S&P 500: Nvidia weighs, oil slides and CPI holds the Fed's next move

Key takeaways

• ES is higher despite Nvidia (NVDA). The future is up 0.66% (+49 points) at 7,451 at 12:39 Paris time, against Friday's 7,402 settlement. Nvidia is down 4.8% premarket after its board opened an investigation into CEO Jensen Huang: with a weight close to 8%, the stock alone takes nearly 30 points off the index.
• Oil is deflating the Iran risk premium. Brent is down 3.4% at $94.94 after a 16% drop last week, with Donald Trump calling renewed strikes on Iran "highly unlikely" if talks progress.
• A Fed hike is the base case. According to CME FedWatch, the probability of a 25 bp hike on December 9 is above 78%, versus 66.9% on October 30. Tomorrow's CPI, at 14:30, will settle it.
• What options are pricing: according to Saxo, a 1.25% move in the S&P 500 today and 2.54% through Friday; the VIX is back at 23.4 (-8.9%).
• Earnings remain the foundation: according to FactSet, 84% of S&P 500 companies have beaten the EPS consensus estimate, for blended earnings growth of 31.4%.
• The broad market is leading: in futures, the Dow is up 1.06% and the Russell 2000 1.3%, versus 0.42% for the Nasdaq 100.

Overnight and Europe

Friday, November 6. The S&P 500 gained 0.31% to 7,376.86, driven by technology (+1.45%) and a rebound in semiconductors: AMD (AMD) +11.0%, Lam Research (LRCX) +8.2% on a $25 billion buyback, Nvidia +2.8%. The gain stayed narrow: the equal-weight index (RSP) fell 0.38%, nearly 70 bp behind, and fewer than 41% of stocks finished higher. Consumer staples (-1.28%), materials (-0.73%) and financials (-0.59%) brought up the rear. Intraday reversal: the index touched 7,444.20 before giving back 67 points. For the week, it lost 2.7% and sits 5.7% below its October 6 record close (7,818.93); the correction threshold (-10%) is near 7,037.

Since the close. Nvidia's board opened an independent investigation after reports that Jensen Huang may have been targeted by a foreign intelligence operation; the CEO acknowledged an affair and remains in his post, with Donald Trump's public support. In China, producer prices rose 5.7% year over year in October, versus 5.3% expected, the highest since June 2022.

Asia. Nikkei 225 +2.33% to 58,775.5 and Topix +2.97%. The Taiex jumped 4.94% to 41,664.7, ending seven straight declines, with TSMC, Nvidia's chip foundry, up 4.7%. The Kospi fell 0.81% to 5,018.85, the Hang Seng was flat and Shanghai rose 0.4%.

Europe. The Euro Stoxx 50 is up 0.8% at 6,219.68 at 13:12, led by banks, whose eurozone index gained 1.6% early in the session. The CAC 40 is up 0.77% at 8,201.56 at 12:33, supported by industrials and technology, while luxury weighs.

US futures at 12:39. ES +0.66% at 7,451, Dow +1.06% (+545 points), Nasdaq 100 +0.42%, Russell 2000 +1.3%. Premarket, Nvidia is down 4.8%, Intel (INTC) and Qualcomm (QCOM) between 0.5% and 1%, while Microsoft (MSFT), Alphabet (GOOGL) and Meta (META) are up 1.5% to 1.8%. After their results, KKR (KKR) is up 3.7%, NRG Energy (NRG) 5.4% and Constellation Energy (CEG) 0.6%. The gain is coming from the broad market; tech is held back by its largest weight.

Today's calendar

Tomorrow, October CPI (14:30) is expected at +0.3% month over month (after +0.6%), and core at +0.2% (after +0.3%). The market will look at energy first, which drove September (gasoline +34.2% year over year), then at core. Because no data was collected in October 2025, during the government shutdown, the BLS will not publish some 12-month changes: the read will be on the monthly figures. Core at 0.3% or higher would make a December hike almost a done deal; at 0.1% or lower, the odds would fall and rate-sensitive stocks would benefit.

