S&P 500 Today: PPI, Nvidia After Huang, 5% Yields (Nov 13)

Key takeaways

• October producer prices (PPI), out at 14:30, are the only data release of the day. Consensus expects +0.4% m/m for the headline index (prior +1.3%) and +0.3% for the index excluding food and energy, known as "core" (prior +0.7%). A Fed rate hike on December 9 is already priced in: according to CME FedWatch, its probability is 100%, split between 87% for 25 bp and 13% for 50 bp. A week ago, the probability of a hike stood at about 77%.
• Options are pricing a move of about 55 points (0.73%) for the S&P 500 today. The VIX1D, which measures implied volatility over a single session, jumped 26.5% to 15.99 yesterday. For the November 20 expiry, which spans Nvidia's earnings, the implied move is 137 points (1.80%).
• Jensen Huang resigned as CEO of Nvidia (NVDA) on Thursday. The stock fell 4.34% to $166.19, or about 0.3 percentage point and nearly 23 index points for a weight close to 7%. It is up 1.9% premarket. Nvidia reports earnings on Tuesday, November 17.
• Long-term yields remain above 5%. The 10-year stands at 5.13% (+2 bp) after a 12 bp jump on Thursday. The 2-year surged 15 bp on Thursday, to 4.88%.
• Brent is down 0.5% at $95.37 this midday, after +3.3% on Thursday. Donald Trump wrote on Thursday that the United States "doesn't need a deal with Iran."
• The ES future is up 0.13% at 7,625.50. Microsoft (MSFT) is down 2.4% premarket, roughly offsetting Nvidia's rebound in the index.

Overnight and Europe

Thursday, November 12 session

• Close: the S&P 500 ended at 7,592.40 (-0.35%), after erasing a drop of nearly 1% early in the session. It sits 2.9% below its record of 7,818.93 set on October 6.
• Week: the index is up 2.9% since last Friday's close (7,376.86), after alternating up and down sessions. It is on track for its best week since early August.
• Breadth: much weaker than the index. 123 stocks rose and 377 fell. The equal-weight RSP lost 0.87% and the Russell 2000 1.66%, to 2,799.06.
• Sectors:
• leading: energy (+1.51%);
• lagging: materials (-1.28%), communication services (-0.96%), industrials (-0.89%) and financials (-0.72%);
• airlines fell about 5%.
• Semiconductors: rotation within the sector, with AMD (+5.86%) and Broadcom (AVGO, +5.54%) on one side, Super Micro Computer (SMCI, -11.3%) on the other.

After last night's close

• Cisco (CSCO) beat consensus and raised its guidance.
• Applied Materials (AMAT) did the same for the current quarter.
• Nvidia: Colette Kress is serving as interim CEO while remaining CFO. Tim Scott, chairman of the Senate Banking Committee, has asked Jensen Huang and Commerce Secretary Howard Lutnick to testify in December.

Asia (today's closes)

Europe around 11:25

• Euro Stoxx 50: 6,405.7 (+0.1%).
• DAX: 26,800 (+0.1%).
• CAC 40: 8,369 (+0.1%).
• The Stoxx 600 erased a 0.2% drop at the open. The personal and household goods sector had then lost 1%, dragged down by Richemont (-7%).

US futures at 11:30

Premarket moves among index members

• Nvidia is up 1.9% at $169.28.
• Microsoft is down 2.4% at $510.25: the Outlook and Teams outage has lasted two days. For a weight of about 6%, that takes about 11 points off the index.
• Broadcom (-2.8%) and AMD (-2.5%) are giving back part of Thursday's gains.
• Cisco is down 2.3% and Applied Materials 0.5%.
• Alphabet (GOOGL) is up 0.9%.

Today's calendar

All times are Paris time.

PPI components to watch. The market looks at portfolio management fees, airline fares and health care services, which feed into the PCE inflation index. Trade margins are volatile and the series is often revised: a revision to September can change how the October figure reads.

