US Market Wrap: November 21, 2025

MARKET SNAPSHOT

• Equities declined, Treasuries increased, Crude oil decreased, the Dollar increased, and Gold remained flat.

MARKET RECAP

• Despite strong earnings and guidance from NVIDIA (NVDA), stocks failed to maintain gains. The US Non-Farm Payroll (NFP) figure exceeded expectations, but the unemployment rate rose. Initial Jobless Claims (IJC) fell to 220k, while Continued Claims reached a four-year high. The Philadelphia Fed Manufacturing Index missed expectations, but existing home sales exceeded forecasts. Ukraine is set to consider a US peace proposal. Fed Governor Cook noted an increased likelihood of significant asset price declines. Chicago Fed President Goolsbee cautioned about a potential AI bubble. Abbott (ABT) is set to acquire Exact Sciences (EXAS). Walmart (WMT) reported earnings and guidance that beat expectations.

UPCOMING ECONOMIC DATA AND EVENTS

• Data releases scheduled: UK Public Sector Net Borrowing (PSNB) for October, UK Retail Sales for October, Eurozone, UK, and US Flash Purchasing Managers' Indices (PMIs) for November, US Real Weekly Earnings for September, Canadian Retail Sales for September, and the US University of Michigan Consumer Sentiment Index for November.
• Events scheduled: Euro Area Indicator of Negotiated Wage Rates for Q3.
• Ratings updates scheduled: Moody’s ratings on the UK and Italy.
• Speakers scheduled: ECB’s de Guindos, Lagarde, and Nagel; Fed’s Williams, Barr, Jefferson, and Logan; and SNB’s Schlegel.

MARKET WRAP

US indices experienced a volatile trading day, ultimately closing with significant selling pressure. Initial market sentiment was risk-on, driven by strong gains in US indices, outperformance in high-beta currencies, and strength in the crude oil complex, following a positive earnings report and guidance from NVIDIA (NVDA). This helped alleviate concerns about AI overvaluation and fostered a risk-on environment. Prior to the shift in sentiment, US labor market data was released, showing a strong headline NFP figure but a dovish reaction due to downward revisions and a rising unemployment rate. The September NFP exceeded expectations but was accompanied by downward revisions and increases in both the unemployment rate and the participation rate. Jobless claims data indicated a decrease to 220k for the latest week, while the missed data during the government shutdown had hovered around 230k each week. Continued claims reached a four-year high. However, as the US session progressed, risk sentiment reversed sharply, with US indices experiencing heavy selling pressure and settling at their lows. NVIDIA (NVDA) saw losses of approximately 3% after being up around 6% at its peak. Bitcoin appeared to lead the selling, bottoming out at USD 86.04k, which triggered selling in other risk assets, including high-beta currencies. The Yen recovered some of its recent losses. The risk-off trade lacked a specific catalyst, but AI valuations remain a concern, even after the strong NVIDIA (NVDA) report. Goldman Sachs had warned on Wednesday of USD 39 billion in equity sales from trend-following hedge funds after the SPX fell below 6,725 on Monday. The FOMC minutes from yesterday also highlighted risks of equity downside, and Fed Governor Cook echoed similar concerns. Ahead of November's OpEx tomorrow, desks highlight that it is the largest expiry in November's history. Treasuries bull steepened on US jobs data and risk-off tone, despite initial two-way moves on said data.

US DATA

SEPTEMBER NFP: The September nonfarm payrolls report indicated an increase of 119k jobs, surpassing the forecast of 50k and nearing the upper end of analyst estimates (-20k to +120k). Private payrolls accounted for 97k of these jobs, exceeding the forecast of 62k. However, the prior NFP headline was revised downward to -4k from +22k, resulting in a net two-month revision of -33k, continuing the trend of downward revisions to NFP figures. The unemployment rate increased to 4.4% from 4.3%, exceeding forecasts, but was accompanied by an increase in the participation rate to 62.4% from 62.3%. Earnings rose 0.2% month-over-month (compared to an expected 0.3% and a previous 0.4%), with a year-over-year increase of 3.8% (matching the previous figure and exceeding the expected 3.7%). For comparison, the September ADP reported -32k jobs, while Revelio Labs’ early September NFP estimate of 60.1k was later revised to 33k. The 4.4% unemployment rate compares to the Chicago Fed's September estimate of 4.34%. This is the final NFP report the Fed will review before the December FOMC meeting, placing the Fed in a challenging position due to ongoing uncertainty. Despite the seemingly solid report, markets reacted dovishly due to the rising unemployment rate and downward revisions. WSJ's Timiraos notes the difficulty in determining how the jobs report will resolve divisions within a fractured Federal Reserve. The October FOMC meeting minutes revealed that "many" suggested maintaining rates through year-end would be appropriate, but most believed further cuts would be appropriate, and several suggested a cut could be warranted.

