Stock Market Today: Dow Jones, S&P 500 and Nasdaq Eye Rebound as Fed Rate Cut and Nvidia China Deal Drive Wall Street

US stock futures are pointing to a cautiously higher open on Tuesday, December 9, 2025, as Wall Street digests a modest pullback from record territory and looks ahead to a pivotal Federal Reserve meeting and a major policy shift on AI chips. After the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all slipped on Monday, they remained just below all‑time highs, setting the stage for a key “Fed week” that could define the year’s final stretch. ^[1]

Investors are overwhelmingly expecting the Fed to deliver a quarter‑point rate cut on Wednesday — the third cut this year — but markets are far less certain about how aggressively policymakers will ease in 2026. Futures and economist surveys put the odds of a 25‑basis‑point move at roughly 85–90%, with the target range for the federal funds rate seen dropping to 3.50%–3.75%. ^[2]

At the same time, Washington’s decision to allow Nvidia to sell its powerful H200 AI chips to “approved” customers in China — in exchange for a 25% fee on those exports — has injected fresh momentum into the technology trade and lifted tech futures ahead of the US open. ^[3]

Below is a detailed look at how US markets are positioned today, what’s driving sentiment, and what strategists are forecasting for 2026.

Wall Street Recap: Monday’s Pullback From Record Levels

On Monday, December 8, the major US stock indexes finally exhaled after a strong multi‑week run:

S&P 500 fell 23.89 points, about 0.35% , to 6,846.51 .
Dow Jones Industrial Average lost 0.45% to 47,739.32 .
Nasdaq Composite slipped 0.14% to 23,545.90 . ^[4]

Despite the dip, the S&P 500 remains up roughly 16% year‑to‑date and sits less than 1% below its record high set in late October, underscoring how modest Monday’s pullback was in the context of a powerful 2025 rally. ^[5]

Under the surface, the move was very much “risk‑off”:

Technology was the only S&P 500 sector to finish higher, gaining about 0.9% .
Communication services was the biggest laggard, dropping roughly 1.8% .
Most of the index’s 11 sectors closed in the red as rising Treasury yields and pre-Fed nervousness weighed on equities. ^[6]

US 10‑year Treasury yields climbed to around 4.19% , their highest level since late September, partly in response to a major earthquake in Japan that pushed investors toward safe‑haven assets and raised questions about the Bank of Japan’s next move. Higher yields added to pressure on US stocks. ^[7]

Tuesday, December 9: Futures Edge Higher Ahead of the Fed

Heading into today’s session, futures suggest Wall Street will try to claw back some of Monday’s losses:

S&P 500 futures were up roughly 0.1% in early trading, after the index halted a four-day rally on Monday. ^[8]
Dow and Nasdaq futures were also modestly higher, with investors eyeing both Wednesday’s Fed decision and NVIDIA‑led strength in tech. ^[9]

Overnight, Asian shares mostly fell , tracking Wall Street’s pullback from record highs, while US futures “edged higher” as traders positioned for the Fed. ^[10]

European stocks were similarly muted on Tuesday, with the region’s broad Stoxx 600 little changed as investors waited for the Fed’s verdict and monitored a softening in oil prices. ^[11]

Fed Focus: Markets Price a “Hawkish Cut”

The Federal Open Market Committee (FOMC) begins its two-day meeting today, with a policy statement and press conference scheduled for Wednesday afternoon (2:00 pm and 2:30 pm ET, respectively). ^[12]

Key points on Fed expectations:

A Reuters poll of more than 100 economists shows a strong majority expecting a 25‑basis‑point cut at the December 9–10 meeting to support a cooling labor market. ^[13]
Futures tracked by the CME FedWatch Tool put the probability of that moving in the 87–90% range. ^[14]
The Fed is expected to lower the fed‑funds target from 3.75%–4.00% to 3.50%–3.75% , marking the third consecutive cut this year. ^[15]

What’s less clear — and what markets care about most — is the path for 2026 :

Reuters reporting and strategist commentary suggest investors are bracing for a “hawkish cut” : a rate reduction coupled with guidance that future easing will be limited unless the economy slows more sharply. ^[16]
Poll medians point to two additional cuts by the end of 2026 , but there is no clear consensus on timing, and FOMC members appear unusually split. ^[17]
Analysts also highlight the risk of multiple dissents at this week’s meeting — something the Fed has not seen since 2019 — underscoring internal divisions over how aggressively to respond to sticky inflation and mixed growth data. ^[18]