Next week

• Monday, November 16: John Williams (New York Fed) at 15:05, Kevin Warsh (Fed Chair) at 18:00.
• Tuesday, November 17:
• October retail sales at 14:30;
• industrial production at 15:15;
• Beth Hammack (Cleveland Fed) at 15:30;
• earnings from Nvidia and Home Depot (HD).
• Wednesday, November 18: housing starts at 14:30, minutes of the Fed's October meeting at 20:00.
• Friday, November 20: University of Michigan consumer sentiment (final) at 16:00.

Fed and rates

Latest decisions. On October 28, the Fed held rates at 3.75-4.00% by a 10-2 vote. Lisa Cook (Governor) and Beth Hammack (Cleveland Fed) voted for a 25 bp hike. The last hike, of 25 bp, was on September 16.

What officials have said recently

• Lorie Logan, Dallas Fed President and 2026 voter: on November 10, she said "at least two more 25-basis-point rate increases" were needed. She added that a faster pace "this winter" was possible.
• Mary Daly, San Francisco Fed President: on Thursday, she said further hikes would likely be needed.
• Beth Hammack: on Thursday, she argued for restrictive policy, with "more frequent, smaller" hikes.
• Austan Goolsbee, Chicago Fed President: he called October's inflation "borderline disturbing."
• Christopher Waller, Governor: he was considering 50 bp if October core inflation came in at 0.3% or higher. It came in at 0.3%.
• Susan Collins, Boston Fed President (non-voter): in mid-October, she expected another hike before year-end.
• Michelle Bowman: on November 10, she noted that investors were reassessing external financing for AI projects.
• Philip Jefferson: in early October, he said he was "firmly committed" to bringing inflation back to 2%.

US yields this morning

Thursday's 30-year auction was weak. The curve flattened for a fourth straight session.

Link between rates and oil. On Thursday, Brent's jump (+3.3%) coincided with the 12 bp rise in the 10-year. Lorie Logan noted that crude has gained nearly 50% over a year. As long as Brent stays above $95, inflation expectations support the long end of the curve and weigh on tech valuation multiples.

Corporate earnings

Season scorecard. As of November 6, according to FactSet:

• 88% of S&P 500 companies had reported;
• 84% beat EPS consensus and 74% beat revenue consensus;
• aggregate earnings growth is 31.4%;
• the 12-month forward P/E stands at 17.7.

No S&P 500 member reports today before the open or tonight.

Reported last night

Cisco.

• The company raised its annual revenue guidance to $74.8-75.8bn, from $72.2-73.4bn previously.
• It lifted its target for AI infrastructure revenue from hyperscalers, the very large cloud operators, to $9bn from $7.5bn.
• The market is nonetheless selling the stock, as order growth slowed to 21% from 35% in the previous quarter.
• For peers such as Arista (ANET), demand for AI networking is confirmed, but peak momentum may be behind.

Applied Materials.

• Revenue grew 53% and CEO Gary Dickerson expects a "record" year in 2027.
• The low end of the guidance range, however, remains below consensus, hence a neutral reaction.
• It is modest support for Lam Research (LRCX) and KLA (KLAC).

Expected next week (none tonight)

Nvidia. The options-implied move is 1.9 times the average reaction to the last eight reports (4.0%). The stock has lost more than 30% since its October 6 peak and is down 11% on the week. With a weight close to 7%, a 7.7% move would represent about 0.5 percentage point for the index, or nearly 40 points.

Geopolitics and conflicts

United States – Iran: Strait of Hormuz

• Background: the war launched in late February by the United States and Israel against Iran is entering its ninth month. Strikes have largely stopped and a tense stalemate has set in.
• Latest development: on Thursday, Donald Trump wrote that the United States holds "their money" and "their Strait." He asked Vice President JD Vance, who had been leading diplomacy, to refocus on domestic policy.
• Indicator: IMF PortWatch recorded 3 transits through the strait on November 8, against 85 per day before the crisis.
• Channel to the index: energy prices, inflation expectations and long-term yields.
• Toward a deal: resumption of a negotiating channel and lifting of the blockade. That would mean lower Brent, easing yields and support for tech and small caps, at the expense of energy.
• Toward escalation: resumption of strikes. Brent above $98 (last Friday's close), 10-year above 5.15% and rotation into energy.

