Closing Recap

Friday, November 07, 2025

U.S. stocks were firmly in the “red” most of the trading day Friday, pressured by economic impact fears from the prolonged gov’t shutdown, and general downside momentum on AI tech valuation concerns raised this week on Wall Street, but…stocks found themselves bouncing all afternoon after the S&P 500 and Nasdaq 100 both breached and then recovered their 50-day moving average supports in another buy the dip moment as the S&P turned positive in the final minutes of the trading day, in a near 100-point bounce off the lows! Question is, will the shutdown be averted this weekend and will the dip bounce hold heading into Monday? Most risk assets rebounded midafternoon with technology leading the way along with Bitcoin as most S&P sectors finished higher. Smallcaps have been hit hard as the Russell 2000 index hit over seven-week lows this morning before bouncing and turning positive late day. The Philadelphia Semi Index (SOX) fell as much as over -4% on the day and -7% for the week leading Tech lower (still up over 40% YTD with pullback) but also bounced late day.

Stocks pushed higher this afternoon on hopes Democrats and Republicans can iron out a deal to end the 38-day long government shutdown that is starting to really impact the economy. Late day, the U.S. Transportation Secretary Sean Duffy warned Friday the government could force airlines to cut up to 20% of flights if the shutdown did not end. The announcement came after the FAA mandated airlines on Friday cut 4% of flights at 40 major airports after the government because of a record-setting government shutdown before it rises to 10% by Nov. 14.

Prior to the afternoon rally, there was a definite sense of caution floating around the markets this week, with everything from AI valuation concerns, big corporations announcing large job cuts in recent weeks (AMZN, UPS, TGT, etc.) and its impact on spending, inflation prices holding around 3% (but not falling near Fed’s 2% target), the gov’t shutdown into day 38 (more below on that), the government shutdown preventing the Fed from seeing economic data (lessening chances of another rate cut in December), rich valuation in tech, and recent poor price action post earnings (despite a solid 82% EPS beat rate for Q3 with 445 S&P companies having reported). It could be one, some or all, but bottom line was, markets were overdue for a healthy pullback (7-straight months of gains) and the list of concerns above provided excuses to trim this week.

The S&P 500 (SPX) hit a low of 6,631.44 today, moving below its 50-day moving average for the first time during this bull market since trading above it on May 1 (current 50dma stands around 6,665 which we closed above). The Nasdaq 100 QQQ’s hit a low of $598.67 today, also below its 50dma of roughly 601.20 (also first time below 50dma since May and also closed above it). The CBOE Volatility index (VIX) hit a three-week high above 22 today before paring gains. Interesting times for tech given the recent pullback this week for the tech heavy Nasdaq and riding a streak of nine straight positive Mondays.

For weeks, market participants noted that stock markets in the past have risen during times of government shutdown and there was no cause for concern. Well with the shutdown hitting day 38 today, the longest on record, it’s starting to get real for Americans, airlines, spending etc. into the holiday season. Some notable impacts thus far from shutdown as per @shanaka86notes, 1) the FAA cutting about 700 flights per day across 40 airports, controller Gap ~3,500. Up to 10% of flights were at risk, 4M travelers already disrupted. Thanksgiving Air travelers ~5.8M. As many as 30% could be delayed or canceled If this persists. Snap payments delayed. Forty-two million Americans rely on roughly $250 per month. Equities pricing it in. S&P tracking about −3% on the week.

• Americans last month said that they expected moderating near-term inflation pressures as they continued to worry about the outlook for the job market and their personal finances, a report from the Federal Reserve Bank of New York said on Friday. In October, households said a year from now they expected inflation to come in at 3.2% from September’s 3.4% expectation, according to the bank’s latest Survey of Consumer Expectations. Three and five years from now households see inflation at 3% in both time frames.
• University of Michigan surveys of consumers sentiment prelim Nov 50.3 (below consensus 53.2) vs final Oct 53.6; current conditions index prelim Nov 52.3 (consensus 59.2) vs final Oct 58.6 and expectations index prelim Nov 49.0 (consensus 50.3) vs final Oct 50.3
• University of Michigan surveys of consumers 1-year inflation outlook prelim Nov 4.7% vs final Oct 4.6% while the consumers 5-year inflation outlook prelim Nov 3.6% vs final Oct 3.9%.