Rest of the week. Wednesday the 11th, Veterans Day: bond market closed, stocks open. Thursday the 12th at 14:30, jobless claims (195,000 expected, after 189,000). Friday the 13th, October producer prices (+0.4% expected, after +1.3%).

Fed and rates

Today. Michelle Bowman at 14:40; Austan Goolsbee (Chicago) at 16:00, who was leaning hawkish in mid-October without calling for a hike; Thomas Barkin (Richmond) at 18:15, who in late September described a firming economy and businesses with pricing power.

Through Friday. Tuesday, Christopher Waller (governor) before CPI, then Lorie Logan (Dallas), Michelle Bowman and Jeffrey Schmid (Kansas City). Thursday, Beth Hammack (Cleveland), Michael Barr (governor), Austan Goolsbee, Mary Daly (San Francisco) and John Williams (New York). Friday, Michelle Bowman and Mary Daly. John Williams, Alberto Musalem (St. Louis) and Mary Daly have already backed further hikes.

Decision and probabilities. On October 28, the Fed held rates at 3.75%–4.00% by a 10–2 vote, with Lisa Cook and Beth Hammack voting for a hike, after a 25 bp hike on September 16. According to CME FedWatch, the probability of a hike on December 9 is above 78% this Monday, versus 76.8% on Friday and 66.9% on October 30. October payrolls tipped the debate: 165,000 jobs versus 65,000 expected, 84,000 added through revisions, unemployment at 4.1%, wages +0.4% month over month.

Yields. 2-year at 4.52%, 10-year at 4.86% (+2 bp), 30-year at 5.26%, unchanged; the 2s10s spread is about 35 bp. According to Goldman Sachs, the 10-year could settle between 4.75% and 5.0% if risk assets stabilize. Today's link: the drop in Brent is compressing expected inflation and keeping the 10-year in check even as a December hike becomes the base case. A rebound in oil would remove that support on the eve of CPI.

Earnings

According to FactSet, 88% of S&P 500 companies have reported: 84% beat the EPS consensus estimate (5-year average: 78%) and 74% the revenue estimate, for growth of 31.4% in earnings and 14.3% in revenue. The forward 12-month P/E, at 17.7, is below its 5-year average (19.8).

Reported this morning, before the open

KKR (KKR) posted a second straight record quarter: fee-related earnings of $1.42 per share (+27%), $25 billion raised, $804 billion in assets under management. In a market that doubts private credit, it is support for Blackstone (BX), Apollo (APO) and financials, Friday's laggards.

Constellation Energy (CEG) crushed the consensus estimate and put its new full-year range above the old one, when the market was only hoping it would be maintained. The group is buying the Rhode Island State Energy Center plant and announced a nuclear collaboration with Google and a conditional Department of Energy loan commitment of up to $5 billion. The premarket reaction is modest (+0.6%) for a stock that has lost 17% in a month, but the release revives the power-for-data-centers theme, already rekindled on Friday by Vistra (VST, +10.6% on raised guidance). NRG Energy (NRG) beat the consensus estimate by more than a dollar: a small direct effect, a strong signal for utilities.

Expected tonight, after the close

Occidental (OXY) reports after a 16% drop in Brent in one week: the market will judge whether its production and deleveraging guidance holds up. Take-Two (TTWO) is targeting $8.0 to $8.2 billion in net bookings for the year; any sign of a GTA VI delay would weigh heavily on the stock.

Later. CoreWeave, not in the index but a major Nvidia customer, reports Tuesday; Applied Materials (AMAT) Thursday the 12th after the close; Cisco (CSCO) this week; Nvidia on November 17.

Geopolitics and conflicts

US – Iran: the Strait of Hormuz

Donald Trump said on CNN on Sunday that a return to war was "highly unlikely" if Tehran signs "a very strong agreement" on its nuclear program and reopens the Strait of Hormuz, which remains closed. Washington confirmed a limited strike near Qeshm Island and keeps three aircraft carriers in the region and a naval blockade. Tehran called the US response to its seven conditions for reopening "unconvincing"; the Revolutionary Guards say four tankers caught fire after hitting mines, and Houthi drones struck the Aramco tower in Riyadh. Qatar, the mediator, denies that the talks have failed.

