Stocks Settle Mixed as Fed Comments Suggest a Rate Cut Pause

The S&P 500 (SPX) (SPY) closed Friday down -0.05%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.65%, and the Nasdaq 100 ($IUXX) (QQQ) closed up +0.06%. December E-mini S&P futures (ESZ25) are down -0.02%, and December E-mini Nasdaq futures (NQZ25) are up +0.10%.

US stock indices recovered from early losses on Friday and settled in a mixed manner after shares of the technology company Magnificent Seven recovered from early losses and traded in a mixed manner. Also, the strength of energy producers was positive for the overall market, with WTI prices up more than +2%.

Stocks initially continued Thursday’s sell-off on Friday amid concerns about the Fed’s hawkish pivot. Doubts about a Fed rate cut next month have fueled concerns about stretched valuations for AI infrastructure and semiconductor stocks, and sparked prolonged liquidations in stocks and risk-off sentiment in asset markets.

Chances of a Fed rate cut at the December Federal Open Market Committee meeting fell to 43% on Friday from 70% last week, after a parade of Fed officials this week expressed doubts about the need for additional interest rate cuts, citing the economy’s resilience and continuing uncertainty about inflation.

The Fed’s hawkish comments on Friday also reinforced expectations that the Fed will refrain from cutting interest rates at next month’s Federal Open Market Committee meeting. “I don’t think further rate cuts will do much to patch up any cracks in the labor market but could have long-lasting effects on inflation as our adherence to our 2% target comes increasingly into question,” Kansas City Fed President Jeff Schmid said. “I think it will be difficult to support another rate cut unless we get convincing evidence that inflation is actually falling faster than I expect or that we are seeing more of the gradual slowdown that we have seen in the labor market,” Dallas Fed President Lori Logan said.

Weak economic news from China on Friday heightened concerns about global growth prospects and weighed on stocks. China’s industrial production for October rose 4.9% year-on-year, weaker than expectations of 5.5% year-on-year and the smallest increase in 14 months. Also, new home prices in China for October fell by -0.45% m/m, the largest decline in a year and the 29th consecutive month that new home prices have fallen.

Bitcoin (^BTCUSD) price fell more than -4% to a 6.25-month low as a 5-week sell-off continues. Bitcoin is down -24% from its record high last month amid prolonged liquidation pressures. Bitcoin ETFs saw net outflows of about $870 million on Thursday, the second-largest daily withdrawal since trading in Bitcoin ETFs began.

President Trump on Wednesday signed legislation that ended the longest U.S. government shutdown in history. The bill provides full-year funding for some departments, funds other agencies through Jan. 30, and includes paying furloughed government employees. The bill also resumes federal payments to states and localities and recalls agency employees who were laid off during the shutdown.

The Congressional Budget Office expected that a six-week government shutdown would reduce real GDP growth in the current quarter by 1.5 percentage points. However, more than half of the loss may be recovered early next year as federal programs resume and government employees receive back pay, according to the Congressional Budget Office.

The Bureau of Labor Statistics said on Friday that it will release the September jobs report on Thursday, November 20, and the September real earnings report on Friday, November 21. On Thursday, Economic Council Director Hassett said the October jobs report would be released without the unemployment rate. The Census Bureau and Bureau of Economic Analysis have not yet released updated dates for inflation-adjusted retail sales and consumer spending.

Markets are ruling out a 43% chance of another -25 basis point rate cut at the next FOMC meeting on December 9-10.

The third quarter corporate earnings season is coming to an end. According to Bloomberg Intelligence, 82% of S&P 500 companies beat expectations, on track to have their best quarter since 2021. Third-quarter earnings rose 14.6%, more than double expectations of 7.2% year over year.

Overseas stock markets settled lower on Friday. The Euro Stoxx 50 index closed -0.85% lower. China’s Shanghai Composite Index fell from a 10-year high and closed -0.97% lower. Japan’s Nikkei Stock 225 closed down -1.77%.