• December gold prices rose $18.80 or 0.46% to settle at $4,009.80 an ounce and finished the week with small gains despite the recent bounce in the dollar/Treasury yields. After a resurgent U.S. dollar in past weeks, the buck was down slightly today but little changed on the week. The euro rose 0.35% against the dollar to $1.15868. The dollar edged higher vs. the yen to 153.12, after hitting 152.82 earlier (Oct 30 low). The U.S. dollar started a five-day winning streak last week after U.S. Federal Reserve Chair Jerome Powell acknowledged the risky nature of further easing moves.
• U.S. Treasury yields were also flat on Friday, after falling the day before on economic uncertainty caused by the extended government shutdown in Washington. Treasury yields are down for the week as the shutdown keeps delaying the release of relevant data reports. Bitcoin rebounded after dropping below $100,000 for the second time this week, pushing back above $103,800 late day (but remain down from record highs above $126,000 few weeks back).

• FOXF shares tumble after Q3 EPS $0.23 misses the $0.55 estimate; Q3 revs rose 5% Y/y to $376.4M vs. est. $383M; guides Q4 EPS/revs below views and sees FY25 adjusted EPS $0.92-$1.12, below consensus $1.70 and guides FY25 revenue $1.445B-$1.475B, below consensus $1.48B.
• OUST was upgraded to Overweight at Cantor saying they continue to believe that OUST is best positioned (fundamentally) in the LiDAR industry, generating more revenue and better margins than its peers and has shipped >120K sensors to date, including 17,300 sensors shipped in FY24, and >7,200 shipped over Q3.

• In Restaurants: SG slides on results as Q3 missed expectations with adjusted EBITDA reverting into losses, as comps worsened sequentially on a one- and two-year basis for the third straight quarter with comps down 9.5% (-11.7% traffic/mix, 2.2% price) vs. expectations for a 6% to 7% decline; TXRH Q3 EPS fell slightly below consensus expectations as better than expected comp store sales growth (+5.4%) was offset by lower-than-expected store level margins due to food inflation; WEN reported better-than-feared results for Q3 lifting shares early; BLMN was upgraded from Sell to Neutral at Goldman Sachs following YTD underperformance (-47.4% vs S&P +10.6%) and given the increased visibility into the Outback turnaround.

• In Casino & Gaming: DKNG reported Q3 revenue of $1.114B, increasing 4% y/y which was 8% below consensus, and (-$126M) of EBITDA, missing estimate of around (-$102M). The company missed sports betting revenue expectations by 16% and Citizens estimate by 12%. WYNN mixed quarter as Q3 adj EPS $0.86 below consensus $1.10 on revs $1.83B vs. est. $1.75B. PENN was downgraded to Hold from Buy at Needham after the company announced the early termination of their partnership with DIS ESPN and new Interactive strategy focused on iGaming and omnichannel in the U.S. and maintaining their strategy with theScore in Canada. While Stifel upgraded PENN to Buy from Hold at Stifel saying sees room for Penn shares to "grind steadily" into the $20s as major overhang has been lifted.

• In Real Estate: OPEN shares tumbled after reporting Q3 results amid a change in strategy (are refounding Opendoor as a software and AI company) and unveiled planned stock offering. The company filed for a registered direct stock offering to repurchase its outstanding 7% convertible notes due 2030 and also announced a special dividend distribution of warrants to common stockholders as of 5:00 p.m. on Nov 18.
• In FinTech: AFRM posted an all-around beat in Q1, with strong profitability (4.23% RLTC) and GMV growth (42% Y/Y vs. 35% y/y) that was driven by its 0% Apr product, the Affirm Card, and its expanding PSP partnerships; mgmt also raised FY26 GMV and operating margin guidance for FY26. XYZ shares tumbled as Q3 gross profit rose 18% to $2.66B, slightly above estimates of $2.60B while adj operating income came in at $409M, missing consensus estimates of $473M and Ebitda +3% to $833M vs. est. $840M; increased its full-year GP growth outlook and adjusted Operating Income view.

• NTLA said the FDA has paused its two main late-stage trials for a gene-editing treatment after a patient died from severe liver complications. NTLA was downgraded to Underweight at JP Morgan and cut tgt to $5 from $12 after results saying they walked away from last night’s call with more questions than answers as the firm believes there are serious hurdles the company needs to address in the coming months.
• SNY and REGN said their jointly developed Dupixent anti-inflammatory drug achieved primary and secondary goals in a late-stage study for allergic fungal rhinosinusitis; said the FDA recently accepted for priority review a supplemental biologics license application for Dupixent in the condition.

