US stocks moved higher on Friday as Wall Street digested a cooling in the Federal Reserve’s preferred inflation gauge, increasing the odds that the central bank will cut rates next week.
The S&P 500 (^GSPC) rose 0.3%, within striking distance of its first record close since October. The Nasdaq Composite (^IXIC) also gained about 0.3%, eyeing its ninth positive close in 10 sessions. The Dow Jones Industrial Average (^DJI) rose around 0.2%, following a mixed Thursday session for the gauges.
Investors continue to bet heavily on a quarter-point interest rate cut from the central bank next Wednesday. Traders are pricing in 87% odds of a move lower, compared with 62% a month ago, according to CME FedWatch.
On Friday, a delayed reading of the PCE price index showed inflation rose about as expected in September. The “core” PCE index — the Fed’s favored price gauge — cooled slightly, rising 2.8% on an annual basis. Meanwhile, US consumer confidence rose for the first time in five months as respondents’ inflation expectations improved.
The jobs market, meanwhile, has presented more of a mixed bag of data this week. A Challenger report on Thursday showed US companies cut 71,000 jobs last month, the worst November print since 2022. Yet new weekly jobless claims fell to their lowest since September 2022, reinforcing the picture of a labor market cooling gradually rather than rapidly.
Meanwhile, news landed that Netflix (NFLX) will buy Warner Bros. Discovery’s (WBD) studios and its streaming unit for $72 billion, following a weeks-long bidding war. Netflix stock ticked down, while WBD shares moved 2% higher.
In earnings, Hewlett Packard Enterprise (HPE) stock rose slightly after the server maker’s quarterly sales outlook missed high AI-fueled expectations.
LIVE 23 updates
-
S&P 500 hovers near record, while bitcoin has decoupled from stocks
S&P 500 (^GSPC) was a stone’s throw away from reaching a new high on Friday, while bitcoin (BTC-USD) tumbled below $90,000 per token.
The world’s largest cryptocurrency is on pace to close out the year decoupled from stocks for the first time since 2014.
Bitcoin is down roughly 3% year-to-date compared the the S&P 500’s 17% gain.
while it hovers about 30% off its all-time high, north of $126,000 in October.
-
Gold on pace for weekly win as ‘momentum’ drives historic 2025 rally
Gold was on pace to eke out a weekly win on Friday as investor bets on a Federal Reserve rate cut next week continued to rise.
Gold futures hovered around $4,240, on track for a less than 1% increase this week and more than $100 off its October record high.
Investors overwhelmingly expect the Federal Reserve to cut the fed funds rate by 25 basis points next week. The expectation has put pressure on the US dollar index (DX-Y.NYB), lifting commodity prices invoiced in greenback currency.
Read more here.
-
Trending tickers in afternoon trading: Netflix, Warner Bros. Discovery, Rubrik, Walmart
Here’s a look at some active stocks trending on Friday:
-
Tesla launches cheaper Standard EVs in Europe to blunt sales drop, Musk backlash
Tesla (TSLA) stock modestly fell on Friday after the EV maker launched the more affordable Standard versions of the Model 3 and Model Y in Europe, as sales in the region lag.
Yahoo Finance’s Pras Subramanian reports:
-
Bitcoin drops 4% to hover below $90,000
Bitcoin (BTC-USD) tumbled below $90,000 as the world’s largest cryptocurrency has failed to hold above $92,000, a key level traders have been watching.
The token is down more than 4% over the past 24 hours as it has struggled to meaningfully rebound from its October crash.
However, some Wall Street bulls still see hopes of a year-end rally as the Federal Reserve is expected to cut rates next week.
“Across price action, ETF flows, derivatives positioning, liquidity metrics, and cross-asset relationships, the data has continued to turn more constructive,” Fundstrat head of digital assets Sean Farrell said in a note on Thursday night.
“Taken together, these developments point to an environment that is increasingly supportive of a rally into year-end,” he added.
-
Nvidia stock dips as China business faces more hurdles
Nvidia (NVDA) shares fell nearly 1% Friday, lagging the Nasdaq Composite’s (^IXIC) 0.4% advance as its business in China came under further pressure from US lawmakers and competition abroad.