Channel: energy (Brent -16% last week), then expected inflation and the Fed. A deal would remove more of the risk premium, hurting the energy sector but helping rates and the broad market; an escalation would take Brent back toward $100 and make a December hike almost certain.

US – China: the Huang affair

The investigation concerns a former executive of Megaspeed, an Nvidia customer, whom US intelligence suspects of having worked for Beijing, according to the New York Times. Beijing calls the accusation unfounded; Dan Ives, an analyst at Wedbush, expects congressional investigations, and a hearing for Jensen Huang has been mentioned for November 18.

Channel: Nvidia, the index's largest weight, at -4.8% (nearly 30 index points), and the risk of tighter controls on chips sold to China.

After the midterm elections

Democrats won the House and the Senate on November 3 (54 Senate seats according to NBC, two uncalled). According to XTB, the Nasdaq 100 has lost about $2.3 trillion in market value since the vote, on fears of stricter rules for AI and data centers. According to UBS, the new Congress improves the odds of lower tariffs on building materials.

Channel: the valuation of the AI heavyweights versus the rest of the market, which explains the gap between the cap-weighted and equal-weight indexes.

Oil and commodities

At 12:41, Brent is down 3.4% at $94.94, versus Friday's $98.32 settlement, and WTI nearly 3% at $88.17. Brent is coming off its steepest weekly drop since the start of the pandemic (-16%), on hopes of a deal with Tehran; Hormuz remains closed and tanker attacks continue, but JPMorgan points to a growing supply surplus as demand slows. US natural gas is up 1% at $3.03, gold 1.1% at $4,119 an ounce.

For ES, the channel is twofold: the energy sector falls with crude, which Occidental (OXY) will illustrate tonight; and lower crude compresses expected inflation on the eve of CPI. A return of Brent above $100 would reverse both effects: support for energy, pressure on rates and the rest of the index.

Dollar and volatility

The dollar (DXY) is holding near 102.2, slightly lower after Friday's jobs-driven jump; EUR/USD is trading near 1.1150 and USD/JPY near 158.2, after a record intervention of about $50 billion confirmed by Tokyo. The VIX is back at 23.4 (-8.9%), after 25.64 on Friday and 28.18 on Thursday. According to Saxo, the VIX futures curve remains inverted (November contract at 22.25, below spot), a sign that short-term hedges have not been unwound, and options are pricing a 1.25% move today and 2.54% through Friday, with the SKEW index at 153.55.

A VIX back above 25.64 would signal renewed buying of protection; below 22, the curve would normalize. Russell 2000 (+1.3%) and Dow (+1.06%) ahead of the Nasdaq 100 (+0.42%): no broad risk aversion, but targeted distrust of the AI heavyweights.

What to watch in today's session

• 14:40, Bowman. A speech in favor of a hike, with the 2-year above 4.55%, would erode the gain in futures before the open.
• 15:30, the open. Nvidia creates a sell-side imbalance on the cap-weighted index, against buyers in financials, industrials and small caps. Confirmation: RSP ahead of the S&P 500 and the Russell 2000 above +1%. Invalidation: contagion to Broadcom (AVGO) and other semiconductors, which would take the index back below 7,376.86, Friday's close; Friday's high (7,444.20) is the reference.
• 16:00 and 17:00, Goolsbee then the New York Fed. FedWatch above 80% or expectations above 4%: pressure on short-term rates.
• Oil, all session. Below $94, the risk premium keeps deflating; an incident in Hormuz that took Brent back toward $100 would turn the session around.
• 18:15 and 19:00, Barkin then the 3-year auction. Weak demand would push the 2-year back up late in the session.
• Liquidity. The eve of CPI and a VIX above 20: likely lighter volume in the afternoon, a thinner order book, sharp moves on headlines.
• 22:00. Occidental (OXY) and Take-Two (TTWO) report; ES will trade them in the electronic session, ahead of the 14:30 CPI.

The morning tone is easing: oil lower, the broad market higher, Nvidia isolated. Core CPI at 0.3% or higher tomorrow, or Nvidia contagion to other semiconductors at the open, would be enough to turn the session.