Here is Schwab's early look at the markets for Wednesday, December 3.
Investors start the day awaiting jobs and services sector data while perusing the latest tech earnings. Tuesday featured light gains for the broader market led by strength in tech and crypto as risk sentiment improved. Still, Wall Street's advance was relatively narrow and the S&P 500 index remains below last week's close, raising questions about how much conviction rallies may have so close to all-time highs.
Marvell Technology and CrowdStrike reported after the close yesterday, providing the latest look at AI and cyber security trends. Marvell's numbers roughly matched consensus. Guidance came in about as expected, while data center revenue growth of 38% beat the company's own forecast. Also, Marvell announced the acquisition of Celestial AI, which it said, "expands our leadership in AI connectivity." Shares fell sharply in post-market trading after the earnings and acquisition news.
CrowdStrike's results and guidance were about as analysts had expected, and shares were choppy in post-market trading despite a 22% year-over year revenue rise.
Salesforce reports after today's closing bell. It's been a tough year for the company's shares, weighed down by concerns that software faces AI competition.
However, revenue climbed 10% in the quarter it reported three months ago, and Salesforce maintained its full-year revenue outlook then while raising earnings guidance. This time, investors will likely watch performance of the company's Agentforce AI software for signs of Salesforce getting traction from its AI offerings.
Other earnings to wat ch today include retailers DollarTree and Macy's before the open, along with enterprise software firm Snowflake after the close.
There's also a fair share of data today, including ADP employment, due at 8:15 a.m. ET. It's expected to show November jobs growth of just 10,000, down from 42,000 in October.
While weakness is pretty much dialed in, any sign of significant unexpected strength could set off more discussion about the Federal Reserve's decision next week. Chances of a rate cut were 89% as of late Tuesday, according to the CME FedWatch Tool, and at this point, it would be surprising if the Fed didn't deliver what the market expects. Keep in mind, however, the ADP report isn't necessarily correlated with official government jobs data due December 16, as it only tracks private sector employment.
More jobs data is due tomorrow morning with the November Challenger job cuts report after a sharp rise in October layoffs. Consensus is for just under 100,000, down from 153,000 in October. Thursday features weekly jobless claims, too, with Briefing.com consensus at 220,000, near the low end of the recent range.
Despite what appears to be a lackluster jobs climate, holiday shoppers seem resilient. "Cyber Monday" sales grew 4.5% versus last year from midnight to 6:30 pm ET Monday, according to Adobe Analytics. Black Friday sales also looked solid, the National Retail Federation said. November retail sales are due December 17, but investors won't likely hear directly from most major retailers until early next year on their fourth quarter earnings calls. Macy's earnings call today and Costco's earnings next week are two of the last opportunities this year to get the retailer's eye view on shopping trends.
The so-called "wealth effect," driven partly by rising stock prices and by cryptocurrency, comes into question when scrutinizing holiday shopping this year. Bitcoin made a sharp turn-around on Tuesday to climb 6% after falling 5% the day before. Still, it's down almost 30% from its October peak, and there's a chance that could make some consumers hesitant to spend big on shopping trips.
The 10-year Treasury note yield, meanwhile, has been stuck in a range for weeks between 4% to 4.15%. It slipped below 4.1% Tuesday, though the real test might come this morning. Today's 10 a.m. November ISM services report follows October data that showed a jump in the prices paid component to 70%. That was the first reading above 70% since October 2022, and raised inflation concerns. Another reading that high, combined with Monday's rising prices in the ISM manufacturing report, might reinforce inflation fears as the Fed prepares to meet next week.
One reason Treasury yields advanced Monday was concern about a possible Bank of Japan rate hike later this month. This also drove the yen higher versus the dollar and appeared to be among the main pressure points on cryptocurrencies earlier this week. Though bitcoin reversed sharply on Tuesday, that doesn't mean the issue has disappeared.
"As Japanese yields rise, foreign investors may diversify out of Treasuries if they can get attractive yields elsewhere," said Collin Martin, head of fixed income research and strategy, Schwab Center for Financial Research, noting that Japanese yields are the highest since 2008.
The Cboe Volatility Index, or VIX, flagged to below 17 Tuesday, but the market remains in contango. VIX contracts for later this month and beyond rise above 20, the historic average, perhaps hinting at geopolitical and rate worries into 2026.
Technically, an important chart point remains 6,770, while resistance likely rests near the all-time high of 6,920 for the S&P 500 index. The index has traded in a range between roughly 6,550 and 6,900 since mid-September and recently clawed back above its 100-day and 20-day moving averages.
Despite Wall Street's moderate gains Tuesday, the sector landscape looked didn't impress. Just three of 11 S&P sectors rose, with recent leaders like energy, utilities, and materials finishing deep in the red. While industrials led on strength from Boeing, info tech and communication services were in the mix placing second and third on the daily scorecard. This doesn't advance the "broadening breadth" scenario many bullish investors like to see, but it was just one day.
Only 52% of S&P 500 stocks trade above their 50-day moving averages, though the S&P 500 is up nearly 5% from the recent November 20 low. This suggests breadth remains relatively narrow. That said, the Relative Strength Index, or RSI, has climbed from 31 to 57 for the S&P 500 index over that time frame, going from near-oversold conditions to back where it was in early November before stocks stumbled that month.
Checking individual stocks Tuesday, Boeing soared 10% after the company said it expects positive free cash flow in 2026 and higher 737 and 787 deliveries. GE Vernova and Caterpillar also performed well to help industrials lead the sector race, but neither had any big news associated with them. Strength may reflect enthusiasm over the economy, possibly related to ideas of lower rates as well as positive seasonal factors.
Stocks related to chips and AI were mixed, with Broadcom and Advanced Micro Devices pulling back while ASML, AppLovin, Marvell, and Taiwan Semiconductor had positive sessions. Nvidia put together its first back-to-back gains in almost a month but remains well below October's all-time highs. Apple and Walmart both set new all-time highs Tuesday, possibly helped by strong shopping trends so far this holiday season.
Airlines including United Airlines and Delta Air Lines climbed 2% to 3% after what the U.S. government said was the busiest Sunday after Thanksgiving ever in terms of travelers passing through airport checkpoints.
Warner Bros Discovery rose 2.7% after The Wall Street Journal reported that Netflix has sweetened its offer for the company, while Paramount Skydance and Comcast have submitted second bids, Barron's said.
Shares of Symbotic, a robotics warehouse automation company, fell 21% after getting downgraded by Goldman Sachs to Sell from Neutral.
The Dow Jones Industrial Average® ($DJI) added 185.13 points Tuesday (+0.39%) to 47,474.46; the S&P 500 index (SPX) climbed 16.74 points (+0.25%) to 6,829.37, and the Nasdaq Composite® ($COMP) tacked on 137.75 points (+0.59%) to 23,413.67.