At the closing bell on Wednesday, December 3, 2025, the US stock market delivered a mixed finish as investors digested a shockingly weak private‑sector jobs report and fresh worries about big‑tech AI spending.
- Dow Jones Industrial Average: 47,576.64 (+0.22%) [1]
- S&P 500: 6,830.21 (+0.01%, essentially flat) [2]
- Nasdaq Composite: 23,321.15 (‑0.40%) [3]
The S&P 500 remains less than 1% from its late‑October record high, even as Wall Street wrestles with evidence of a cooling labor market and questions about just how profitable the AI boom will really be. [4]
After the Bell: A Market Caught Between Growth Worries and Rate‑Cut Hopes
Despite the red on the Nasdaq screen, Wednesday’s session was more “pause” than panic.
- The Dow climbed for a second straight day, extending Tuesday’s tech‑ and industrial‑led rally that saw all three major indexes finish firmly in the green. [5]
- The S&P 500 finished almost unchanged, edging higher by just under one point as gains in financials, cyclicals and select chip names offset weakness in mega‑cap tech. [6]
- The Nasdaq took the brunt of the selling as investors trimmed positions in richly valued AI and software leaders following downbeat headlines on AI demand. [7]
Volatility stayed subdued: the Cboe VIX hovered in the mid‑16s, only slightly above recent lows, signaling that options markets still see any pullbacks as contained—for now. [8]
Jobs Shock: ADP Report Shows Surprise Private‑Sector Job Loss
The day’s biggest macro story hit before the opening bell and set the tone:
- Payroll processor ADP reported that US private‑sector employment fell by 32,000 jobs in November, versus economists’ expectations for a gain of around 40,000. [9]
- Small businesses bore much of the pain, amplifying worries that higher borrowing costs and tariff‑related pressures are biting harder at the fringes of the economy. [10]
Markets know ADP has a shaky track record predicting the official nonfarm payrolls report, but the miss landed at a sensitive moment, just days before:
- Friday’s government jobs report, and
- Next week’s Federal Reserve meeting, where investors are almost unanimously betting on another quarter‑point rate cut.
Futures market pricing tracked by CME’s FedWatch tool shows roughly an 89% probability of a 25‑basis‑point cut at the December meeting, up sharply from about two‑thirds a month ago. [11]
Bond market reaction:
- The 10‑year Treasury yield slipped to around 4.06%–4.07% from about 4.09% on Tuesday, extending a recent downtrend in yields. [12]
- The US dollar index weakened to just under 99, reflecting growing conviction that the Fed’s easing cycle is real and will likely continue into 2026. [13]
Lower yields helped cushion the broader market, but the message from ADP was clear: growth is slowing, and that makes stock selection more important than simply “buying the dip.”
AI Hangover: Tech and Microsoft Pull the Nasdaq Lower
The Nasdaq’s 0.4% decline was driven largely by renewed questions about the near‑term payoff from massive AI investments. [14]
A key headline:
- Microsoft fell about 2.5%–3% after a report from The Information said the company is cutting sales growth targets and quotas for some AI software products as customers push back on pricing and adoption pace. [15]
That hit investor sentiment because Microsoft has been one of the “can’t‑miss” winners of the AI wave. Pressure on Microsoft rippled into the rest of the “Magnificent Seven”:
- Nvidia slipped roughly 1%,
- Some other mega‑cap names traded mixed to slightly lower,
even as Apple and Alphabet managed small gains intraday. [16]
Trading desks and strategists framed Wednesday’s tech selling as less about fundamentals and more about positioning:
- After a six‑gains‑in‑seven‑sessions run for the major indexes, investors were quick to lock in profits in high‑flying AI names. [17]
- Bloomberg’s global markets wrap highlighted “doubts over whether the billions spent on AI will pay off as quickly as hoped” as a key pressure point on tech shares worldwide. [18]
In other words: the AI story is intact, but expectations were so high that even modest negative headlines now trigger outsized reactions.
Earnings Movers: Marvell, American Eagle, Macy’s and a 300% Biotech Spike
Beyond macro, stock‑specific stories drove some big moves under the surface.
Winners
- Marvell Technology (MRVL)
- Jumped about 6%–7% after beating profit forecasts and announcing a $3.25 billion acquisition of Celestial AI, aimed at boosting its data‑center and AI‑infrastructure offerings. [19]
- The move reinforced the market’s appetite for “picks and shovels” plays supplying AI infrastructure, even as front‑end software names came under scrutiny.
- American Eagle Outfitters (AEO)
- Surged around 15% on better‑than‑expected earnings.
