Market tests highs

The US stock market’s late-November rebound spilled over into early December as tech sector volatility continued to ease and traders and investors gauged the likelihood of a Fed rate cut this week.

A “seasonally appropriate” Monday downturn was followed by four days of modest gains for the S&P 500 (SPX) as the week’s economic data mostly appeared to support the case for lower interest rates:

The headline: Stocks climb—cautiously—ahead of Fed meeting.

The fine print: Last week’s labor market data was mixed— job cuts declined and jobless claims were lower than expected, but the ADP private payrolls report posted a month-over-month decline. The latter report appeared to confirm impressions of continued labor market softness, and along with Friday’s sticky-but-not-hot inflation reading from the PCE Price Index, kept the odds of a 0.25% rate cut on Friday hovering a little below 90%.¹

The number: 9, the number of times the Cboe Volatility Index (VIX) closed lower in the past 10 trading days. The VIX ended last week at its lowest level since September 26.

The scorecard: The Nasdaq 100 (NDX) tech index led the market last week:

Sector returns: The strongest S&P 500 sectors last week were tech (+1.4%), energy (+1.4%), and communication services (+0.8%). The weakest sectors were utilities (-4.6%), health care (-2.7%), and materials (-1.5%).

Stock moves: Capricor Therapeutics (CAPR) +371% to $29.96 on Wednesday, Praxis Precision Medicines (PRAX) +30.54% to $247.99 on Friday. Janux Therapeutics (JANX) -53% to $15.86 on Tuesday, Genesco (GCO) -31% to $24.38 on Thursday.

Yields and the dollar: The 10-year US Treasury yield climbed 0.13% to 4.14% last week. The US Dollar Index (DXY) fell 0.47 to 98.99.

Futures: February gold (GCG5) ended a mostly sideways week down $11.90 at $4,243. January WTI crude oil (CLF6) rallied $1.53 to $60.08. Biggest rallies: January natural gas (NGF6) +9.3%, January whey (DYF6) +8.1%. Biggest declines: January orange juice (OJF6) -6.6%, December VIX (VXZ5) -5.3%.

The Fed’s interest rate decision highlights the economic calendar:

●Monday: New York Fed Consumer Inflation Expectations
●Tuesday: NFIB Business Optimism Index, Job Openings and Labor Turnover Survey (JOLTS)
●Wednesday: Employment Cost Index, Fed interest rate decision
●Thursday: Producer Price Index (PPI)

This week’s earnings include a healthy dose of tech, retail, and consumer names:

●Monday: G-III Apparel (GIII), Ollie's Bargain Outlet (OLLI), Oracle (ORCL), Dave & Buster's (PLAY), Toll Brothers (TOL)
●Tuesday: AeroVironment (AVAV), AutoZone (AZO), Casey’s General Stores (CASY), Cracker Barrel Old Country Store (CBRL), Campbell's (CPB), Designer Brands (DBI), Rev Group (REVG)
●Wednesday: Adobe (ADBE), RH (RH)
●Thursday: Broadcom (AVGO), Ciena Corp (CIEN), Costco (COST), Lululemon (LULU)

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

Concerns about the viability of the AI trade contributed to the stock market’s November, culminating, at least temporarily, in NVIDIA’s (NVDA) post-earnings sell-off. Interestingly, increased NVDA sales volumes have led Morgan Stanley & Co. analysts to up their estimate for the energy required to power an AI-driven world. They now expect the cumulative 2025-2028 shortfall to expand from 44 to 47 gigawatts.

Given that backdrop, the strategists believe investors will shift focus next year to companies that can alleviate "intelligence bottlenecks" (e.g., power, political support, labor, data center equipment). One of the more interesting ideas in their report is the role bitcoin miners could play in addressing the AI energy demand shortfall.²

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¹ CMEGroup.com. FedWatch. 12/5/25.
² MorganStanley.com. Turning Up the GPU Dial, and Assessing the "Intelligence Bottlenecks." 12/1/25.