The S&P 500 Index ($SPX) (SPY) on Tuesday closed down by -0.24%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down by -0.62%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +0.26%. December E-mini S&P futures (ESZ25) fell -0.25%, and December E-mini Nasdaq futures (NQZ25) rose +0.25%.
Inventory indexes settled combined on Tuesday, with the S&P 500 falling to a 3-week low. The broader market was underneath strain on Tuesday as US monetary studies pointed to a sluggish financial system. The Nov unemployment price rose to a 4-year excessive, Oct retail gross sales stagnated, and US manufacturing exercise slowed to a 5-month low. Additionally, a droop in vitality producers on Tuesday weighed on the broader market after WTI crude oil fell greater than -2% to a 4.75-year low. Nevertheless, energy within the Magnificent Seven expertise shares on Tuesday was constructive for the general market, lifting the Nasdaq 100 from a 3-week low into constructive territory.
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Shares additionally discovered some assist from Tuesday’s Fed-friendly US financial studies on Nov payrolls and Oct retail gross sales, which bolster expectations that the Fed will proceed to ease financial coverage. Additionally, wage pressures are easing as Nov hourly earnings posted their smallest year-on-year enhance in 4.5 years. The ten-year T-note yield fell -2 bp to 4.15%.Â
US Nov nonfarm payrolls rose by +64,000, stronger than expectations of +50,000. Oct nonfarm payrolls fell by -105,000, weaker than expectations of -25,000. The Nov unemployment price rose +0.1 to a 4-year excessive of 4.6%.Â
US Nov common hourly earnings rose +0.1% m/m and +3.5% y/y, weaker than expectations of +0.3% m/m and +3.6% y/y, with the +3.5% y/y achieve the smallest year-on-year enhance in 4.5 years.
US Oct retail gross sales have been unchanged m/m, weaker than expectations of +0.1% m/m. Nevertheless, Oct retail gross sales ex-autos rose +0.4% m/m, stronger than expectations of +0.2% m/m.
The US Dec S&P manufacturing PMI fell -0.4 to a 5-month low of 51.8, weaker than expectations of 52.1.
Feedback on Tuesday from Atlanta Fed President Raphael Bostic have been hawkish and unfavourable for shares when he mentioned, “After wrestling with all of the concerns, in the present day I proceed to view value stability because the clearer and extra urgent threat regardless of shifts within the labor market.” He added that “he sees little to counsel that value pressures will dissipate earlier than mid to late 2026, on the earliest, and expects inflation to stay above 2.5% even on the finish of 2026.”
This week’s market focus can be on US financial information. On Thursday, weekly preliminary unemployment claims are anticipated to fall -11,000 to 225,000. Additionally, Nov CPI is predicted to be +3.1% y/y, and Nov core CPI is predicted to be +3.0% y/y. On Friday, Nov current house gross sales are anticipated to be up +1.2% m/m to 4.15 million. Additionally, the College of Michigan Dec shopper sentiment index is predicted to be revised upward by +0.2 to 53.5 from the beforehand reported 53.3.
The markets are discounting a 24% likelihood that the FOMC will lower the fed funds goal vary by 25 bp on the subsequent FOMC assembly on January 27-28.
Abroad inventory markets settled decrease on Wednesday. The Euro Stoxx 50 closed down -0.60%.  China’s Shanghai Composite fell to a 2-month low and closed down -1.11%.  Japan’s Nikkei Inventory 225 slid to a 2-week low and closed down -1.56%.
Curiosity Charges
March 10-year T-notes (ZNH6) on Tuesday closed up by +7.5 ticks.  The ten-year T-note yield fell -2.7 bp to 4.145%. T-notes moved increased on Tuesday after the US Nov employment price rose to a 4-year excessive and Nov common hourly earnings posted their smallest year-on-year enhance in 4.5 years. Additionally, Oct retail gross sales rose lower than anticipated, and the Dec S&P manufacturing PMI fell to a 5-month low, that are dovish components for Fed coverage. As well as, falling inflation expectations have been supportive of T-notes because the 10-year breakeven inflation price fell to a 2-week low on Tuesday at 2.231%.
Positive factors in T-notes have been restricted on Tuesday after a report on US Oct retail gross sales ex-autos rose greater than anticipated, a hawkish issue for Fed coverage. Additionally, hawkish feedback from Atlanta Fed President Raphael Bostic have been bearish for T-notes when he mentioned elevated value pressures are anticipated to persist by most of subsequent 12 months.