- Management cited a strong start to the holiday shopping season and successful marketing tie‑ins with celebrities like Sydney Sweeney and Travis Kelce. [20]
- Capricor Therapeutics
- Exploded more than 300% after promising study results for a potential treatment for Duchenne muscular dystrophy, one of the day’s most dramatic biotech moves. [21]
Laggards
- CrowdStrike slid despite beating profit expectations, a classic case of a stock priced for perfection after strong year‑to‑date gains. [22]
- Macy’s fluctuated between gains and losses even after posting a far better‑than‑expected profit, with the stock struggling under the weight of high expectations following a big rally earlier in the year. [23]
On the sector level, chipmakers and AI‑infrastructure names such as Microchip, Marvell and other semiconductorspopulated the S&P 500’s top‑gainers list, while streaming, cloud and some consumer‑tech names bore the brunt of the decline. [24]
Crypto, Gold and Oil: Risk Assets Rotate
Away from stocks, cross‑asset price action underscored how sensitive markets have become to the Fed and growth data:
- Bitcoin rebounded again to trade above $92,000–$93,000, continuing a sharp recovery from Monday’s plunge below $85,500—its worst day in dollar terms since 2021. [25]
- Gold futures climbed toward $4,250 per ounce, benefiting from lower real yields and persistent geopolitical uncertainty. [26]
- WTI crude oil traded close to $59 per barrel, up around 1%, as supply worries and lingering Middle East tensions offset concerns about slower global growth. [27]
Taken together, that mix—rising gold, firm Bitcoin, lower yields and a weaker dollar—paints a picture of investors hedging macro risks while still leaning cautiously into risk assets.
Tariffs, Politics and the Road to 2026: Fresh Forecasts Hit the Tape
Wednesday’s trade unfolded against a unique 2025 backdrop: a year dominated by revived US tariffs and political uncertainty.
- Analysts continued to parse the economic impact of President Trump’s sweeping global tariffs, which have contributed to supply disruptions, higher import costs and several bouts of equity‑market turbulence earlier in the year. [28]
On the forecast front, several notable calls have been circulating and were referenced in research and commentary on December 3:
- A major Wall Street bank published a new S&P 500 target for 2026, a call described by TheStreet as adding “fresh intrigue” to the market’s outlook, underscoring how divided strategists remain on whether current valuations are sustainable. [29]
- Veteran strategist Ed Yardeni has reiterated his bold long‑term view that gold could reach $10,000 and the S&P 500 10,000 by 2029, implying substantial upside for both real assets and equities over the next four years despite near‑term volatility. [30]
At the stock level, research notes highlighted that many defensive growth names, such as utilities and select infrastructure plays like NextEra Energy, still trade at rich but not extreme valuations, with some analysts pointing to 6–8% long‑term earnings growth as a justification for premiums in an AI‑ and data‑center‑hungry world. [31]
What Investors Are Watching Next
With Wednesday’s mixed session in the books, attention now turns to a packed macro and earnings calendar:
- Official US jobs report (Friday)
- After ADP’s surprise job loss, the market will be laser‑focused on whether the Bureau of Labor Statistics confirms a significant slowdown or reveals a milder print. A weak number could cement expectations of multiple rate cuts in 2026—but also stoke recession fears.
- Fed meeting next week
- Futures pricing implies a nearly 90% chance of a 25‑basis‑point cut, but guidance for 2026—the “dot plot” and Powell’s tone—will likely matter more than the move itself. [32]
- Earnings after the bell and later this week
- Salesforce is slated to report after Wednesday’s close, with the stock under the microscope as a bellwether for corporate software and AI‑adjacent spending. [33]
- Retail and consumer‑oriented names remain in focus as Wall Street tries to gauge the strength of the holiday season against a backdrop of higher prices and tariffs.
- Inflation data
- The Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, due later this week, could either reinforce or challenge the “rate‑cut soon” narrative that has powered stocks back toward record highs. [34]
Key Takeaways from December 3, 2025
For traders and longer‑term investors, today’s tape sends a few clear signals:
- The bull trend is intact but fragile. The Dow and S&P 500 hovering near records while the Nasdaq dips shows investors rotating within risk assets rather than abandoning them. [35]
- Macro data can now cut both ways. Bad news on jobs is increasingly seen as good news for rates—but only up to the point where growth fears overwhelm the rate‑cut narrative. Wednesday came uncomfortably close to that line. [36]
- AI is entering the “prove it” phase. After a year of breathtaking gains, AI leaders like Microsoft and Nvidia are being asked not just to grow—but to justify the scale and timing of their AI spending. Headlines about sales quotas and customer pushback matter more in this environment. [37]
- Stock picking is back. Double‑digit surges in Marvell, American Eagle and Capricor alongside drops in CrowdStrike and some megacaps illustrate that idiosyncratic earnings and pipeline news are finally competing with macro for attention. [38]
For now, Wall Street is drifting near all‑time highs with one eye on the data and the other on the Fed—a tricky balance that makes the next few days of economic releases and earnings especially critical for the US stock market’s end‑of‑year path.
References
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