A Chinese competitor to Nvidia, Moore Threads, surged in its market debut on Friday. Nvidia noted in its latest earnings release that greater competition from Chinese firms and geopolitical turmoil prevented its once-thriving business in the country from seeing gains in the third quarter.
Meanwhile, US lawmakers on Thursday introduced a piece of legislation called the Secure and Feasible Exports (SAFE) Act that would bar Nvidia and its rivals from exporting AI chips to China for at least 30 months. The news came just a day after CEO Jensen Huang’s lobbying efforts reportedly helped the company secure a policy win as lawmakers scrapped a separate measure, the GAIN AI Act, that would have limited its ability to sell chips to China (per Bloomberg).
But the pressure is coming from China, too.
Even as the US reversed an effective export ban on Nvidia’s H20 chips (in exchange for a cut of its revenue) in August, Beijing has tightened restrictions on Chinese companies and barred them from buying the chips. Nvidia’s Huang has said he’s unsure whether the Chinese government would allow companies there to buy Nvidia’s more advanced AI chips if the US further relaxed restrictions.
-
Rate cut bets steady after PCE price index reading
Options traders were pricing in roughly 87% odds of the Federal Reserve cutting interest rates at its meeting next week following the release of the latest reading from the central bank’s preferred inflation gauge.
Those odds were unchanged from earlier in the morning but slightly below yesterday’s 88% chances seen for an easing, according to CME Group.
The PCE price index released Friday morning showed inflation holding steady in September. The release of the data for September had been delayed due to the government shutdown, clouding expectations for interest rate cuts.
But rate cut bets have jumped in the last several weeks ahead of the Fed’s December meeting. Traders were pricing in just 62% odds of a rate cut last month.
-
Consumer sentiment unexpectedly lifts to start December
US consumer sentiment improved in early December as inflation expectations eased.
The University of Michigan’s Index of Consumer Sentiment showed a reading of 53.3 on Friday, above the 52 expected by economists polled by Bloomberg and the 51 recorded in November.
Consumers surveyed by the university believe prices will rise in the short- and long- term slightly less than they previously thought.
Year-ahead inflation expectations dipped to 4.1% from 4.5% in November, while long term inflation expectations dropped to 3.2% in December from 3.4% last month. Economists tracked by Bloomberg had expected inflation expectations to remain unchanged this month.
The brightened outlook comes after consumer sentiment deteriorated in November as Americans worried over high prices, weaker incomes, and mounting layoffs.
But the mood is still somewhat grim.
“Consumers see modest improvements from November on a few dimensions, but the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices,” wrote UMichigan’s director of the surveys, Joanne Hsu.
-
PCE price index shows inflation steadying in September
The Personal Consumption Expenditures (PCE) price index showed inflation holding broadly steady in September.
The index, which is the Fed’s preferred inflation gauge, rose 0.3% in September from the prior month, unchanged from August’s increase and in line with expectations of economists tracked by Bloomberg.
The “core” PCE price index, which excludes volatile food and energy prices, rose 0.2%, also unchanged from the previous month and in line with projections.
Friday’s release from the Bureau of Economic Analysis was the first since Sept. 26, as the longest-ever government shutdown delayed the release of crucial federal economic data that factors into the Federal Reserve’s policy decisions.
On an annual basis, the headline and core PCE price indexes rose 2.8% in September from the previous year, in line with economists’ estimates, per Bloomberg data.
Meanwhile, personal income and personal spending rose.
Personal income climbed 0.4% in September from the prior month, above the 0.3% gain expected, but in line with the 0.4% uptick in August.
Personal spending also increased 0.3% from last month, tracking with projections, after climbing 0.6% in August.
-
The labor market is not going to give any straight answers anytime soon
Yahoo Finance’s Hamza Shaban reports:
Investors looking for a straight answer on the health of the labor market will have to keep waiting or once again make sense of mixed signals.
That’s especially true as this December morning marks another first Friday of the month without government jobs data — the best labor market gauge we have.