• GMED shares jumped after results/guidance; was upgraded from Neutral to Buy at Bank America (tgt to $91 from $65) after the company posted records in revenue, EPS and cash flow in Q3, showed the ability to deliver profits and cash flow and ability for these profits to compound higher.
• TMCI shares tumble after results, was downgraded by a few analysts on Wall Street after revenue of $50.2M (+11%) came in slightly ahead of the Street and saw good volume growth, but shares fell on guidance as sees next quarter revs moving to $211-$213M, a decline from $224-$230M prior.
• TNDM shares jumped on results as Q3 sales of $249.3M (+2.2%), ahead of consensus $235.8M estimates as US revenue +2.3% year/year to $176M, OUS revs +1.8% Y/y to $73.6M and reiterated guidance.

• Rare Earth sector: Reuters reported China’s Ministry of Commerce has begun designing a new rare earth license system that would speed up shipments, but this will unlikely amount to the complete rollback of restrictions Washington had hoped for. In stock news, both shares of MP and USAR were movers on earnings. MP Q3 revenue of $53.6M beat consensus estimates of $53.2M with REO production volumes of 13,254MT vs. 13,145 in Q2. Adjusted EBITDA was ($12.6M) better than ($17.8M).
• In Chemicals: CE Q3 results came in ahead of expectations, while Q4 guidance of $0.93 was modestly below, but 2H EPS of ~$2.27 is largely tracking in line (consensus $2.22); CC shares decline on earnings miss as Q3 adj EPS $0.20 vs. est. $0.28 and adj net Income $30M vs. est. $43.2M while seeing Q4 consolidated net sales to decrease 10-15% sequentially; HUN headline Q3 EBITDA came in ahead of expectations ($94M vs $71M consensus),Q4 guidance is light while reduced its quarterly dividend by 65%.
• In Transports: The Federal Aviation Administration (FAA) said Friday it was seeing widespread air traffic control staffing issues and is delaying flights at six airports including in Atlanta, San Francisco, Washington, Newark. The FAA has staffing triggers at 10 locations across the country. The delays come as the agency has separately required airlines to cancel 4% at 40 high-volume airports to address air traffic control staffing. AAL noted 12,000 customers had flights canceled Friday under FAA required reductions.

• In Telecom: CCOI downgraded to Neutral from Buy at UBS saying while stills expect waves to grow in the coming years at high margins, scaling the product is taking longer and a competitive response from peers (LUMN, VZ, T lowering provisioning Times and/or expanding fiber/wave Networks) adds execution risk.
• In Optical: AAOI shares fell as delivered mixed Q3 results that were just shy of consensus REV/EPS by -1%/inline, and Q4 guidance was -8%/-$.11 below consensus. Q3 saw very strong Cable segment revenues 237% Y/y, +26% q/q), while Data Center (+7% Y/y, -2% q/q) was impacted by Logistics at newer customer.

• DDOG was upgraded to Overweight at Keybanc after earnings saying revenue ex. OpenAI accelerated, and the strength was broad based and visibility into sustained OpenAI spend for the next several quarters after renewing/expanding its commitment in Q3.
• FROG shares jumped after posting strong Q3 results, marking the biggest beat in company history, underpinned by Cloud growth of 50% Y/y and driven by growing adoption of Security and converting customers to higher annual commitments; saw acceleration of >$1M ARR customers, which grew 54% Y/y.
• RBLX shares outperformed in weak tech space after China article noted CEO calls Platform Social Hub reshaping Korea and global content landscape. He went on, “Another point to note is that these figures do not include China, and Roblox plans to enter the Chinese market next year
• TTWO reported mixed Q3 results on better guidance, but shares slipped initially after the video game maker again delayed the launch of "Grand Theft Auto VI", as now expects to release the game on November 19, 2026, from its previous launch date of May 26.

• MCHP reported in-line Q2 results and guided Q3 lower. Given the strong bookings trends and backlog viz, MCHP expects F4Q +MSD q/q and the following 2 quarters to be seasonally strong.
• MKSI posted upside results for 3Q and guided well above expectations for the December quarter. Strength was noted in Dep and Etch and robust demand was seen for Chemistry and Chemistry Equipment. Sequential improvements were noted in the Industrial segment.
• NVDA CEO Jensen Huang said there are no active talks or plans to sell Blackwell Ai chips to China, per Reuters. Despite speculation following Trump–Xi discussions, no deal has been reached, and Huang noted any change would depend on China’s policy shifts regarding Nvidia products.
• SNDK posted upside results for FQ126 and guided well above expectations for the December quarter as Datacenter sales grew 26% sequentially and are expected to sequentially increase in FY26. SanDisk expects the NAND market to be undersupplied through CY26.