Stock market’s sell-off, foreclosures jump, new IRS guidelines and more in Morning Squawk

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Here are five key things investors need to know to start the trading day:

Yesterday was a rough day for the stock market. The three major indexes all notched their biggest one-day losses in more than a month as the artificial intelligence trade once again sputtered. Economic policy concerns also overshadowed investors’ excitement around the federal government reopening.

Here’s the breakdown:

• The Nasdaq Composite dropped around 2.3%, while the Dow Jones Industrial Average and S&P 500 each lost more than 1.6%. Losses extended to small cap stocks, with the Russell 2000 dropping 2.8%.
• Disney dragged the Dow off its all-time highs. Shares of the media giant tumbled more than 7% after it reported weaker-than-expected quarterly revenue. The stock took another leg down in premarket trading today.
• Technology stocks continued to falter, leading the Nasdaq Composite to notch its third-straight losing session. It’s the only major index on track to end the week in the red.
• Speaking of tech, Oracle is set to log its worst week of 2025 as Wall Street loses confidence in the company’s AI buildout plans. The stock is on pace for its worst quarter since 2002.
• Traders also no longer see an interest rate cut as a safe bet at the Federal Reserve’s December policy meeting — the last one of 2025. Fed funds futures are now pricing in less than a 50% likelihood of a cut, down from more than 94% a month ago.
• Stock futures are lower this morning, signaling the market could be in for another tough session. Follow live markets updates here.

Higher-income shoppers are looking for deals, and younger consumers are tightening their purse strings, according to recent earnings reports from consumer companies.

There are some notable exceptions — such as Coach and Swiss shoemaker On, which saw growth across all consumer segments — but shoppers’ pullback could portend a rocky holiday retail period ahead. Investors will get more insight from next week’s earnings reports, which include some of the biggest retailers: Walmart, Target, Gap and Home Depot.

Another economic warning sign: Data released yesterday showed new foreclosure starts in October jumped 20% from a year ago. As CNBC’s Diana Olick notes, the uptick could signal cracks in a housing market that has been notoriously tight coming out of the pandemic.

Boeing defense workers voted to approve a new contract yesterday, ending the union’s first strike since 1996. The stoppage, which lasted more than a three months, delayed production of Boeing’s F-15 fighter jets.

The agreement includes increased up-front bonuses and 24% wage increases over five years. Employees rejected previous proposals that the union said didn’t address their concerns.

We’re also keeping an eye on the Starbucks barista strike that began yesterday in dozens of cities. The protest coincided with Red Cup Day, which has historically been a major sales event for the coffee chain.

At CNBC’s Delivering Alpha conference last night, attendees got expert examinations of today’s market.

Mary Callahan Erdoes, CEO at JPMorgan Asset and Wealth Management, said AI should be viewed as an opportunity rather than a potential crisis. In fact, Erdoes called the idea of an AI bubble a “crazy concept.”

Coatue Management founder Philippe Laffont, meanwhile, had a less optimistic take for the initial public offering market, calling it “completely broken” and “beyond repair.” He noted that there are “very few” IPOs compared with prior decades.

It’s been a busy week. Here are our recommendations for the weekend:

— CNBC’s Sean Conlon, Lillian Rizzo, Jeff Cox, Seema Mody, Gabrielle Fonrouge, Melissa Repko, Amelia Lucas, Diana Olick, Leslie Josephs, Kate Rogers, Kate Dore, Jessica Dickler and Yun Li contributed to this report. Josephine Rozzelle edited this edition.