Markets Flatten on Waning Rate Cut Exuberance

Thursday, December 4, 2025

Market indexes were mostly flat on this trading day, with only the Dow staying in the red as of the closing bell. The small-cap Russell 2000 outperformed the group for almost the entire session, and has been since bouncing off its late Tuesday lows, +0.76% today. The Dow was -0.07%, the S&P 500 +0.11% and the Nasdaq +0.22% today.

We appear to still be wallowing in some of that good feeling regarding next week’s interest rate cut, which will bring us down to between 3.50-3.75% for the first time since September 2022. This morning’s much-better-than-expected Weekly Jobless Claims did not instill a pause among investors that the ongoing employment market was somehow stronger than all other labor force data, which would thus bring a re-think to the Fed ahead of next week’s decision.
 

Earnings Reports After the Close: ULTA, DOCU & HPE

We’re also still mopping up the end of calendar Q3 earnings season this week. This afternoon it’s another three companies of decent consequence having reported — all which have outperformed estimates, at least on the earnings side:

Ulta Beauty ULTA shares are up +5% in late trading on solid beats on both top and bottom lines after the closing bell. Earnings of $5.14 per share were well ahead of the $4.56 in the Zacks consensus, Revenues of $2.9 billion bettered the $2.72 billion analysts had been expecting, for year-over-year growth of +12.9%. Comps rose to +6.3% for the quarter, and the company raised guidance rather substantially for the full fiscal year.

DocuSign DOCU also outpaced estimates for both earnings and sales in its Q3 report today. Earnings of $1.01 per share easily surpassed the $0.92 expected, on $818.4 million in revenues, above the $806.1 million in the Zacks consensus. Free cash flow is way up year over year, and the company increased revenue guidance for next quarter. Still, the stock trades down, as it remains under threat by OpenAI’s DocuGPT system launched earlier this fall.

Hewlett Packard Enterprises HPE posted mixed results in its fiscal Q4 report after today’s close, with earnings of 62 cents per share outpacing estimates by 3 cents but revenues of $9.7 billion were notably short of the $9.96 billion expected. Forward guidance has been lowered for next quarter as well, helping shares down -7.6% in late trading.
 

What to Expect from the Stock Market Friday

Ahead of tomorrow’s open, we’ll get the delayed Personal Consumption Expenditures (PCE) report from September. Because this data pulls from so many other economic surveys, we tend to not see big surprises or revisions to previous months. Headline year-over-year PCE is expected to come in at +2.8%, a tick up from +2.74% the prior month. Core PCE year over year is anticipated to bring +2.9%, in line with August’s 2.905%. 

Should we see some sort of surprise to the upside — say, a “3-handle” on headline, core or both — that could be the last bastion of data for the Fed to resist making a move on interest rates next Wednesday. But like we say, that’s not typical of PCE numbers to jump out of whack like that. Even still, we’re a few cry from the +2.6% we were seeing in April of this year, so expect the Fed to proceed with caution going forward.

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