US Stock Market Today at 1 PM ET: Wall Street Slips From Record Highs as Fed Week, Mega-Deals and AI Trades Collide

U.S. stocks spent Monday’s early afternoon drifting lower from record territory, as Wall Street balanced a pivotal Federal Reserve meeting, a blockbuster bidding war for Warner Bros. Discovery and fresh deal-making in the AI infrastructure space.

By around 12:45–1:00 p.m. Eastern time on Monday, December 8, 2025, the S&P 500 was down roughly 0.4–0.5%, trading just under 6,850. The Dow Jones Industrial Average slipped about 0.4–0.5% (around 200 points), while the Nasdaq Composite was off about 0.3%. The small‑cap Russell 2000 was one of the few bright spots, holding a modest gain of about 0.2%. ^[1]

Even with those declines, the S&P 500 remained less than 1% below its all‑time high set in late October, keeping the “Fed week” pullback firmly in the “pause, not panic” category. ^[2]

Index check: What US stock market today looks like at midday

Market data and multiple live blogs show a fairly consistent picture of modest, broad‑based weakness around the middle of the session:

S&P 500 today: Down about 0.4–0.5% around 6,840, roughly 0.5–0.6% below its record high from October 28. ^[3]
Dow Jones today: Lower by around 0.4–0.5%, a drop of about 200–220 points from record‑adjacent levels near 48,000. ^[4]
Nasdaq today: Off roughly 0.3%, reflecting pressure from big communication‑services names like Netflix but support from parts of big‑cap tech. ^[5]
Russell 2000 today: Up about 0.2%, signaling ongoing speculative interest in smaller stocks despite the Fed uncertainty. ^[6]
VIX (“fear gauge”): Around 17 at midday, roughly 10% higher on the day, underscoring a mild uptick in anxiety as traders hedge Fed‑week risks. ^[7]

In short: stocks are down, but not dramatically, and the pullback looks more like consolidation after a huge run than the start of a new downtrend.

Fed Week: A near‑certain rate cut, but a very uncertain message

The dominant macro story is the Federal Reserve’s final policy meeting of 2025, which begins Tuesday and concludes Wednesday with a rate decision and Chair Jerome Powell’s press conference. ^[8]

What markets are pricing in

Futures markets put the odds of a 25‑basis‑point rate cut at roughly 85–90%, following similar cuts in September and October. ^[9]
A cut of that size would likely move the federal funds target range down to about 3.50%–3.75%. ^[10]
The real suspense is over the Fed’s Summary of Economic Projections and “dot plot,” which will show how many additional cuts policymakers anticipate through 2026. ^[11]

Strategists at Edward Jones note that inflation remains above the Fed’s 2% target, and they expect the central bank to signal a cautious pace of easing in 2026, with perhaps one or two additional cuts next year rather than an aggressive cycle. ^[12]

Kiplinger’s live Fed coverage points out that the Fed is operating with a “foggy windshield” because a record‑long government shutdown has delayed key employment and inflation reports, making officials more dependent on private data and market pricing. ^[13]

All of that helps explain why stocks are near records but not breaking out: investors are betting heavily on a cut, but they are far less certain the Fed will validate hopes for a long, smooth easing cycle.

Mega‑deal Monday: Paramount vs. Netflix for Warner Bros. Discovery

The headline corporate story moving the US stock market today is a dramatic escalation in the media wars:

Paramount Skydance launched a hostile, all‑cash tender offer to acquire Warner Bros. Discovery for $30 per share, valuing the deal at roughly $108.4 billion, and going directly to shareholders. ^[14]
The move aims to top Netflix’s earlier cash‑and‑stock bid for Warner’s film and TV assets, unveiled last week. ^[15]

Market reaction around midday:

Warner Bros. Discovery (WBD) shares jumped roughly 5% on the hostile bid. ^[16]
Paramount Skydance (PSKY) traded sharply higher (mid‑single‑digit gains), as investors bet on either a successful deal or improved strategic positioning. ^[17]
Netflix (NFLX) tumbled around 4%, making it one of the biggest drags in the communication‑services sector, as traders reassessed the odds and economics of its own Warner transaction. ^[18]

Beyond the day‑to‑day moves, this bidding war is sending a broader message to investors: traditional and streaming media players are still willing to do huge, risky deals to secure content and scale, even in a higher‑rate world.

IBM’s $11 billion Confluent deal turbocharges the AI data theme

The other big M&A headline fueling intraday volatility is in AI infrastructure:

IBM agreed to acquire Confluent, a real‑time data streaming and infrastructure company, in an all‑cash deal valued at about $11 billion. ^[19]
IBM will pay roughly $31 per Confluent share, a premium of about 50% to Friday’s close. ^[20]

Stock reaction:

Confluent (CFLT) shares surged close to 30% in Monday trading. ^[21]
IBM (IBM) edged higher by roughly 1%, as markets welcomed the move to strengthen its data and AI platform. ^[22]

Strategically, the deal underlines a theme that’s been building all year: the AI race is shifting from headline‑grabbing models to the plumbing that feeds them — high‑quality, real‑time data infrastructure. For investors, that keeps the spotlight not just on mega‑caps, but on the broader ecosystem of data‑infrastructure and cloud companies.

