Broadcom Sell-Off and Rising Bond Yields Put Pressure on Stocks

Today, U.S. markets show mixed activity. The S&P 500 is down 0.20%, while the Dow Jones Industrial Average nudges up 0.16%, and the Nasdaq 100 declines 0.75%. Futures for the S&P and Nasdaq reflect similar trends, with December E-mini S&P contracts down 0.22% and Nasdaq futures down 0.73%.

The Dow reached a record high today, but technology stocks are dragging broader indexes lower. Broadcom shares fell more than 7% after reporting weaker-than-expected sales and failing to provide an AI revenue forecast for 2026. This follows earlier disappointing outlooks from Oracle, prompting investors to shift away from tech amid high valuations and uncertainty over AI spending. The rotation into industrial stocks has helped support the Dow.

Hawkish remarks from Federal Reserve officials are also pressuring markets. Chicago Fed President Austan Goolsbee, who opposed Wednesday's rate cut, highlighted persistent inflation and cautioned that waiting for more data might have been wiser. Similarly, Kansas City Fed President Jeff Schmid prefers keeping policy "modestly restrictive." In contrast, Philadelphia Fed President Anna Paulson expressed concern over labor market weakness rather than inflation risks. Market pricing now reflects only a 24% chance of a 25-basis-point rate cut at the Feds January 27-28 meeting.

Most S&P 500 companies have reported Q3 earnings, with 83% exceeding expectations. Overall, earnings grew 14.6%, more than double the anticipated 7.2% year-over-year gain, marking the strongest quarter since 2021.

International markets show gains. The Euro Stoxx 50 rose 0.40% to a four-week high, Shanghai Composite climbed 0.41%, and Japans Nikkei 225 jumped 1.37% to its highest level in four weeks.

In fixed income, March 10-year Treasury notes fell slightly, though yields rose 3.5 basis points to 4.192%, pressured by hawkish Fed comments. The yield curve has steepened following the FOMCs announcement to buy up to $40 billion in short-term T-bills monthly to support liquidity. European government bonds also moved higher, with Germanys 10-year bund yield up 2.3 basis points and the UKs gilt yield rising 3.1 basis points. UK manufacturing production in October increased 0.5% month-over-month, below expectations of 1.1%. Market expectations suggest only a 1% chance of an ECB rate cut at the December 18 meeting.

Notable movers in U.S. stocks include Broadcom dropping over 7%, Micron Technology down more than 3%, and other chipmakers including Applied Materials, KLA, Marvell, ASML, and Lam Research falling over 1%. Silver mining stocks rose with Hecla Mining up 2%, Newmont and Coeur Mining gaining over 1%. Netskope fell 6% following Q3 losses, while Sandisk, Roblox, Ciena, and Veeva Systems dropped more than 2-3% after downgrades.

On the upside, Quanex Building Products surged 16% after reporting Q4 adjusted EPS above expectations. Lululemon Athletica rose 13% after exceeding Q3 EPS forecasts and raising its 2026 EPS outlook. Phathom Pharmaceuticals jumped 8% on a strong buy rating from Raymond James, while Bristol-Myers Squibb, General Electric, and Tesla gained 2-3% on upgrades and favorable regulatory news in China.

Todays earnings reports include Johnson Outdoors, SR Bancorp, and Value Line.

Sources:

• Stocks Pressured by Broadcom Sell-Off and Higher Bond Yields

Author: Ava Mitchell
Ava Mitchell is a journalist covering culture, art, and literature. She is known for her creative approach and ability to produce in-depth features and interviews.