Meta description: U.S. stocks were mixed after Friday’s opening bell as Broadcom and Oracle reignited AI “bubble” worries, while investors weighed Fed rate-cut debate, policy headlines, and a busy week ahead.
NEW YORK (Dec. 12, 2025) — U.S. stocks traded mixed shortly after the opening bell on Friday, with the Dow Jones Industrial Average edging higher while the S&P 500 and Nasdaq dipped as the market digested a fresh wave of scrutiny around artificial-intelligence spending and profitability. The early tone reflected a tug-of-war between still-bullish macro momentum following the Federal Reserve’s midweek rate cut and renewed concerns that parts of the AI-led rally may be pricing perfection. [1]
At the opening, the Dow rose about 0.2%, while the S&P 500 fell roughly 0.2% and the Nasdaq dropped about 0.4%, according to Reuters. [2]
What’s moving the market today: “AI payoff” anxiety returns
Friday’s early softness in tech-heavy benchmarks is being driven less by a broad economic shock than by a targeted repricing of the market’s most crowded trade: AI infrastructure.
Broadcom: strong demand, but margins become the headline
Broadcom’s latest results underscored a theme that investors have been increasingly sensitive to: revenue growth is not enough if profitability looks set to compress. Reuters reported Broadcom warned that rising sales of lower-margin custom AI processors could pressure profitability, adding to worries that the business mix may be less lucrative than the market assumed. [3]
Broadcom has also pointed to a $73 billion backlog it expects to ship over the next 18 months, reinforcing that demand remains robust even as investors question margins and timelines for returns. [4]
Oracle’s “capex shock” is still reverberating
Oracle’s sharp selloff Thursday continues to cast a long shadow. Reuters’ analysis highlighted that Oracle’s update reignited debate about debt-funded AI buildouts, after the company flagged a much larger-than-expected increase in capital expenditures tied to its AI ambitions. [5]
Importantly, that Reuters analysis also emphasized a key nuance: many investors view this as more company-specific than thesis-breaking for AI overall, while acknowledging the market is increasingly unwilling to reward spending with no clear payoff schedule. [6]
Investopedia framed the shift bluntly: investors are increasingly treating AI as a “show-me” story—seeking execution and cash-flow visibility, not just big narratives. [7]
The “AI bubble” debate is heating up — but the broader market is holding up
Despite the renewed jitters, the market’s behavior this week suggests something critical for bulls: leadership may be rotating rather than collapsing.
Reuters noted that even as some AI names stumbled, the broader market has remained resilient, raising hopes that the rally can broaden beyond mega-cap tech. [8]
That matters because tech’s dominance is enormous. Reuters reported that technology accounts for about 35% of the S&P 500’s weight—a concentration that makes any tech wobble feel like a market event, even if many other stocks are doing fine. [9]
Associated Press similarly described the early picture as mixed, with tech pressure weighing on the Nasdaq, while parts of the market outside tech looked steadier. [10]
Key stock movers after the bell
Here are the main names shaping Friday’s early narrative:
- Broadcom (AVGO): Down sharply premarket/early after margin commentary rekindled “AI payoff” worries. [11]
- Oracle (ORCL): Still a focal point for the market’s AI capex debate after Thursday’s plunge. [12]
- Nvidia (NVDA): Back in focus after Reuters reported Nvidia told Chinese clients it is evaluating adding capacity for its H200 chips amid strong demand, following President Trump’s decision to allow H200 exports to China with a 25% fee. [13]
- Lululemon (LULU): Jumped after news tied to a CEO transition and improved outlook, offering a reminder that not all price action is macro- or AI-driven. [14]
- Cannabis stocks (e.g., Tilray, Canopy Growth): Surged after Reuters reported the Washington Post said Trump is expected to push for easing federal marijuana restrictions, including reclassifying marijuana as a Schedule III drug—an outcome that could reshape taxes, financing access, and the regulatory burden for the sector. [15]
Fed cut tailwinds meet Fed dissent: why rates still matter
The Fed remains the second major engine of sentiment this week—right behind AI.
Reuters reported that Federal Reserve officials who dissented against the latest quarter-point rate cut cited concerns that inflation remains too high and that policymakers lack enough recent official data to judge price pressures, after the government shutdown disrupted data flow. [16]
According to Reuters, the Fed’s decision this week lowered the benchmark rate to 3.50%–3.75%, and the vote was 9–3, with dissents reflecting different concerns (inflation risk, desire for more data, and a push for an even larger cut). [17]
Why it matters for stocks: the market is trying to price an unusual combination of forces—
- Easier policy (supportive for valuations),
- A debate inside the Fed about whether inflation progress has stalled,
- And a near-term data fog because key reports were delayed.
This helps explain why investors are reacting so sharply to company-level proof points (like margins and capex) even as the headline index trend remains constructive.
Policy headlines in play: AI rules and marijuana regulation
Friday’s tape is also absorbing policy developments that could influence risk appetite and sector leadership into year-end.
