The S&P 500 Index ($SPX) (SPY) on Friday closed up by +0.88%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up by +0.38%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +1.31%.  March E-mini S&P futures (ESH26) rose +0.87%, and March E-mini Nasdaq futures (NQH26) rose +1.28%.

Stock indexes settled higher on Friday as a rally in cloud infrastructure stocks improved market sentiment and lifted the broader market.  Oracle rose 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 on Friday helped lift the overall market.

Friday’s US economic news was mixed for stocks after Nov existing home sales rose to a 9-month high, but the University of Michigan US Dec consumer sentiment index was unexpectedly revised lower.

Seasonal factors are bullish for stocks.  According to data from Citadel Securities, since 1928, the S&P 500 has risen 75% of the time in the last two weeks of December, climbing 1.3% on average.

Higher bond yields limited gains in stocks on Friday, as the 10-year T-note yield rose +2 bp to 4.15%.  Global bond yields rose on Friday, 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.

US Nov existing home sales rose +0.5% m/m to a 9-month high of 4.13 million, though weaker than expectations of 4.15 million.

The University of Michigan US Dec consumer sentiment index was unexpectedly revised downward by -0.4 to 52.9, weaker than expectations of an upward revision to 53.5.

The University of Michigan US Dec 1-year inflation expectations were unexpectedly revised upward to 4.2% from the previously reported 4.1%.

Upbeat comments on Friday from New York Fed President John Williams were supportive for stocks but negative for bonds, as he said some of the data we're seeing is "pretty encouraging" and he sees no sign of a 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 have been exaggerated and more volatile than usual on Friday 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 on Friday. 

The markets are discounting a 22% 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 settled higher on Friday.  The Euro Stoxx 50 closed up +0.32%.  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) on Friday closed down by -8 ticks.  The 10-year T-note yield rose +2.7 bp to 4.149%.  Friday's stock rally reduced safe-haven demand for government debt securities and weighed on T-notes.  Also, hawkish comments from New York Fed President John Williams undercut T-note prices when 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 had a negative carryover from Friday’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 moved higher on Friday.  The 10-year German bund yield rose to a 9-month high of 2.899% and finished up +4.6 bp at 2.895%.  The 10-year UK gilt yield rose +4.3 bp to 4.524%.

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

ECB Governing Council member Pierre Wunsch said the ECB can leave interest rates untouched for some time if the predictions in its latest outlook on the economy and prices pan out.

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 0% chance for a -25 bp rate cut by the ECB at its next policy meeting on February 5.

US Stock Movers

Cloud infrastructure stocks rallied sharply on Friday, recovering from a recent sell-off driven by financing concerns in the AI supply chain.  CoreWeave (CRWV) closed up +23%, Applied Digital (APLD) closed up +16%, and Nebius Group NV (NBIS) closed up more than +15%.  Also, Oracle (ORCL) closed up more than +7%.

Chip stocks are moving higher today, a supportive factor for the overall market.  Micron Technology (MU) closed up +7% to lead gainers in the Nasdaq 100, and Advanced Micro Devices (AMD) closed up more than +6%.  Also, Lam Research (LRCX) closed up more than +4%, and Nvidia (NVDA) closed up more than +3% to lead gainers in the Dow Jones Industrials.  In addition, Broadcom (AVGO) closed up more than +3%, and KLA Corp (KLAC), NXP Semiconductors NV (NXPI), Intel (INTC), Microchip Technology (MCHP), Applied Materials (AMAT), ASML Holding NV (ASML), and GlobalFoundries (GFS) closed up more than +1%. 

Cryptocurrency-exposed stocks moved higher on Friday, as Bitcoin (^BTCUSD) rose more than +2%.  Riot Platforms (RIOT) closed up more than +8%, and Galaxy Digital Holdings (GLXY) closed up more than +6%.  Also, Mara Holdings (MARA) closed up more than +4%, and Strategy (MSTR) closed up more than +3%.  In addition, Coinbase Global (COIN) closed up more than +2%.

Whitefiber Inc (WYFI) closed up more than +18% 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. 

Carnival (CCL) closed up more than +9% to lead cruise stocks higher and gainers in the S&P 500 after reporting Q2 adjusted EPS of 34 cents, better than the consensus of 24 cents.  Also, Norwegian Cruise Line Holdings (NCLH) closed up more than +6%, and Royal Caribbean Cruises Ltd (RCL) closed up more than +2%.

FactSet Research Systems (FDS) closed up more than +5% after Huber Research Partners double-upgraded the stock to overweight from underweight with a price target of $326.

Amphenol (APH) closed up more than +4% after Truist Securities raised its price target on the stock to $180 from $147. 

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

Generac Holdings (GNRC) closed up more than +1% after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $195.

Lamb Weston Holdings (LW) closed down more than -25% 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) closed down more than -10% 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) closed down more than -8% to lead homebuilders lower 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.  Also, DR Horton (DHI) closed down more than -1%, and PulteGroup (PHM) closed down more than -1%.

KBR Inc (KBR) closed down more than -5% after Truist Securities cut its price target on the stock to $50 from $62. 

Conagra Brands (CAG) closed down more than -2% after reporting Q2 organic sales fell -3%, a steeper decline than expectations of -2.42%.

Lyft Inc (LYFT) closed down more than -2% after Wedbush Securities downgraded the stock to underperform from neutral with a price target of $16. 

Paychex (PAYX) closed down more than -1% after BMO Capital Markets said the company’s Q2 earnings signaled an “okay quarter,” but management-solutions growth was softer.

Earnings Reports(12/22/2025)

Barnes & Noble Education Inc (BNED) and Rezolve AI PLC (RZLV).