Holiday Week Brings Volatility 22/12/2025

HOT stories for today

Market wrap:

• Wall Street closed out a choppy week with uneven results across major benchmarks. A late rally in technology shares pushed the S&P 500 and Nasdaq Composite to their third gain in four weeks, edging up 0.1% and 0.5%, respectively. The Dow Jones Industrial Average, which has led gains this month, slid 0.7%, snapping a three-week winning streak. Artificial-intelligence stocks rebounded after a period of underperformance. Oracle shares surged following an agreement for TikTok to sell its U.S. operations to a new joint venture that includes the software maker and private-equity firm Silver Lake. Nvidia also staged a recovery. 
• The durability of AI’s market leadership remains in question as investors rotate toward cheaper segments amid concerns about elevated tech valuations. Skepticism is also growing about the prospects for a traditional Santa Claus rally, as the S&P 500 struggles to hold a key technical level. In Asia, markets traded higher as investors weighed China’s key lending-rate decision. Gold and silver climbed to record highs. Trading volumes are expected to thin in the holiday-shortened week, with the New York Stock Exchange closing early at 1 p.m. ET on Wednesday for Christmas Eve and remaining shut on Thursday for Christmas Day.

Broader Rally, Tech Still Key

• A broadening of gains across US equities is an encouraging signal heading into 2026, though the S&P 500 may struggle to generate sustained upside without renewed participation from technology shares. Despite a recent pause, tech has remained the primary driver of returns in 2025, keeping debate alive over whether the artificial-intelligence rally is overheating. The current backdrop differs from prior speculative episodes, with periodic pullbacks and rotation suggesting a more cautious market tone. Expectations for continued earnings growth are helping support equities even as valuations remain elevated, pointing to a market that is expensive but still underpinned by fundamentals. Sector performance is increasingly tied to macro and policy dynamics. Utilities stand to benefit from rising electricity demand linked to AI-related infrastructure. At the same time, financials and industrials are positioned to gain from firmer economic growth, increased infrastructure spending, and higher defense outlays.
• A steepening yield curve could further bolster bank profitability as the Federal Reserve continues to ease monetary policy. With the bull market now more than three years old, investors are placing greater emphasis on diversification, including global exposure and multi-asset strategies, as a way to reduce concentration risk and improve portfolio resilience. Optimism around the long-term trajectory of AI investment remains intact, even as volatility persists.

Stocks on the move:

• Carnival Corp. (CCL): Shares jumped about 8% after the cruise operator pointed to record booking volumes for 2026 and 2027 sailings. Adjusted fourth-quarter earnings came in at 34 cents a share, topping the LSEG consensus estimate of 25 cents.
• Oracle (ORCL): The stock rose more than 7% after TikTok agreed to sell its U.S. operations to a new joint venture that includes the software maker alongside private-equity firm Silver Lake.
• Micron Technology (MU): Shares climbed 6%, extending gains from the prior session after the memory-chip maker issued strong fiscal first-quarter results and upbeat guidance, citing robust demand for AI-related memory.
• CoreWeave (CRWV): The stock surged 20% after the cloud infrastructure firm joined the US Department of Energy’s Genesis Mission aimed at advancing domestic research and innovation. Separately, Citi resumed coverage with a price target implying the shares could roughly double from current levels.

Watchlist: CCL, ORCL, AVGO, NVDA, COIN, LLY, RDDT, NFLX

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The TEFS Analyst team wishes you a successful day!