AI regulation: a push toward one national framework
Reuters reported that White House adviser Sriram Krishnan said the administration plans to work with Congress on a single national framework for AI regulation, arguing companies should not have to contend with more than 1,000 state-level rules. [18]
A separate Reuters report described President Trump’s executive order approach more aggressively, including threats to withhold federal broadband funding from states whose AI laws are deemed obstructive, intensifying debate over federal vs. state authority and the pace of AI “guardrails.” [19]
The White House order itself describes creating an AI litigation task force within the Justice Department and other federal steps aimed at challenging state AI laws that conflict with federal policy. [20]
Market relevance: While this won’t move the S&P 500 minute-to-minute, it can affect long-run assumptions around compliance costs, liability risk, and innovation pace—especially for Big Tech and the AI software ecosystem.
Marijuana rescheduling speculation
Reuters’ cannabis report emphasized the potential significance of moving marijuana to Schedule III, which analysts say could open pathways for broader pharmaceutical approvals and reduce burdens that have hampered banking and institutional investment. [21]
Fund flows suggest investors are still leaning in
One of the most telling signals about “risk appetite” is whether money is actually moving into equities.
Reuters reported that U.S. investors bought equity funds for the first time in three weeks (week through Dec. 10), with notable inflows into sector funds—including metals/mining, industrials, and healthcare—and increased buying of bond funds as well. [22]
In other words: even with AI jitters, the flow data suggests investors aren’t fleeing—rather, they may be repositioning.
Global cross-currents: dollar softness, oil down, copper at a record
While the U.S. stock story is the headline for U.S. readers, global markets are feeding the same theme: “post-Fed optimism with selective caution.”
Reuters reported the dollar index hovered near 98.5 and was on track for a third weekly decline, while oil prices fell on supply concerns and copper hit a record high after China signaled a proactive fiscal stance. [23]
For U.S. equities, a softer dollar can support multinational earnings, while commodity strength can bolster cyclicals and materials—another ingredient in the “broadening rally” narrative.
After the closing bell: Nasdaq-100 reshuffle is the key scheduled catalyst
If you’re looking for a true “after the bell” headline on Dec. 12, it may not be earnings—it’s index mechanics.
Reuters reported Nasdaq’s announcement for its Nasdaq-100 index reshuffle is expected after Friday’s market close, with changes effective Dec. 22. [24]
Why investors care:
- Inclusion/removal can create forced buying or selling from passive funds tied to the Nasdaq-100.
- Even rumors can move affected stocks ahead of the announcement.
- Liquidity and positioning into year-end can amplify the impact.
Reuters also noted analysts have been flagging potential risks and candidate changes tied to the reshuffle. [25]
Separately, Reuters reported Nasdaq proposed a new rule that would give it more discretion to block IPOs it believes are vulnerable to manipulation, even if the companies meet listing standards—part of a broader effort to tighten gatekeeping after volatile small listings. [26]
Forecasts and outlooks published today: 2026 targets rise, but the warning labels get bigger
Even as today’s session focuses on AI margins and capex, strategists are increasingly publishing 2026 roadmaps—and they share a common theme: higher targets, but narrower margins for error.
- Goldman Sachs and the “Magnificent Seven” trade: Barron’s reported Goldman expects the “Magnificent Seven” to remain dominant in 2026 (with Broadcom included in that framing), while also expecting market leadership to broaden. Goldman’s reported 2026 S&P 500 target: 7,600, with projected S&P earnings around $305 per share. [27]
- Stifel’s base case vs. recession case: Business Insider reported Stifel’s Barry Bannister sees a potential ~9% risein 2026 in a steady-growth scenario, but warned a recession could trigger a swift 20% drop, citing stretched valuations and macro risk. [28]
How to interpret this on a day like today: The market can be bullish on the index level while still being brutal on individual stocks that fail the “proof of returns” test—exactly what we’re seeing in parts of the AI complex.
What to watch next week: jobs, inflation, and Fed messaging
Two near-term catalysts loom large, per Reuters:
- Major U.S. data releases next week, including the non-farm payrolls report and November CPI, both likely to be especially market-sensitive given recent data delays. [29]
- Fed speaker risk: Markets are primed to parse comments for any sign the central bank is worried about sticky inflation—or concerned about a faster slowdown. Reuters highlighted several policymakers scheduled to speak Friday, reinforcing how central the rate narrative remains. [30]
Bottom line
The U.S. stock market’s early action on Dec. 12, 2025 shows a market that is not abandoning risk, but repricing certainty—especially in AI names where capital intensity is colliding with investor demands for clearer returns. At the same time, supportive Fed policy, improving flows into equity funds, and signs of broader participation are keeping the overall tone constructive.
And after today’s closing bell, the Nasdaq-100 reshuffle could deliver the kind of index-driven volatility that matters as much as any earnings headline.
This article is for informational purposes only and does not constitute investment advice.
References
1. www.reuters.com, 2. www.reuters.com, 3. www.reuters.com, 4. www.reuters.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.investopedia.com, 8. www.reuters.com, 9. www.reuters.com, 10. apnews.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.reuters.com, 15. www.reuters.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.whitehouse.gov, 21. www.reuters.com, 22. www.reuters.com, 23. www.reuters.com, 24. www.reuters.com, 25. www.reuters.com, 26. www.reuters.com, 27. www.barrons.com, 28. www.businessinsider.com, 29. www.reuters.com, 30. www.reuters.com