As BMO Private Wealth’s Carol Schleif noted in comments reported by Reuters, with earnings season largely behind the market and the Fed decision looming, it’s “hard for the market to find a direction” until policymakers lay out their roadmap. ^[19]

Beyond the Fed, investors will also get October JOLTS job-openings data later today at 10:00 am ET and November CPI next week on December 18 — data points that could either validate or challenge the Fed’s evolving narrative. ^[20]

AI and Nvidia: Washington’s H200 Green Light Lifts Tech

Tech is once again at the center of the story — and not just because it was Monday’s lone winning S&P 500 sector.

On Monday, President Donald Trump said the United States will allow Nvidia’s H200 AI processors — its second‑most‑advanced AI chips — to be exported to China, subject to a 25% fee on each sale and vetting of “approved” commercial customers. More advanced Blackwell and Rubin chips remain restricted. ^[21]

Why it matters for the market:

Nvidia had already climbed about 3% during Monday’s regular session on reports that such a deal was in the works, then added another 1–2% in after‑hours and Asian trading once the announcement was confirmed. ^[22]
The news gives Nvidia a potential path to regain billions in AI-chip sales to China while the US government takes a cut and claims it is preserving national security. ^[23]
Pre‑market coverage from financial outlets shows US tech futures outperforming broader indexes , supported by Nvidia’s jump. ^[24]

Economists and China specialists warn the move could also accelerate China’s AI build‑out , narrowing the performance gap between Chinese and American AI models, as noted in analysis cited by the Associated Press. ^[25]

For US markets, though, the near‑term takeaway is simple: AI remains a core pillar of the bull case for equities , and policy decisions that favor Nvidia and other chipmakers continue to have outsized impact on index‑level performance.

Media Megadeal Drama: Paramount vs. Netflix Weighs on Communication Services

If AI is the upside story, traditional media is the messy one.

A high‑stakes takeover battle for Warner Bros. Discovery helped drag down the S&P 500 communication services sector on Monday:

The group fell around 1.8% , making it the worst‑performing sector in the index. ^[26]

The backdrop:

Paramount Skydance launched a hostile $108.4 billion all‑cash bid for all of Warner Bros. Discovery, offering $30 per share and directly challenging an earlier $72 billion cash‑and‑stock deal from Netflix for select assets. ^[27]
The move is backed by deep‑pocketed investors, including Middle Eastern sovereign wealth funds and other major financiers, according to Reuters and other reports. ^[28]
If Warner Bros walks away from Netflix’s agreement, it faces a $2.8 billion breakup fee , while Netflix would owe $5.8 billion if its deal collapses, underscoring the financial stakes. ^[29]

Market reaction has been sharp:

Warner Bros. Discovery shares rose about 4–5% , reflecting hopes of a richer payout.
Paramount Skydance rallied roughly 9% on speculation it could transform itself into a Hollywood super-power.
Netflix slid about 3.4% , as investors questioned whether the company might overpay or face tougher antitrust scrutiny if it wins. ^[30]

President Trump has also flagged antitrust concerns, suggesting a Netflix–Warner combination “could be a problem”, adding a political layer of uncertainty that markets dislike. ^[31]

For the broader market, this saga underscores two themes:

Deal risk can quickly pressure big index components and entire sectors.
Regulatory and political scrutiny over media concentration remains a real overhang for investors.

Beyond the Headlines: Flows Show Caution Beneath the Surface

Even as indexes hover near records, money flows tell a more cautious story.

In the week to December 3 , US investors:

Poured about $104.75 billion into money market funds , the largest weekly inflow since early November.
Pulled around $3.52 billion from US equity funds , marking a second straight week of net outflows. ^[32]

Breaking it down further:

Mid‑cap equity funds recorded a seventh consecutive week of outflows (~$495 million), while small‑cap and large‑cap funds lost roughly $1.18 billion and $476 million , respectively. ^[33]
Sector funds still drew money, with industrials and gold/precious-metals equity funds attracting about $510 million and $293 million in net inflows. ^[34]
Bond funds saw only about $314 million in inflows — the smallest weekly gain since October — as investors favored short‑to‑intermediate investment‑grade and municipal debt while pulling $1.58 billion from government and Treasury funds. ^[35]

The pattern is clear:
Investors are parking cash in safe assets , selectively adding to sectors like industrials and gold, and treading carefully in broad equities — a classic pre-Fed, late-cycle positioning shift.