Interest rates

The 10-year Treasury note (ZNZ5) closed the day down -7.5 points. The yield on the 10-year Treasury note rose 2.7 basis points to 4.146%. Treasuries came under pressure on Friday, with the yield on the 10-year Treasury note rising to a one-week high of 4.150%. The Fed’s hawkish comments on Friday dented Treasury prices. Kansas City Fed President Jeff Schmid and Dallas Fed President Lori Logan argued against a Fed rate cut at the Federal Open Market Committee meeting in December.

T-bonds also have a negative carryover from Thursday, when several Fed chairs warned of further interest rate cuts amid inflation uncertainty, denting the chances of a rate cut at next month’s Federal Open Market Committee meeting to 43% on Friday from 70% last week.

European government bond yields rose on Friday. The German 10-year bond yield rose to a 5-week high of 2.720% and closed at that high level. The UK 10-year Treasury yield rose to a one-month high of 4.579% and ended +13.7 basis points higher at 4.574%.

Eurozone GDP for the third quarter was revised up by +0.1 to +1.4% y/y from the previous reading of +1.3% y/y.

The swap contracts exclude a 3% chance of a -25 basis point interest rate cut by the ECB at its next policy meeting on December 18.

US stock movers

Shares of technology company Magnificent Seven recovered from early losses and traded mixed, helping the broader market recover. Shares of Nvidia (NVDA) and Microsoft (MSFT) closed higher than 1%. Tesla (TSLA) stock closed up 0.59%. However, Amazon.com (AMZN) closed down more than -1%. Also, Alphabet (GOOGL) closed down -0.77%, Apple (AAPL) closed down -0.20%, and Meta Platforms (META) closed down -0.07%.

Energy producers and energy service providers rose on Friday as WTI rose more than +2%. Valero Energy (VLO) and Diamondback Energy (FANG) closed higher by more than 3%. Also, shares of Baker Hughes (BKR), ConocoPhillips (COP), Marathon Petroleum (MPC), Devon Energy (DVN), and Phillips 66 (PSX) closed more than 2% higher. Additionally, Halliburton (HAL), Occidental Petroleum (OXY), and Chevron (CVX) shares closed higher than 1%.

Most semiconductor stocks came under pressure on Friday, which affected the overall market. Lam Research (LRCX) shares closed down more than -3%, and ON Semiconductor (ON), KLA Corp (KLAC), Microchip Technology (MCHP), and NXP Semiconductors NV (NXPI) shares closed down more than -2%. Also, shares of Texas Instruments (TXN), ASML Holding NV (ASML), Marvell Technology (MRVL), Analog Devices (ADI), and Intel (INTC) closed down more than -1%.

Stubhub Holdings (STUB) closed down more than -20% after reporting a Q3 loss per share of -$4.27, greater than the consensus of -$2.49, and failing to provide a Q4 outlook.

Bristol-Myers Squibb (BMY) shares closed more than -4% lower after ending a trial of its experimental drug Melvexian to prevent strokes and blood clots following disappointing data.

Manitowoc (MTW) ​​closed down more than -3% after Wells Fargo Securities initiated coverage on the stock with an Underweight recommendation, with a price target of $9.

Cidara Therapeutics (CDTX) closed up more than 105% after Merck & Co. to acquire the company for approximately $9.2 billion, or $221.50 per share.

Avadel Pharmaceuticals (AVDL) closed higher by more than 22% after saying it received an unsolicited offer from H. Lundbeck A/S to acquire it for $23 per share.

DoorDash (DASH) closed up more than +6% to lead gainers in the S&P 500 and Nasdaq 100 after Needham & Co. said… The stock’s recent pullback represents a buying opportunity and it maintained its Buy rating with a price target of $275.

Warner Bros Discovery (WBD) closed higher by more than 4% after the Wall Street Journal reported that Paramount, Comcast and Netflix are preparing to bid for the company.

Nubank (NU) closed higher by more than +1% after reporting Q3 total revenue of $4.17 billion, better than the consensus of $3.92 billion.

Earnings Reports(11/17/2025)

Aramark (Armk), Helmerich & Payne Inc (HP), i3 Verticals Inc (IIV), j&j Snack Foods Corp (JJSF), James Hardie Industry PLC (JHX), Lifemd Inc (LFMD), XP Inc (XP).

On the date of publication, Rich Asplund had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. This article was originally published on parchart.com