U.S. stock indices ended Tuesday with no clear direction. The S&P 500 slipped slightly, the Dow Jones underperformed, while the Nasdaq 100 managed to close modestly higher on the back of select tech and crypto-related names. Futures on the S&P and Nasdaq also showed a mild decline and uptick, respectively, underscoring the lack of a single dominant narrative on the eve of the key event of the week — the Fed meeting.
Investors locked in some profits after a strong start to the day, once it became clear that the latest labor market data did not justify a faster pace of rate cuts. As a result, the session unfolded under a banner of caution: few are willing to take aggressive positions just one day before the policy decision and Jerome Powell’s press conference.
Strong Labor Market and Higher Yields
The main driver of the day was the October JOLTS report on job openings. The number of vacancies unexpectedly rose to a five-month high, beating analyst expectations. For the Fed, this is a signal that the labor market remains resilient, which means the central bank has less reason to rush with an aggressive easing cycle.
Against this backdrop, the 10-year Treasury yield climbed toward 4.18%. Additional pressure on the bond market came from a large 10-year auction, although demand ultimately proved solid. The combination of strong employment data and rising government bond supply traditionally cools risk appetite and caps upside in equities.
Focus on the Fed and This Week’s Macro Data
The market is almost unanimously pricing in another 25 bp cut in the Fed funds rate, to a 3.50–3.75% range. However, the intrigue lies not in the decision itself, but in the accompanying materials. Investors will be watching the updated economic projections, the dot plot, and any hints from Powell about how much further easing the market can realistically expect in 2026.
Attention will also center on the Q3 Employment Cost Index, expected to rise by about 0.9%, and the weekly initial jobless claims data. Any indication of either overheating or cooling in the labor market could shift expectations for the rate path and trigger sharp moves in both stocks and bonds.
Best Earnings Season Since 2021
The U.S. earnings season is effectively over, with almost all companies in the S&P 500 having reported. According to Bloomberg Intelligence, roughly four-fifths of companies beat profit forecasts, and overall earnings for the third quarter rose about 14–15% year-on-year — more than double initial expectations.
This strong fundamental backdrop helps explain why the market remains close to recent highs despite volatility in yields and uncertainty about the Fed’s longer-term policy trajectory. At the same time, investors are increasingly shifting focus from the broader picture to individual stories at the sector and single-name level.
Overseas Markets and Global Bonds
European and Asian equity markets also showed mixed performance. The main eurozone index pulled back from local highs, China closed lower, while Japan ended the day with a modest gain. In fixed income, European benchmarks — German Bunds and UK Gilts — saw a slight decline in yields, reacting to weaker-than-expected German trade data.
ECB rate futures barely moved, with the probability of a rate cut as soon as the December meeting remaining minimal. Unlike the Fed, the European central bank is maintaining a wait-and-see stance, closely monitoring inflation dynamics and industrial activity.
Sectors and Single Names: From Homebuilders to Crypto Plays
At the single-stock level, it was a busy day. Homebuilders were among the laggards, led by Toll Brothers, which issued a soft outlook for 2026 deliveries. That put pressure on other major players in the housing construction segment. In consumer names, weaker-than-expected results from AutoZone and several retailers triggered a notable pullback in their shares.
On the other side, crypto-sensitive companies rallied alongside bitcoin’s advance. Exchange and mining stocks posted solid gains, while Galaxy Digital received an extra boost from a fresh positive analyst rating and a high target price. In commodities, silver and gold miners benefited as silver prices hit multi-year highs, lifting the entire space.
In financials, JPMorgan stood out on the downside after management flagged higher-than-expected expenses for next year. In contrast, Ares Management shares rose on expectations of inclusion in the S&P 500, and several mid-cap banks were supported by management comments emphasizing that their stocks remain undervalued given current capital levels.
Among more defensive and infrastructure-oriented names, CVS Health, a number of industrial and infrastructure plays, and Exxon Mobil performed well. Exxon updated its long-term targets for cash flow growth into 2030. Select industrial equipment and elevator companies also gained support from broker upgrades and higher target prices.
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Twitter: @BigStakeTrades
Twitter: @BigStakeTrades