The steepening yield curve is bearish for T-note costs. Steepening trades happen when bond traders purchase short-term authorities debt and promote lengthy -term debt. The yield curve has steepened since final Wednesday’s FOMC assembly, when the Fed mentioned it could start buying as much as $40 billion of short-term T-bills a month to spice up liquidity within the monetary system. Longer-term Treasury securities are additionally underneath strain from issues about inflation and the Fed’s independence.Â
European authorities bond yields are combined in the present day. The ten-year German bund yield fell -0.8 bp to 2.845%. The ten-year UK gilt yield rose to a 3-week excessive of 4.561% and completed up +2.3 bp to 4.518%.
The Eurozone Dec S&P manufacturing PMI unexpectedly fell -0.4 to 49.2, weaker than expectations of a rise to 49.9 and the steepest tempo of contraction in 8 months.
The German Dec ZEW survey expectations of financial development unexpectedly rose by +7.3 to a 5-month excessive of 45.8, stronger than expectations of a decline to 38.4.
The UK Dec S&P manufacturing PMI rose +1.0 to 51.2, stronger than expectations of fifty.3 and the quickest tempo of enlargement in 15 months.
Swaps are discounting a 0% likelihood for a -25 bp price lower by the ECB at its subsequent coverage assembly on Thursday.
US Inventory Movers
Power producers and vitality service suppliers bought off on Tuesday and weighed on the broader market, after WTI crude oil fell greater than 3% to a 4.75-year low.  Phillips 66 (PSX) closed down greater than -6% to guide losers within the S&P 500, and Baker Hughes (BKR) closed down greater than -3% to guide losers within the Nasdaq 100. Additionally, APA Corp (APA) closed down greater than -5%, and Marathon Petroleum (MPC) and Halliburton (HAL) closed down greater than -4%. As well as, Occidental Petroleum (OXY), ConocoPhillips (COP), Diamondback Power (FANG), and Valero Power (VLO) closed down greater than -3%. Lastly, Devon Power (DVN), Exxon Mobil (XOM), and Chevron (CVX) closed down greater than -2%.Â
The energy of the Magnificent Seven expertise shares on Tuesday was a supportive issue for the general market. Tesla (TSLA) closed up greater than +3%, and Meta Platforms (META) closed up greater than +1%. Additionally, Nvidia (NVDA) closed up +0.81%, Microsoft (MSFT) closed up +0.33%, Apple (AAPL) closed up +0.18%, and Amazon.com (AMZN) closed up +0.01%. Bucking the pattern, Alphabet (GOOGL) closed down -0.54%.
Booz Allen Hamilton Holding Corp (BAH) closed down greater than -7% after it introduced that CFO Calderone will resign from the corporate efficient February 1.
Humana (HUM) closed down greater than -6% after forecasting full-year adjusted EPS of $17.000, under the consensus of $17.06.
Pfizer Inc (PFE) closed down greater than -3% after forecasting 2026 income of $59.5 billion to $62.5 billion, the midpoint under the consensus of $61.63 billion.
Illinois Software Works (ITW) closed down greater than -3% after Goldman Sachs downgraded the inventory to promote from impartial with a value goal of $230.
Archer-Daniels-Midland (ADM) closed down greater than -3% after Morgan Stanley downgraded the inventory to underweight from equal weight with a value goal of $50.
Comcast (CMCSA) closed up greater than +5% to guide gainers within the S&P 500 and Nasdaq 100 after CNBC commented about buying and selling exercise within the swaps market that will counsel involvement by activist traders.
Cognex (CGNX) closed up greater than +5% after Goldman Sachs double-upgraded the inventory to purchase from promote with a value goal of $50.Â
Estee Lauder (EL) closed up greater than +3% after Financial institution of America named the inventory as its prime decide for magnificence for 2026, with a value goal of $130.
Robinhood Markets (HOOD) closed up greater than +3% after Belief Securities initiated protection on the inventory with a purchase advice and a value goal of $155.Â
Okta Inc (OKTA) closed up greater than +2% after Jeffries upgraded the inventory to purchase from maintain with a value goal of $125.
Southwest Airways (LUV) closed up greater than +1% after Barclays upgraded the inventory to chubby from equal weight with a value goal of $56.
Earnings Experiences(12/17/2025)
Common Mills Inc (GIS), Jabil Inc (JBL), Micron Know-how Inc (MU), Toro Co/The (TTC).Â
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