Market Performance and Key Drivers
- Major US stock indices closed higher on Tuesday, with the S&P 500 and Nasdaq 100 reaching 2.5-week highs.
- Strong performance in chip stocks and better-than-expected technology earnings fueled market gains.
- Positive earnings surprises from MongoDB and Credo Technology Group, alongside Boeing’s cash flow outlook, boosted specific companies.
- Global economic forecasts were stable, with the OECD maintaining its 2025 GDP estimate but slightly increasing the US and Eurozone projections.
- Market attention is shifting to upcoming US economic data, including employment figures, inflation measures, and consumer sentiment.
S&P 500 and Nasdaq Reach New Highs on Tech Strength
Major US stock benchmarks extended their gains on Tuesday, with the S&P 500 and Nasdaq 100 indices achieving their highest closes in two and a half weeks. This upward momentum was significantly driven by robust performance in the semiconductor sector, which provided a strong tailwind for the broader market. Additionally, a wave of better-than-expected corporate earnings reports, particularly within the technology sphere, contributed to investor optimism.
Key individual company performances highlighted the day’s trends. MongoDB saw a substantial surge of over 22% after announcing third-quarter earnings per share that surpassed analyst expectations. Similarly, Credo Technology Group Holding experienced a more than 10% rise following the release of stronger-than-anticipated second-quarter revenue figures. Boeing also made significant strides, jumping over 10% after its CFO indicated expectations for reaching low-single-digit positive free cash flow in the upcoming year.
đź’ˇ Market Insight: Positive earnings surprises, like those from MongoDB and Credo Technology, often signal underlying business strength and can lead to sustained stock price appreciation, especially if accompanied by raised future guidance.
Global Economic Outlook Remains Stable
The Organization for Economic Co-operation and Development (OECD) recently updated its global economic outlook, keeping its forecast for global GDP in 2025 unchanged at 3.2%. However, the organization revised its projections for the US and the Eurozone upwards. The US 2025 GDP forecast was increased to 2.0% from a prior estimate of 1.8%, and the Eurozone’s 2025 GDP forecast was slightly adjusted to 1.3% from 1.2%.
The OECD attributed the global economy’s resilience, particularly in navigating trade tariffs, to strong investments in artificial intelligence and supportive fiscal and monetary policies worldwide. This stability provides a generally favorable backdrop for equity markets, although specific regional challenges and policy decisions continue to influence investor sentiment.
Fed Chair Succession and Market Speculation
In political news, President Trump announced his intention to select a new Federal Reserve Chair in early 2026, with reports suggesting National Economic Council Director Kevin Hassett as a potential candidate. This development has raised questions regarding the Fed’s independence, as Hassett is known to support policies aimed at lowering interest rates, an approach President Trump has publicly advocated for. Such potential influence could create uncertainty in the market.
Upcoming US Economic Data and Fed Rate Expectations
Market participants are closely monitoring incoming US economic data this week, which is expected to offer further clarity on the nation’s economic trajectory. Key releases include the November ADP employment change, September manufacturing production figures, and the November ISM services index. Later in the week, attention will turn to initial jobless claims, September personal spending and income data, and crucial inflation indicators like the core PCE price index.
Additionally, the University of Michigan’s December consumer sentiment index is forecasted. The market is strongly anticipating the Federal Reserve to enact another rate cut at its upcoming FOMC meeting on December 9-10, with current discounting indicating a 98% probability of a 25 basis point reduction.
đź“Ť Investor Focus: The core PCE price index, the Fed’s preferred inflation gauge, will be a critical data point. A reading that aligns with or exceeds expectations could influence future Fed decisions and market sentiment.
Strong Finish to Q3 Earnings Season
The third-quarter corporate earnings season is nearing its conclusion, with 475 out of the 500 S&P 500 companies having reported their results. The overall earnings performance has been notably strong, with 83% of reporting companies exceeding revenue and profit forecasts, marking the best quarter since 2021. On average, Q3 earnings have shown a significant year-over-year increase of 14.6%, substantially surpassing initial expectations of 7.2%.
International Markets Show Mixed Performance
Equity markets across the globe presented a mixed picture on Tuesday. In Europe, the Euro Stoxx 50 index reached a two-week high, closing up by 0.33%. However, Asian markets saw some declines, with China’s Shanghai Composite closing down 0.42%. Japan’s Nikkei Stock 225 remained flat, closing unchanged for the day.
Interest Rate Environment
US Treasury futures, specifically March 10-year T-notes, saw an uptick on Tuesday, closing up by 2 ticks. This movement resulted in a slight decrease in the 10-year T-note yield, which fell to 4.085%. The recovery in T-notes came after early losses, supported by falling crude oil prices which may temper inflation expectations. Increased anticipation of a Fed rate cut also contributed to the bond market’s positive performance.
European government bond yields also trended lower. The 10-year German bund yield decreased from a two-month high, settling at 2.749%, down by 0.2 basis points. Similarly, the 10-year UK gilt yield fell by 1.2 basis points to 4.469%.
Eurozone inflation data for November showed a year-over-year CPI increase of 2.2%, slightly above the expected 2.1%. The core CPI remained steady at 2.4% year-over-year. Swaps markets indicate a low probability of a rate cut by the European Central Bank (ECB) at its next policy meeting, with only a 2% chance priced in for a 25 basis point reduction.
đź“Š Analysis: The divergence in rate cut expectations between the US Federal Reserve and the European Central Bank, as reflected in market pricing, suggests differing economic pressures and policy responses in each region.
