U.S. stocks finished last week mixed: the Dow eked out gains while the S&P 500 and Nasdaq pulled back, driven largely by profit‑taking and a rotation out of big tech into cyclicals, financials, and materials.
The S&P 500 slipped about 0.5%–0.6% for the week, while the Nasdaq fell roughly 1.6%–1.9%, reflecting pressure on large-cap tech and AI names.
The Dow bucked the trend, gaining around 1.0%–1.2% as investors favored more cyclical and defensive blue chips.
Tech and communication services were the weakest groups, down around 2%–3% on the week as several marquee AI and semiconductor names sold off on margin and demand concerns.
Materials, financials, and industrials outperformed, with materials up about 2%–3% and financials up over 2%, while small caps modestly beat large caps as the market rotated toward more rate‑sensitive and value/cyclical areas.
AI “bubble chatter” is really starting to take a toll on chips, data, and big AI companies. Enough people are barking about it, and it’s putting extreme pressure on many of these stocks.
Earlier in the week, Bitcoin and Ethereum looked like they were trying to come out of their funk, but faded to black again towards the end of the week.
U.S. stocks face heightened volatility this week as delayed November jobs, October retail sales, and November CPI data are set to hit in the final full trading stretch of 2025, following last week’s Fed rate cut and the S&P 500’s pullback from record highs.
The primary catalyst for this volatility is the unusual clustering of delayed data: November payrolls, October retail sales, PMIs, and November CPI are all landing in a compressed window, so the market has to reprice growth and inflation expectations almost in real time. That follows a December Fed rate cut tied explicitly to a softer labor market, which makes every upside or downside surprise in the jobs data far more market-sensitive than usual.
These next two weeks are when the bulls are supposed to step up and play ball, but so far, it really doesn’t feel like they are motivated. Santa doesn’t feel like he’s in the room with us right now; that, of course, can change on a dime.
Busy, busy week.
Events This Week: 1. October Retail Sales data – Tuesday 2. November Jobs Report – Tuesday, 3. November CPI Inflation data – Thursday 4. December Philly Fed Manufacturing Index – Thursday 5. October PCE Inflation data – Friday 6. November Existing Home Sales data – Friday 7. MI Inflation Expectations data – Friday 8. MI Consumer Sentiment data – Friday 9. Total of 5 Fed speaker events A massive backlog of economic data is coming this week
It could be a tricky week unless bullish seasonality does indeed take over.
See you in the morning.