U.S. stocks were trading in a tight, volatile range late Tuesday morning as Wall Street digested a rare burst of catch-upeconomic data after the recent government shutdown—while investors also looked ahead to a small but potentially market-moving after-hours earnings slate led by homebuilder Lennar. [1]
By late morning in New York, the Dow Jones Industrial Average, S&P 500, and Nasdaq were hovering near flat after an early dip, with sector performance telling the story: healthcare and energy were among the biggest laggards, while parts of tech held up better. [2]
Why the market is wobbly today: a delayed jobs report with a mixed signal
The key catalyst on Dec. 16 is the delayed U.S. employment report, the first official labor-market snapshot since the shutdown disrupted the normal flow of government data.
- Nonfarm payrolls rose by 64,000 in November, beating expectations in a Reuters poll.
- Payrolls had fallen by 105,000 in October, a drop tied in part to an unusual wave of federal employee departures tied to deferred buyouts.
- The unemployment rate rose to 4.6%, reinforcing the view that the labor market is cooling—even if the headline job gain beat forecasts. [3]
That combination—“jobs up, unemployment up”—helped explain the market’s indecision. It can be read as good news(the economy is still adding jobs) and bad news (slack is growing), and it arrives at a moment when stocks are already sensitive to any shift in rate expectations.
Retail sales came in flat, reinforcing the “cooling, not collapsing” narrative
Adding to the mixed macro picture: a delayed retail sales report showed no change in October, missing expectations for a modest gain.
Reuters noted that the flat reading followed a downwardly revised September increase, and highlighted a widening gap in how different income groups are experiencing the economy—an uneven pattern often described as “K-shaped.” [4]
For markets, retail sales matter less as a single datapoint and more as a signal of whether consumer demand is slowing sharply (recession risk) or merely cooling (soft-landing vibes). Today’s “flat” number leaned toward the latter—moderation, not a cliff.
The Fed angle: rate-cut expectations ticked up, but January is still not a lock
Tuesday’s data didn’t just move stocks—it fed directly into how traders are pricing the next steps from the Federal Reserve.
Reuters reported that rate-futures markets briefly lifted the odds of a January cut after the jobs data, though the “pause” outcome still carried the larger probability. Markets continued to price two quarter-point cuts in 2026, with the first cut most likely seen around mid-year. [5]
Meanwhile, Reuters also flagged that investors are now pricing in more total easing next year than the Fed signaled last week, underscoring how quickly rate expectations can reprice when unemployment edges higher. [6]
Bond market watch: “risk premia” and Fed politics are creeping back into the story
The “after the bell” setup isn’t only about earnings—it’s also about whether rates calm down or re-accelerate into year-end.
A Reuters analysis pointed to the bond market “rebuilding” risk premia into 2026, with attention on the term premium(the extra compensation investors demand for holding longer-dated Treasuries). The piece also highlighted unease around the looming change at the top of the Fed as Powell’s term approaches its end, alongside other 2026 macro crosscurrents. [7]
In short: even if traders expect more rate cuts over time, investors are still demanding a clearer answer to the question, “What’s the long-run inflation and policy regime?”
Economic momentum check: business activity slows to a six-month low
One more macro datapoint hit Tuesday: S&P Global’s “flash” PMI survey showed U.S. business activity growth slowing to its weakest pace since June.
Reuters reported:
- The flash composite PMI slipped to 53.0 (still expansion, but slower).
- Services eased to 52.9 and manufacturing to 51.8, both weaker than economists expected.
- The report also flagged a jump in input-price pressures—an inflation reminder that could complicate the “easy cuts” narrative. [8]
This matters for the closing-bell trade because PMIs often influence rates, and rates still act like the market’s steering wheel for high-multiple growth stocks.
Sector pulse in late morning: energy and healthcare pressure, tech steadier
While the major indexes have been stuck near the flatline, the internals have been more dramatic.