CLAIMS: The Department of Labor (DoL) resumed releasing weekly claims data today and also filled in the data gaps from the government shutdown. The latest Initial Jobless Claims (week ending November 15th) decreased to 220k from 232k, below the expected 230k. The missing data, spanning from the week of September 27th until now, largely hovered around 230k before dropping to 220k in the latest release. Meanwhile, continued claims (week ending November 8th) increased to 1.974 million from 1.946 million, exceeding the forecast of 1.951 million. This represents the highest level in four years and has been gradually increasing throughout the government shutdown, from 1.93 million to 1.974 million in the latest update. Oxford Economics notes that "These claims should fall sharply now that the shutdown is over, and furloughed employees are returning to work." Oxford Economics also notes that the latest claims data does not alter their expectation for the Fed to maintain rates in December, stating that the Fed would need to see a significant deterioration in the labor market to cut rates. They caution that there are some signs of softening in various private sector metrics, but that is not the signal coming from the jobless claims data.

PHILLY FED: The Philadelphia Fed Business Index came in at -1.7, below the expected +2.0, but an improvement from October’s -12.8. Within the breakdown, new orders declined to -8.6 from 18.2, while the inflationary gauge of prices paid rose to 56.1 from 49.2. Employment and capex came in at 6.0 (previous 4.6) and 26.7 (previous 25.2), respectively. The 6-month index notably improved to 49.6 from 36.2, and future indicators suggest that firms continue to expect growth over the next six months.

EXISTING HOME SALES: Existing home sales increased by 1.2% in October to 4.1 million, exceeding the expected 4.08 million and the prior 4.05 million. The inventory of homes for sale was 1.52 million units, representing 4.4 months' worth, compared to September’s 4.6 months' worth. Median home prices rose 2.1% year-over-year to USD 415.2k. NAR Chief Economist Yun noted that "Home sales increased even with the government shutdown due to homebuyers taking advantage of lower mortgage rates.” Yun added, “rents are decelerating, which will reduce inflation and encourage the Fed to continue cutting rates and pulling back their QT”. Overall, Yun notes this will help bring more homebuyers into the market since the Fed rate has an indirect impact on mortgage rates.

FED

COOK (Voter): The Fed Governor stated that the US financial system is resilient and sees an increased likelihood of outsized asset price declines, though added it is not a risk to the financial system. The Governor doesn't see private credit posing a current threat to financial stability, but says it is worth keeping a close eye on it. Cook added that hedge fund trading strategies in Treasuries are a potential risk to market liquidity.

GOOLSBEE (2025 voter): The Chicago Fed President reiterated the Fed’s commitment to 2% inflation, stressing that 3% is too high and expressing unease that inflation appears to have stalled. He expressed concern about frontloading rate cuts or assuming inflation will prove transitory, particularly given the current data disruptions, which have left the Fed more paranoid about the inflation side. He acknowledged a notable slowdown in job creation but remains doubtful it signals a recession, describing the current low hiring and firing as a sign of uncertainty. Goolsbee noted that AI-related investment and data center growth complicates the assessment of where they are in the cycle, and he warned of possible AI bubble risk.

HAMMACK (2026 voter): The Cleveland Fed President warned that easing monetary policy now could encourage financial risk-taking and potentially increase financial stability risks, adding that cutting rates too soon risks prolonging high inflation. She stressed that financial conditions remain quite accommodative, with the financial system and banks in good shape, and household finances holding up. She said the September jobs report was mixed but in line with expectations, highlighting the policy challenge in a low-hire, low-fire environment. She emphasized that inflation remains too high, particularly in services, with significant pressure reported by district contacts and households increasingly squeezed. She noted that inflation expectations are contained—“a really good thing”—but just one piece of the puzzle. She described the current policy as barely restrictive, if at all, and stated that policy should stay somewhat restrictive given ongoing inflation concerns. Hammack said she will approach the December meeting with an open mind, and added she would like to see more consistent SRF usage, accepting that money market fluctuations are to be expected.

FIXED INCOME

T-NOTE FUTURES (Z5) SETTLED 6 TICKS HIGHER AT 112-28

T-Notes bull steepened on US jobs data and risk-off tone. At settlement, 2-year -3.8bps at 3.560%, 3-year -4.1bps at 3.551%, 5-year -3.5bps at 3.673%, 7-year -3.1bps at 3.865%, 10-year -2.7bps at 4.104%, 20-year -2.6bps at 4.697%, 30-year -2.2bps at 4.730%.