Houthis – Saudi Arabia

• Latest development: Yemen's Houthis claim drone strikes against Saudi Aramco in Riyadh, a pumping station on the East-West pipeline and Yanbu. The Riyadh-led coalition says it intercepted two drones. Aramco has reported no disruption.
• Indicator: the East-West pipeline carries about 4 million barrels per day that bypass Hormuz.
• Channel to the index: confirmed damage would trigger a fresh risk premium on oil, and therefore higher yields.

Nvidia, China and Congress

• Latest development: according to reports cited by CNBC, one of Jensen Huang's affairs reportedly involved a woman US intelligence suspects of spying for China. The Senate Banking Committee is calling Jensen Huang and Howard Lutnick to testify in December.
• Indicator: about $1.8 trillion in market value wiped out in five weeks.
• Channel to the index: semiconductors and the risk of tighter export controls.

Oil and commodities

• Brent: $95.37 (-0.5%), after a Thursday close of $95.82 (+3.3%). Down about 3% on the week, it is headed for a second weekly decline.
• WTI: $88.02 (-0.8%), after a close of $88.74 (+2.6%).
• Today's driver: in its monthly report this morning, the International Energy Agency (IEA) sees signs of rebalancing and raises its fourth-quarter supply estimate by 3.3 mb/d.
• Natural gas: $3.269 (-2.1%).
• Gold: $3,902.9 (+0.45%), after -2.9% on Thursday.

Impact on the index.

• Oil above $98: the energy sector gains, but higher inflation expectations and long-term yields weigh on tech and small caps. Net negative for the index.
• Oil below $92: the reverse, with easing yields that would support market breadth.

Dollar and volatility

FX at 11:40

Yen. Japanese Finance Minister Satsuki Katayama pledged to "respond appropriately." A Japanese intervention would strengthen the yen and trigger an unwind of yen-funded positions, with a risk of volatility in risk assets.

Volatility.

• The VIX stands at 18.38 (-1.7%).
• The futures curve remains in contango: November at 18.95, December at 19.68.
• The VIX3M/VIX ratio has eased to 1.07, from 1.10 previously.
• The SKEW index, which measures demand for protection against a sharp decline, is at 150.16. Nasdaq 100 volatility (VXN) stands at 28.55.

Sentiment.

• A VIX above 20 would flip the futures curve into backwardation and signal accelerating hedging. It reached 28.18 on November 5.
• On Thursday, the Russell 2000 (-1.66%) and the equal-weight index sharply underperformed the Nasdaq 100 (-0.30%). The pressure is coming from rates, not from broad risk aversion.

Watch points for the session

1. Before 14:30. Premarket pits Nvidia (+1.9%) against Microsoft (-2.4%), whose contributions cancel out. Liquidity is thin ahead of the release.
2. 14:30, PPI.

• Core at 0.5% or higher, with the 2-year above 4.90%, would invalidate the morning's stability. The probability of 50 bp would then exceed 13%.
• Core at 0.2% or lower would bring the 10-year back toward 5.05%.

1. 15:30, open.

• Watch order imbalances on Microsoft and Nvidia, as well as rotation within semiconductors (Broadcom, AMD).
• The 55-point implied move puts the cash index range between about 7,537 and 7,647.
• How the index behaves around Wednesday's close, 7,619.38, will be a reference point.

1. 15:10 to 18:00, Fed speakers. Any mention of 50 bp by Lorie Logan would push the 2-year higher.
2. Throughout the session, cross-market signals.

• The RSP needs to confirm against the cap-weighted S&P 500.
• Watch the Russell 2000 below 2,799.
• Watch Brent above $96 and the VIX above 20.

1. Liquidity. It is a Friday ahead of Nvidia week, the risk of a weekend with no deal with Iran encourages position trimming late in the session, and futures reopen at midnight Sunday. No earnings tonight.

Morning tone: cautious stabilization after the Nvidia shock, hinging on PPI. Core at 0.5% or higher, with the 10-year above 5.15%, would tip it toward risk aversion.