Energy stocks were among the worst performers as oil slid. Investopedia noted that WTI crude fell sharply and the energy sector led S&P 500 decliners. [9]
Healthcare also weighed, with big headline risk in pharma and insurance:
- Pfizer issued 2026 guidance that trailed analysts’ expectations, citing a projected drop in COVID-product sales and revenue headwinds from drugs losing exclusivity. [10]
- Humana announced leadership changes in its insurance unit, tapping an Amazon healthcare executive while reaffirming its earnings outlook; shares fell on investor concerns about forward membership visibility, Reuters reported. [11]
Corporate headlines moving the tape today
Beyond macro data, several company-specific stories are shaping trading and could linger into after-hours:
Ford’s $19.5 billion EV writedown highlights a tougher EV market
Ford announced a $19.5 billion writedown tied to resetting its EV business—an acknowledgment, analysts told Reuters, that legacy automakers face tougher demand and a shifting regulatory backdrop. Reuters also pointed to the impact of policy changes, including the cancellation of consumer EV tax credits, and noted a sharp drop in U.S. EV sales in November. [12]
Tesla and the “driverless” narrative
Tesla has been sensitive to any autonomous-driving developments. Investopedia reported the stock had been boosted by comments from CEO Elon Musk about testing driverless cars in Austin. [13]
AI trade: bruised short-term, still central to long-term forecasts
Recent volatility in AI-linked names remains an undercurrent. Investopedia highlighted the ongoing pressure in names like Broadcom and Oracle after recent earnings disappointments. [14]
But the longer-term “street view” is still constructive: a Reuters outlook roundup said AI is expected to remain the centerpiece of 2026 investment strategies, with strategists warning that pullbacks may happen—but the broader bull case is still tied to AI capex and an easing path for monetary policy. [15]
After the bell today: the earnings that could move after-hours trading
With the market still digesting macro data, the after-hours spotlight shifts to earnings—especially anything that updates the market’s read on the consumer, housing, and industrial demand.
According to Benzinga’s earnings schedule for Dec. 16:
Reporting after the bell
- Lennar (LEN) — projected EPS: $2.20 on revenue: $9.13 billion
- Worthington Enterprises (WOR) — projected EPS: $0.71 on revenue: $307.04 million [16]
Reporting before the bell (already in the tape)
- Duluth Holdings (DLTH)
- CSP (CSPI)
- Organigram Global (OGI) [17]
Why Lennar matters more than usual
Even when Lennar isn’t a mega-cap, its results often ripple across:
- Homebuilders and housing-linked cyclicals
- Mortgage/consumer sentiment narratives
- Broader “soft landing vs. hard landing” debates, because housing is typically rate-sensitive
In a market where investors are already parsing whether unemployment drifting higher means “cut faster,” anything Lennar says about demand, cancellations, incentives, and pricing power can become a late-day driver.
What to listen for in Worthington
Worthington can serve as a read-through for:
- Industrial activity and manufacturing-linked demand
- Input costs (and whether pricing pressure is easing)
- Customer behavior heading into 2026 amid tariff and rate uncertainty
Forecasts and strategist calls circulating today: AI optimism meets valuation and tariff risk
Markets are forward-looking—especially in December, when positioning and outlook narratives can matter as much as the latest datapoint.
A Reuters poll of broker forecasts expects the S&P 500 to climb nearly 12% to 7,490 by end-2026, which would extend the index’s multiyear winning streak if 2025 closes higher. The same Reuters roundup emphasized that strategists still see risks: inflation surprises, high valuations, and tariff tensions that could trigger corrections even if the core bull case stays intact. [18]
Meanwhile, an Axios analysis highlighted the growing tension between record or near-record stock prices and widespread affordability concerns—warning that if the market’s wealth effect weakens, it could hit consumer spending more than in past cycles, especially given how concentrated spending has become among higher-income households. [19]
What to watch from now through the close — and into after-hours
With the market “data-rich” and headline-driven today, traders will likely keep one eye on macro and another on earnings.
Key items that could shape the closing-bell tone and after-hours follow-through:
- Treasury yields and the curve — whether rates drift lower (supporting growth stocks) or rebound (pressuring valuations). [20]
- Oil’s slide — continued weakness can keep pressure on energy and inflation expectations. [21]
- Any new read-throughs on consumer health — retail sales were flat; investors are watching whether higher-income spending can keep carrying demand. [22]
- After-hours earnings: Lennar and Worthington — guidance and commentary may matter more than the headline EPS beats/misses. [23]
- The “2026 regime” narrative — from Fed path to policy uncertainty, risk premia are becoming part of the conversation again. [24]
Bottom line: a quiet index day, but not a quiet market
As of late morning on Dec. 16, Wall Street’s major indexes were stuck in a near-flat tug-of-war—but the reasons behind the churn were significant: delayed jobs and spending data, a slowing PMI survey, shifting rate-cut odds, and company headlines spanning EV strategy resets, healthcare guidance, and AI’s next chapter. [25]
The “after the bell” focus now becomes whether Lennar validates (or challenges) the market’s softer-growth narrative—and whether after-hours trading reinforces the day’s cautious positioning or sets up a different tone for Wednesday. [26]
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.reuters.com, 8. www.reuters.com, 9. www.investopedia.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.investopedia.com, 14. www.investopedia.com, 15. www.reuters.com, 16. www.benzinga.com, 17. www.benzinga.com, 18. www.reuters.com, 19. www.axios.com, 20. www.reuters.com, 21. www.investopedia.com, 22. www.reuters.com, 23. www.benzinga.com, 24. www.reuters.com, 25. www.reuters.com, 26. www.benzinga.com