INFLATION BREAKEVENS: 1-year BEI +3.0bps at 2.662%, 3-year BEI -2.4bps at 2.421%, 5-year BEI -2.4bps at 2.266%, 10-year BEI -2.4bps at 2.238%, 30-year BEI -2.2bps at 2.205%.

THE DAY: T-Notes meandered overnight before selling off on the positive risk tone seen overnight and in Europe following the strong NVIDIA (NVDA) results after the close on Wednesday. However, a turnaround was seen with the curve bull steepening after the September US jobs report and jobless claims releases. The NFP headline was strong at 119k, well above the 50k forecast, but the prior was revised down to -4k with two-month net revisions of -33k - reminding us of the tendencies NFP has to be revised lower. The unemployment rate rose to 4.4% from 4.3%, albeit this was accompanied by an uptake in participation too. Meanwhile, the jobless claims data was released, with the missing weeks also announced - seemingly hovering around/just under the 230k level, until the latest release, which fell to 220k - showing no signs of stress in the labour market. However, continued claims surged to a four-year high at 1.974mln, albeit analysts at Oxford Economics expect this to fall in the weeks ahead as furloughed public workers return to work following the government shutdown. Nonetheless, T-Notes moved higher across the curve in a steeper fashion as rate cut bets for December were added on again. Markets are now pricing a 33% probability of a 25bps cut in December, vs 20% pre-data. T-Notes continued to push higher after the data, with upside supported by extreme equity selling pressures (SPX fell from 6,770 to 6,553 at extremes). The risk-off trade had no fresh driver, but AI valuations remain a concern, even after the strong NVDA report, while Goldman Sachs warned Wednesday of USD 39bln in equity sales from trend-following hedge funds after the SPX fell to sub 6,725 on Monday. There had also been commentary in yesterday's FOMC minutes about risks of equity downside, while Fed's Cook echoed the same concern today.

SUPPLY:

Notes

The US sold USD 19bln of 10-year TIPS at a high yield of 1.843%, tailing the when issued by 1.9bps. The tail was not as large as the prior 5.0bps, but it was larger than the 1.4bps six-auction average. The bid-to-cover of 2.41x was above the prior 2.20x and the average 2.36x. Meanwhile, the breakdown saw direct demand slip to 23.7% from 26.1%, but marginally above the 23.0% average. Indirect demand offset the slip, rising to 61.5% to 56.1%, but below the 65.5% average. This left dealers with an above-average share of 14.8%, below the prior 17.8%.

US Treasury to sell (all to settle December 1st):

• USD 69bln of 2-year notes on November 24th
• USD 70bln of 5-year notes on November 25th
• USD 44bln of 7yr notes on November 26th

Bills

US Treasury to sell (all to settle Nov 28th):

• USD 86bln 13-week bills on Nov 24th
• USD 77bln 26-week bills on Nov 24th
• USD 85bln 6-week bills on Nov 25th

STIRS/OPERATIONS

• Market Implied Fed Rate Cut Pricing: Dec 8bps (prev. 7bps), January 22bps (prev. 21bps), March 32bps (prev. 31bps).
• NY Fed RRP op demand at USD 1.1bln (prev. 0.905bln) across 8 counterparties (prev. 8)
• NY Fed Repo Op demand at USD 0.001bln across two operations today (prev. 0.006bln).
• EFFR at 3.88% (prev. 3.88%), volumes at USD 76bln (prev. 78bln) on November 19th.
• SOFR at 3.91% (prev. 3.94%), volumes at USD 3.179tln (prev. 3.220tln) on November 19th.

CRUDE

WTI (F6) SETTLED USD 0.25 LOWER AT 59.00/BBL; BRENT (F6) SETTLED USD 0.13 LOWER AT 63.38/BBL

The crude oil complex was negatively impacted by positive developments regarding Ukraine/Russia and broader risk-off sentiment. During the European morning, benchmarks experienced modest upside as the Kremlin stated that consultations or negotiations with the US on peace in Ukraine were not taking place, but contacts are. However, as Europeans left for the day, benchmarks saw a bearish catalyst as Ukraine’s President Zelensky said he agreed to work on the US draft plan to end the war, and was ready to work with the US and Europe for peace. That started the move lower, but as risk sentiment got dramatically hit, albeit on no particular driver, WTI and Brent saw heavy selling to hit troughs of USD 58.59/bbl and 62.94/bbl, respectively. Notable risk off was seen, with US equity futures and Bitcoin tumbling lower, with NVIDIA wiping out all post-earnings gains and sitting with losses of c. 2.5%, at the time of writing, despite strong earnings and guidance.