In the meantime, investors and everyone else have to make do with next-best approximations. And by those measures, hints of calm coexist with warning signs as the labor market grinds through DOGE cuts, restructurings, and what the largest corporations see as the dawn of the AI era.
Claims for unemployment insurance dropped to a three-year low, according to a new report from the Labor Department released on Thursday, bolstering the idea that the labor market remains resilient despite a host of challenges.
But ’tis the season for statistical noise.
Initial claims are subject to big swings this time of year, noted Nancy Vanden Houten, lead economist at Oxford Economics, so observers don’t need to read too much into one week’s worth of numbers.
Read more here in the takeaway from today’s Morning Brief.
-
Stocks rise at the open
US stocks climbed at the market open on Friday as Wall Street awaited the release of September’s PCE price index at 10 a.m. ET. The reading on the Federal Reserve’s preferred inflation gauge is likely to factor into the central bank’s next policy move.
The S&P 500 (^GSPC) added 0.3%, while the Nasdaq Composite (^IXIC) rose 0.4%. The Dow Jones Industrial Average (^DJI) gained nearly 0.2%.
-
Treasurys head for worst week in 6 months as inflation data looms
Treasurys were on track for their worst week in six months, per Bloomberg, as investors waited for PCE inflation data and the University of Michigan’s latest read on consumer sentiment.
The US 10-year yield (^TNX) edged up to 4.12% on Friday, its highest level since June. The 30-year yield (^TYX) ticked higher to 4.78%, the highest since September.
Bloomberg reports:
-
Victoria’s Secret stock surges on turnaround progress, improved 2025 outlook
Victoria’s Secret (VSCO) stock climbed over 13% in premarket trading after the lingerie company raised its 2025 net sales, operating income, and earnings guidance, signaling progress in its revitalization efforts.
The company forecast full-year net sales in the range of $6.45 billion to $6.48 billion, compared to previous guidance of $6.33 billion to $6.41 billion. Its adjusted earnings per share for the year are expected to be in the range of $2.40 to $2.65, compared to prior guidance of $1.80 to $2.20.
Victoria’s Secret also said its estimated tariff impact will be about $90 million for the year, less than the $100 million initially expected.
Victoria’s Secret’s third quarter results were also better than expected, with revenue beating estimates and the company’s net loss coming in shallower than estimates.
Net sales increased 9% year over year to $1.472 billion, above estimates for $1.40 billion, according to S&P Global Market Intelligence. The retailer recorded a net loss of $0.46 per share, which was smaller than the $0.60 per share loss the Street was expecting.
-
Netflix wins bidding war to buy Warner Bros Discovery’s studios, streaming unit for $72 billion
Netflix (NFLX) announced Friday morning that it has agreed to buy Warner Bros. Discovery (WBD) streaming and studios unit for $72 billion, ending a weeks-long bidding war that saw the streaming giant outmaneuver Paramount Skydance (PSKY) and Comcast (CMCSA).
The cash-and-stock deal values Warner Bros. Discovery at $27.75 per share. Warner Bros. Discovery stock closed at $24.54 on Thursday, giving it a market cap of $60.8 billion, according to Yahoo Finance data.
Netflix shares fell 1.7% while Warner Bros. Discovery shares rose 3.5% before being halted for trading.
Reuters reports:
-
BofA’s Hartnett warns dovish Fed rate cut imperils a Santa Claus rally
Bloomberg reports:
The year-end rally in equities is at risk from a Federal Reserve outlook that’s too cautious on the economy, according to Bank of America Corp. strategists.
With the S&P 500 Index (^GSPC) within striking distance of a record high, investors are confident about a best-case scenario where the Fed cuts interest rates alongside falling inflation and economic growth remains resilient.
But that optimism stands to be tested if the central bank sends dovish signals at the meeting next week, according to BofA strategist Michael Hartnett, as they could suggest a bigger-than-expected economic slowdown.
“Only thing that can stop Santa Claus rally is dovish Fed cut causing a selloff in long-end,” Hartnett wrote in a note, referring to Treasuries with a longer maturity date.
-
Good morning. Here’s what’s happening today.