US Stock Movers: Semiconductors Lead Gains
The technology sector, particularly semiconductor stocks, was a significant driver of market gains on Tuesday. Intel reported a substantial increase of over 9%, leading the Nasdaq 100 gainers. NXP Semiconductors NV also climbed more than 8%, with Microchip Technology, Applied Materials, and Texas Instruments all posting gains exceeding 4% and 7% respectively. Other semiconductor companies like GlobalFoundries, KLA Corp, Analog Devices, ON Semiconductor, Lam Research, ASML Holding NV, and Marvell Technology also experienced positive movement, closing up by more than 2%.
Cryptocurrency-related stocks rallied on the back of a more than 5% increase in Bitcoin’s price. MicroStrategy saw gains of over 5%, while MARA Holdings and Galaxy Digital Holdings closed up more than 2%. Coinbase Global also experienced a gain of over 1%.
Conversely, defensive food stocks faced pressure amid the broader market strength. General Mills, Conagra Brands, Campbell’s Company, and J M Smucker all declined by more than 2%. Tyson Foods, Kraft Heinz Co, McCormick & Co, and Hershey Co also closed down by more than 1%.
Notable Individual Stock Performance
MongoDB Inc. (MDB) was a standout performer, closing up more than 22% after reporting Q3 revenue of $628.3 million, significantly exceeding the consensus estimate of $594.8 million. The company also raised its 2026 revenue forecast, further boosting investor confidence.
Boeing (BA) surged over 10%, leading gainers in the S&P 500 and Dow Jones Industrial Average. This followed an announcement from its CFO regarding expectations for positive free cash flow in 2026.
Credo Technology Group Holding Ltd (CRDO) also jumped more than 10% after reporting Q2 adjusted EPS of 67 cents, well above the consensus of 49 cents.
Teradyne (TER) gained over 5% after receiving an upgrade to ‘buy’ from ‘hold’ by Stifel, with a price target of $225.
Cloudflare (NET) rose more than 2% after Barclays initiated coverage with an ‘overweight’ recommendation and a $235 price target.
Six Flags Entertainment (FUN) saw a gain of over 1% following an upgrade to ‘buy’ from ‘hold’ by Truist Securities, setting a price target of $23.
Dexcom (DXCM) climbed more than 1% after Morgan Stanley upgraded the stock to ‘overweight’ with a price target of $75.
On the downside, Symbotic (SYM) fell more than 21% after Goldman Sachs downgraded the stock to ‘sell’ with a $47 price target.
Block (XYZ) dropped over 6%, leading S&P 500 losers, after flagging weakness in its Square segment’s gross payment volume for Q4.
Packaging Corp of America (PKG) declined more than 5% amid reports of potentially slower growth in box demand for December.
Maplebear (CART) decreased by more than 2% following news of Amazon’s planned ultrafast grocery delivery service.
Procter & Gamble (PG) closed down more than 1%, with its CFO citing anticipated impacts from US consumer weakness on the company’s current quarter earnings.
Earnings Reports Scheduled for December 3, 2025
Several companies are scheduled to release their earnings reports on December 3, 2025. These include Dollar Tree Inc (DLTR), Five Below Inc (FIVE), Guidewire Software Inc (GWRE), Macy’s Inc (M), nCino Inc (NCNO), PVH Corp (PVH), Salesforce Inc (CRM), Snowflake Inc (SNOW), Thor Industries Inc (THO), and UiPath Inc (PATH).
Frequently Asked Questions about Market Performance
What drove the stock market higher on Tuesday?
The stock market was primarily boosted by strong performance in semiconductor stocks and a series of better-than-expected earnings reports from technology companies, such as MongoDB and Credo Technology. Boeing’s optimistic outlook also contributed to specific stock gains.
What is the OECD’s updated global economic forecast?
The OECD maintained its global 2025 GDP forecast at 3.2% but slightly increased its projections for the US (to 2.0% from 1.8%) and the Eurozone (to 1.3% from 1.2%).
What are the key US economic data points to watch this week?
Important upcoming data includes the November ADP employment change, September manufacturing production, November ISM services index, weekly jobless claims, September personal spending and income data, and the September core PCE price index, which is the Fed’s preferred inflation measure.
What are the market’s expectations for the next Federal Reserve meeting?
The market is heavily discounting a 98% probability of a 25 basis point rate cut by the Federal Reserve at its upcoming FOMC meeting on December 9-10.
Which stock sectors showed significant strength and weakness?
Semiconductor stocks and cryptocurrency-exposed stocks showed significant strength. Defensive food stocks experienced weakness amid the broader market rally.
Market Outlook and Key Trends
The market is currently navigating a complex landscape influenced by strong corporate earnings, evolving economic data, and anticipation of central bank policy shifts. The resilience shown by the S&P 500 and Nasdaq 100 amidst global economic stability suggests underlying investor confidence, particularly in technology and growth sectors.
Upcoming economic indicators will be critical in shaping the market’s direction, especially concerning inflation trends and consumer spending. The Federal Reserve’s expected rate cut could provide further stimulus, though its impact will depend on the broader economic context and any accompanying forward guidance.
Investors will continue to closely monitor earnings reports and sector-specific developments. The strong performance of semiconductors and technology firms highlights their ongoing importance in driving market performance, while defensive sectors may see shifts in investor preference depending on economic outlooks.
