up more than +2% to lead gainers in the Dow Jones Industrials.  In addition, Advanced Micro Devices (AMD), Applied Materials (AMAT), KLA Corp (KLAC), NXP Semiconductors NV (NXPI), and Intel (INTC) are up more than +2%.  Finally, GlobalFoundries (GFS), Broadcom (AVGO), and Marvell Technology (MRVL) are up more than +1%. 

Cryptocurrency-exposed stocks are climbing today, with Bitcoin (^BTCUSD) up more than +2%.  Galaxy Digital Holdings (GLXY) and Riot Platforms (RIOT) are up more than +4%.  Also, Strategy (MSTR) and Mara Holdings (MARA) are up more than +2%, and Coinbase Global (COIN) is up more than +1%.

Whitefiber Inc (WYFI) is up more than +16% following the announcement of a 10-year 40 megawatt co-location agreement between its subsidiary Enovum Data Centers Corp. and Nscale Global Holdings, representing around $865 million in contracted revenue. 

Echostar Corp (SATS) is up more than +4% after Deutsche Bank raised its price target on the stock to $131 from $97.

Generac Holdings (GNRC) is up more than +2% after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $195.

Stryker Corp (SYK) is up more than +1% after Citizens JMP Securities LLC upgraded the stock to outperform from market perform with a price target of $440. 

Cummins Inc (CMI) is up more than +1% after Barclays upgraded the stock to overweight from equal weight with a price target of $546. 

Lamb Weston Holdings (LW) is down more than -19% to lead losers in the S&P 500 after forecasting full-year net sales of $6.35 billion to $6.55 billion, the midpoint below the consensus of $6.52 billion. 

Nike (NKE) is down more than -9% to lead losers in the Dow Jones Industrials after forecasting Q3 revenue down in the low single digits and gross margins down about 175 to 225 basis points, amid persistent weakness in China. 

KB Home (KBH) is down more than -7% after reporting Q4 EPS of $1.55, weaker than the consensus of $1.79, and forecasting 2026 housing revenue of $5.10 billion to $6.10 billion, the midpoint below the consensus of $5.83 billion. 

Lyft Inc (LYFT) is down more than -4% after Wedbush Securities downgraded the stock to underperform from neutral with a price target of $16. 

KBR Inc (KBR) is down more than -4% after Truist Securities cut its price target on the stock to $50 from $62. 

Paychex (PAYX) is down more than -3% to lead losers in the Nasdaq 100 after BMO Capital Markets said the company’s Q2 earnings signaled an “okay quarter,” but management-solutions growth was softer.

FedEx (FDX) is down more than -2% after Morgan Stanley downgraded the stock to underweight from neutral with a price target of $210.

Elevance Health (ELV) is down more than -1% after Deutsche Bank downgraded the stock to hold from buy, citing a challenging macro environment.

Earnings Reports(12/19/2025)

Carnival Corp (CCL), Conagra Brands Inc (CAG), Lamb Weston Holdings Inc (LW), Paychex Inc (PAYX).

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