-
Premarket trending tickers: Victoria’s Secret’s, Cooper Companies and Ulta Beauty
Victoria’s Secret’s (VSCO) stock rose 3% during premarket trading on Friday. The US beauty retailer is due to release its earnings before the bell today, and over the past year, its stock has fallen 5%. This quarter, analysts are expecting revenue to grow 4.3% year on year to $1.41 billion, slowing from the 6.5% increase it recorded in the same quarter last year.
The Cooper Companies Inc. (COO) stock jumped 13% before the bell on Friday. The rise followed the company’s earnings report on Thursday, where they met Wall Street revenue expectations.
Ulta Beauty (ULTA) stock rose 5% during premarket trading after raising its sales outlook for the year and quarterly earnings beating Wall Street expectations.
-
BlackRock bitcoin ETF sheds $2.7 billion in record outflows run
Bloomberg reports:
BlackRock Inc.’s (BLK) iShares Bitcoin Trust (IBIT) recorded its longest streak of weekly withdrawals since debuting in January 2024, in a sign that institutional appetite for the world’s largest cryptocurrency remains subdued even as prices stabilize.
Investors yanked more than $2.7 billion from the exchange-traded fund over the five weeks to Nov. 28, according to data compiled by Bloomberg. With an additional $113 million of redemptions on Thursday, the ETF is now on pace for a sixth straight week of net outflows.
The IBIT fund oversees more than $71 billion in assets and has served as the flagship vehicle for traditional investors seeking exposure to bitcoin (BTC-USD).
The sustained period of outflows aligns with Bitcoin’s slide into a bear market following a severe liquidation event in early October, which kicked off a more than $1 trillion wipeout in crypto market value.
-
Warner Bros. begins exclusive deal talks with Netflix
Netflix has begun exclusive deal negotiations with Warner Bros. Discovery, Bloomberg reported, in the latest twist to a secretive bidding war for the entertainment giant’s assets.
The negotiations cover WBD’s film and TV studios, and its HBO Max streaming service, sources said.
On Thursday, Netflix submitted the highest offer so far for those assets — around $28 per share, according to CNN. It has now emerged as the frontrunner in a race to nail down a deal.
Shares of WBD slipped over 2% in premarket trading to $24 each, while Netflix stock edged down about 1%.
Bloomberg reports:
Netflix is offering a $5 billion breakup fee if regulators don’t approve the deal, said the people, who asked to not be identified because the discussions are private.
The two companies could announce a deal as soon as in the coming days, assuming talks don’t fall apart, the people said. The move suggests Netflix has pulled ahead of Paramount Skydance Corp. (PSKY) and Comcast Corp. (CMCSA), who were also competing for the asset.
Prior to the closing of the sale, Warner Bros. — valued at more than $60 billion overall — will complete the planned spinoff of cable channels including CNN, TBS and TNT.
-
Nvidia’s chips face new competition from Google, but it’s not about to lose its edge
Yahoo Finance’s Daniel Howley reports:
Nvidia (NVDA) is the global AI chip leader, but word that Google (GOOG, GOOGL) could sell some of its own AI chips to Meta (META) has raised concerns that one of its biggest clients is becoming a major competitive threat.
According to a Nov. 24 report by the Information, Google’s deal with Meta could be worth billions of dollars.
On Tuesday, Amazon (AMZN) announced the public availability of its Tranium3 chip, saying that it can save up to 50% on training costs for AI software compared to alternatives.
… One of the main things to understand about the Nvidia versus Google and Amazon debate is that they don’t exactly offer the same products. Google’s TPUs and Amazon’s Tranium3 are types of chips called ASICs, or application-specific integrated circuits, meaning they’re built to accomplish specific tasks very well.
That means Google and Amazon have developed them to handle certain applications efficiently because the chips were made specifically for those purposes.
“[Google knows] the requirements and they know what trade-offs are most efficient for them,” explained Forrester senior analyst Alvin Nguyen.
“They can make something that works better today for them. Now, it doesn’t mean that it’s superior to Nvidia in every aspect. But … at least for Google, it will be superior for their needs,” he added.