EQUITIES

• CLOSES: SPX -1.56% at 6,539, NDX -2.38% at 24,054, DJI -0.84% at 45,752, RUT -1.82% at 2,305.
• SECTORS: Consumer Staples +1.11%, Real Estate -0.37%, Utilities -0.52%, Health -0.62%, Financials -0.90%, Energy -1.07%, Communication Services -1.07%, Materials -1.62%, Industrials -1.70%, Consumer Discretionary -1.73%, Technology -2.66%
• EUROPEAN CLOSES: Euro Stoxx 50 +0.33% at 5,560, Dax 40 +0.63% at 23,308, FTSE 100 +0.21% at 9,528, CAC 40 +0.34% at 7,981, FTSE MIB +0.62% at 42,918, IBEX 35 +0.63% at 15,989, PSI +0.98% at 8,152, SMI +0.16% at 12,550, AEX +0.17% at 935.

STOCK SPECIFICS:

• NVIDIA (NVDA) reported strong results, with EPS and revenue exceeding expectations and upbeat guidance. Data center sales increased 66%, driven by Blackwell and GB300 demand. Cloud GPUs are reportedly sold out.
• Abbott (ABT) confirmed its acquisition of Exact Sciences (EXAS) for USD 105 per share. Reports emerged yesterday, and EXAS closed at USD 86.18 per share, with gains of 23.7%.
• Bath & Body Works (BBWI) reported weak results, with EPS and revenue below expectations, weak next-quarter guidance, and a slashed full-year outlook.
• Jacobs Solutions (J) reported solid quarterly metrics, with the midpoint of its full-year profit view above Street expectations.
• Marsh & McLennan (MMC) authorized the renewal of a USD 6 billion buyback program.
• Moderna (MRNA) secured a 1.5 billion 5-year credit agreement from Ares Management.
• Palo Alto Networks (PANW) results and outlook failed to excite investors, and after it unveiled a new AI-focused deal, as it will acquire Chronosphere for 3.35bln in cash; note, EPS and revenue beat.
• Walmart (WMT) reported EPS, revenue, and comparable sales that beat expectations, along with solid guidance.
• Warner Music Group (WMG) revenue exceeded expectations.

US FX WRAP

The Dollar saw marginal gains amid the broad risk-off trade, although the moves in FX were somewhat contained in comparison to other asset classes, particularly US equities and crypto. The Dollar Index rose to highs of 100.35, from an earlier trough of 100.02, with the low hit in the wake of the US labor data. Recapping, the headline jumped to 119k in Sept. (exp. 50k), from a revised -4k in August. Highlighting the strong number, Chair Powell previously said the break-even rate could be estimated between 0-50k. Elsewhere, u/e rate ticked higher to 4.4% (exp. & prev. 4.3%), but the participation rate also rose to 62.4% from 62.3%. Note, Fed September SEP sees the median u/e at 4.5% at year-end, which are set to be updated in December. As a reminder, this is the last NFP report we get before the December FOMC meeting (10th), as both Oct. & Nov. are released on December 16th. Initial jobless claims (w/e 15th Nov) printed 220k (exp. 230k, prev. 232k). However, as the session progressed, risk sentiment noticeably soured, with US equities tumbling into the red, and NVDA paring all gains, and more, amid no particular headline driver, but the moves favored the Dollar.

G10 FX was broadly hit on the aforementioned risk environment, with AUD, CAD, and NZD lower, with the pairs trading at respective weakest levels, at the time of writing. The Pound still managed to eke out gains, albeit well off earlier highs, while the Yen was lower but reclaimed a lot of its earlier losses. Prior to the drastic change in sentiment, which benefited haven FX, the Kiwi was the clear outperformer, due to the initial positive risk tone, spurred on by strong NVIDIA results. However, even before the turnaround, the Aussie was lagging, largely conforming to the subdued Chinese risk tone, with metals underperforming.

EUR ultimately moved at the whim of the USD and traded within a 1.1508-1.1549 range; German Producer Prices data printed more-or-less in line, and had limited impact, while newsflow for the GBP was light, as markets count down to next week’s budget.

USD/JPY hit a peak of 157.89, but came off such levels on the change in risk sentiment, likely to the relief of some Japanese officials, as the verbal intervention is likely to continue in the coming days. Recapping overnight commentary, Japan's Chief Cabinet secretary said he is watching market moves, including the bond market, noting he is concerned about FX moves. He called the recent moves sharp and one-sided. Finance Minister Katayama did not comment directly on JGB yield levels and reaffirmed with BoJ's Ueda that they will watch market moves with a strong sense of urgency. BoJ's Koeda wants to closely watch how FX vol could affect prices, but gave no comment on specific long-term rate levels. Koeda added BoJ is ready to step into the market via an increase in bond buying and emergency ops. when long-term yields make rapid move