The S&P 500 Index SPY closed down -0.40% on Friday, the Dow Jones Industrial Average DIA closed up +0.10%, and the Nasdaq 100 Index QQQ closed down -1.22%. December E-mini S&P futures (ESZ26) fell -0.46%, and December E-mini Nasdaq futures (NQZ26) fell -1.25%.
US stock indices settled mostly lower on Friday as another selloff in chipmakers and AI-infrastructure stocks weighed on the broader market. Also, hawkish Fed comments on Friday lifted bond yields, weighing on stocks and increasing the chances of further Fed tightening. The 10-year T-note yield rose to a 4-week high of 5.17% on Friday.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.Stocks found some support Friday after US Oct producer prices rose less than expected, easing inflation concerns. However, despite the weaker-than-expected rise, Oct PPI rose +6.5% y/y, the fastest pace of increase in nearly 4 years.
US Oct PPI final demand rose +0.3% m/m and +6.5% y/y, weaker than expectations of +0.4% m/m and +6.6% y/y. Oct PPI ex-food and energy rose +0.3% m/m and +5.0% y/y, right on expectations.
Chicago Fed President Austan Goolsbee said the Fed "has work to do" on inflation, as the AI build-out is heating up the economy on top of energy costs.
Boston Fed President Susan Collins said that "soon, some additional tightening of Fed monetary policy may be appropriate," as price pressures are broadening.
San Francisco Fed President Mary Daly said the key problem in the US economy is inflation and "We're going to need to, in all likelihood, raise interest rates."
Bitcoin D posted modest losses on Friday after the International Energy Agency (IEA) cut its 2026 global crude oil demand forecast to 102.29 million bpd, down -90,000 bpd from last month's forecast. The IEA also said global oil markets will swing to a surplus for the first time since the start of the Iran war, boosting 2026 global oil supply estimates by 920,000 bpd, and said global oil markets will be in surplus by 2 million bpd this quarter.
Crude oil losses were limited on Friday on concerns over escalation of the US-Iran conflict after US Central Command said it shot down two attack drones launched by Iran’s IRGC toward a US base in Bahrain. Supply threats to crude oil remain due to flare-ups in the Middle East, with continued attacks on commercial shipping and disruption to the region's energy infrastructure. According to consultant Verisk Maplecroft, there were 36 confirmed attacks on commercial ships in the Persian Gulf, the Strait of Hormuz, and the Gulf of Oman in October, the highest total since the Iran war began.
Stocks are supported by the prospect of solid quarterly earnings. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +31% from a year earlier, up from a July estimate of 22%. As of Friday, 453 of the S&P 500 companies have reported results, with 84% beating estimates.
Overseas stock markets settled mixed on Friday. The Euro Stoxx 50 closed down -0.19%. China’s Shanghai Composite closed down -0.59%. Japan's Nikkei-225 Stock Average rose to a 1-week high and closed up +0.53%.
December 10-year T-notes (ZNZ6) closed down -8.5 ticks on Friday. The 10-year T-note yield rose +2.4 bp to 5.151%. Dec T-notes slid to a 3-week low on Friday, and the 10-year T-note yield climbed to a 4-week high of 5.172%. T-notes were under pressure Friday from hawkish Fed comments after Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins, and San Francisco Fed President Mary Daly expressed their support for additional Fed tightening. Also, higher inflation expectations weighed on T-notes after the 10-year breakeven inflation rate rose to a 1-week high of 2.270% on Friday.
T-notes found limited support on Friday after US Oct PPI rose less than expected, easing inflation fears. Also, Friday’s stock market decline boosted some safe-haven demand for T-notes.
The markets are now pricing in a 100% chance of a +25 bp rate hike at the FOMC’s next meeting on December 8-9.
European government bond yields moved higher on Friday. The 10-year German bund yield climbed to a 3-week high of 3.390% and finished up +3.0 bp to 3.377%. The 10-year UK gilt yield rose to a 2-week high of 5.349% and finished up +3.6 bp to 5.335%.
Eurozone Q3 GDP was left unrevised at +0.4% q/q and +1.3% y/y, as expected.
The markets are now pricing in a 92% chance of a +25 bp rate hike at the ECB’s next policy meeting on December 17.
Chipmakers and AI-infrastructure stocks retreated on Friday after the 10-year T-note yield rose to a 4-week high. The iShares Semiconductor ETF SOXX closed down more than -3%. Advanced Micro Devices AMD closed down more than -8% to lead losers in the S&P 500, and Sandisk SNDK closed down more than -5%. Also, Marvell Technology MRVL, ARM Holdings Plc ARM and Western Digital WDC closed down more than -4%, and Lam Research LRCX, KLA Corp KLAC, and Seagate Technology Holdings Plc STX closed down more than -3%. In addition, Analog Devices ADI, Applied Materials AMAT, Intel INTC, Qualcomm QCOM, Micron Technology MU, and Texas Instruments TXN closed down more than -2%.
AI cloud-computing stocks slumped on Friday. Nebius Group NV NBIS closed down more than -9% to lead losers in the Nasdaq 100, and CoreWeave CRWV and Applied Digital APLD closed down more than -6%. Also, Lumentum Holdings LITE and Arista Networks ANET closed down more than -4%, and Oracle ORCL closed down more than -1%.
Cryptocurrency-exposed stocks tumbled on Friday after Bitcoin IREN closed down more than -7%, and Galaxy Digital Holdings GLXY closed down more than -5%. Also, Robinhood Markets HOOD and BitMine Immersion Technologies BMNR closed down more than -4%, and Bullish BLSH closed down more than -3%. In addition, MARA Holdings MARA, Strategy MSTR, Coinbase Global COIN, and Circle Internet Group CRCL closed down more than -2%, and Riot Platforms RIOT closed down more than -1%.
Defensive food producers rose on Friday amid the broader market's decline. Archer Daniels Midland ADM, General Mills GIS, and Kraft Heinz Co KHC closed up more than +2%, and McCormick & Co MKC, Hormel Foods HRL, and Mondelez International MDLZ closed up more than +1%. Also, JM Smucker SJM closed up +0.74%, and Hershey Co HSY closed up +0.57%.
Cisco Systems CSCO closed down more than -6% to lead losers in the Dow Jones Industrials after reporting a +21% increase in product orders in fiscal Q1, below expectations and a slowdown from the previous quarter.
National Health Investors NHI closed down more than -2% after Bank of America Global Research double-downgraded the stock to underperform from buy.
Floor & Decor Holdings FND closed down more than -2% after Evercore ISI downgraded the stock to underperform from inline with a price target of $45.
Modine Manufacturing MOD closed up more than +27% on reports that Samsung Electronics is in talks to acquire the company.
Cerebras Systems CBRS closed up more than +11% after forecasting full-year core revenue of $940 million to $960 million, well above the consensus of $887.4 million.
Nubank Holdings Ltd. NU closed up more than +11% after reporting Q3 net income of $1.09 billion, better than the consensus of $1.07 billion.
Steris Plc STE closed up more than +4% after Jefferies upgraded the stock to buy from hold with a price target of $302.
AECOM (ACM), Aramark (ARMK), Powell Industries Inc (POWL), Tyson Foods Inc (TSN), XP Inc (XP).
On the date of publication, Rich Asplund did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.For more information please view the Barchart Disclosure Policy here.
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