What Strategists Expect for 2026: Bullish Targets vs. Volatility Bets

Even with near‑term caution, many Wall Street strategists remain optimistic about the multi‑year outlook for US stocks.

Oppenheimer’s Street‑High S&P 500 Target

Oppenheimer has emerged as one of the most bullish houses on Wall Street , boosting its year‑end 2026 S&P 500 target to 8,100 — a Street‑high forecast. ^[36]

According to the firm’s latest strategy note:

The new target implies roughly 18% upside from recent levels near 6,870 and about 14% above its 2025 year-end target of 7,100. ^[37]
Oppenheimer argues that the 2025 rally has broadened beyond mega-cap tech , strengthening the foundation for further gains.
With Q3 2025 S&P 500 earnings up about 12.9% on 8.2% revenue growth , and 10 of 11 sectors delivering positive earnings growth (led by technology, financials and materials), the firm sees fundamentals as supportive of higher valuations. ^[38]

Other strategists are also constructive. One widely cited forecast expects S&P 500 earnings per share to grow about 14% in 2026 , reaching roughly $320 , compared with growth of around 10% in 2025. ^[39]

Volatility as an Asset Class

Not everyone is simply “long stocks.” A separate Reuters report highlights how hedge funds and state-backed investors are ramping up volatility strategies for 2026, betting that geopolitical tensions, tariff disputes and diverging interest-rate paths will keep markets choppy. ^[40]

Key takeaways from that theme:

Volatility‑linked products and options strategies are attracting more institutional capital.
Fed uncertainty — especially around how far and how fast rates may fall — is encouraging investors to hedge downside risk even as they maintain equity exposure. ^[41]

The combination of bullish long‑term targets and rising demand for volatility hedges paints a nuanced picture: markets may still trend higher, but the path could be far less smooth than in 2025.

Consumer and Macro Backdrop: Households Nervous, Jobs Still Solid

Fresh data from the New York Fed’s Survey of Consumer Expectations shows that:

US households became more worried about their personal finances in November.
Yet inflation expectations held steady at about 3.2% over one year and 3% over three years, while perceptions of the job market actually improved , with lower expected job-loss probabilities. ^[42]

This mixed backdrop — softer confidence but decent labor-market views and inflation still above the Fed’s 2% target — helps explain why policymakers are likely to cut rates again this week but may emphasize caution about further easing. ^[43]

What to Watch Next

For traders and longer‑term investors alike, here are the key catalysts on the US market calendar:

Fed Decision – Wednesday, December 10
- 2:00 pm ET: FOMC statement and updated projections.
- 2:30 pm ET: Chair Jerome Powell’s press conference. ^[44]
Labor and Inflation Data
- Today: October JOLTS job-openings report (10:00 am ET), giving a fresh look at labor-market tightness. ^[45]
- December 18: November CPI — critical for confirming whether inflation is drifting sustainably toward target. ^[46]
Earnings From AI and Cloud Bellwethers
- Broadcom (AVGO) reports fiscal Q4 2025 results after the close on Thursday, December 11 , with analysts expecting revenue growth above 20% year-over-year. ^[47]
- Oracle is also scheduled to report this week, with investors focused on cloud and AI infrastructure spending, especially given concerns about debt‑funded AI investment. ^[48]
Regulatory and Policy Developments
- Market reaction to the Nvidia H200 export approval and any follow‑up on AI regulation, including a potential executive order on a unified national AI rulebook. ^[49]
- Ongoing scrutiny of the Paramount–Netflix–Warner Bros bidding war and associated antitrust commentary. ^[50]

Bottom Line for US Stock Market Today

As of Tuesday, December 9, 2025, the US stock market sits at a crossroads :

Indexes are near record highs , powered by AI, resilient earnings and an economy that has slowed but not stalled. ^[51]
Short‑term bail is evident in flows into money market funds and the market’s sensitivity to every Fed headline. ^[52]
Policy decisions — from rate cuts to chip‑export rules and media‑merger scrutiny — are exerting an unusually strong influence on sector winners and losers. ^[53]