Carvana, CRH and Comfort Systems: Index reshuffle winners

Another powerful undercurrent in US stock market news today is the latest S&P 500 index reshuffle, announced late last week:

Carvana, CRH and Comfort Systems USA are all set to join the S&P 500 in a quarterly rebalance later in December. ^[23]
These additions come at the expense of LKQ, Solstice Advanced Materials and Mohawk Industries, which will move down to the S&P SmallCap 600. ^[24]

The impact at midday:

Carvana (CVNA) jumped around 8–11% after the inclusion news, extending what analysts at Investopedia describe as one of the more dramatic turnaround stories of the post‑pandemic era. ^[25]
CRH and Comfort Systems also traded firmly higher, while the outgoing small‑cap names lagged. ^[26]

Index changes often fuel forced buying and selling from passive funds and closet indexers, making them important short‑term catalysts even when the broader market is quiet.

Berkshire Hathaway’s leadership shuffle weighs on the Dow

One of the day’s notable losers — and a key drag on the Dow Jones today — is Berkshire Hathaway:

The conglomerate’s shares fell about 2%+ after news that Todd Combs, CEO of GEICO and a long‑time Buffett lieutenant, will leave to join JPMorgan Chase, and CFO Marc Hamburg will retire next year. ^[27]

Because Berkshire is a large, high‑priced component of the Dow, its slide had an outsized impact on the index’s point loss, even as most other blue chips saw more modest moves.

The announcement also sharpened an existing market narrative: Wall Street is increasingly focused on Berkshire’s post‑Buffett leadership era, and any hint of succession changes tends to be scrutinized closely.

CoreWeave’s $2 billion convertible deal rattles AI cloud sentiment

In the high‑growth AI cloud space, CoreWeave was under pressure:

The Nvidia‑backed cloud company announced a proposed $2 billion private offering of convertible senior notes due 2031, with the option for an additional $300 million. ^[28]
The company plans to use part of the proceeds for hedging transactions designed to limit share dilution, but equity investors still reacted cautiously. ^[29]

Shares dropped nearly 7%, dragging on parts of the AI‑infrastructure trade even as Confluent rallied on the IBM deal. ^[30]

Global backdrop: Fed cut bets keep world markets near record highs

Monday’s US session is unfolding against a constructive but cautious global backdrop:

Global equity indexes have been trading near record highs, supported by expectations that the Fed will deliver another cut and maintain a relatively friendly stance into 2026. TechStock²+1
Asia was mixed overnight, while European markets spent their day modestly lower to flat as traders waited for the Fed and digested weaker U.S. data. ^[31]

In bonds, Treasury yields edged higher, with the 10‑year yield around 4.17–4.18% by midday, reflecting slightly tighter financial conditions even as equities sat close to records. ^[32]

Forecasts: From Santa Claus rally hopes to an 8,100 S&P 500 target

Beyond today’s tape, several high‑profile strategists and market commentators weighed in on what comes next.

1. Seasonal tailwinds and the “Santa Claus rally”

Edward Jones notes that December has historically been one of the strongest months for stocks, with the S&P 500 posting positive returns roughly 70–73% of the time and an average gain around 1.2–1.4%, versus about 0.8–0.9% for a typical month. ^[33]

That pattern underpins the familiar notion of a Santa Claus rally, particularly over the final five trading days of the year and the first two of January. Strategists caution that fundamentals — earnings and interest rates — matter more than calendar folklore, but the historical pattern adds a bullish seasonal backdrop if the Fed doesn’t surprise hawkishly.

2. Oppenheimer’s ultra‑bullish S&P 500 target

A widely discussed MarketWatch piece on Monday highlighted that Oppenheimer Asset Management, which it says “called 2025 nearly perfectly” until a brief wobble, now holds the highest S&P 500 target on Wall Street — 8,100 on the index. ^[34]

This implies significant upside from current levels near 6,800–6,900, and underscores how optimistic some institutional strategists remain, even after a powerful multi‑year rally.

3. Earnings and 2026 outlook

Edward Jones analysts project:

S&P 500 earnings growth of about 11% for 2025, following roughly 10% growth in 2024.
Broad‑based earnings growth in 2026, with all 11 S&P sectors expected to post positive gains. Cyclical groups like industrials, consumer discretionary and materials are forecast to grow profits by more than 11%, while tech and communication services remain leaders. ^[35]

On the macro front, they expect:

Inflation to remain above 2%, in the 2.5–3.0% range, but gradually easing.
One or two more Fed rate cuts in 2026, supporting a still‑healthy, if slower, global growth backdrop. ^[36]

Put together, that mix — moderate inflation, gentle easing and steady profit growth — is broadly supportive of risk assets, but leaves little room for policy mistakes or growth shocks.

What to watch into the close

As the clock moves past 1 p.m. ET, traders and longer‑term investors alike are watching a few key signposts:

Fed expectations vs. Fed reality
- Any shift in FedWatch‑implied odds before Wednesday (for example, if odds of a cut fall sharply) could jolt both stocks and bonds. ^[37]
Warner Bros. bidding war
- Whether Warner’s board publicly responds to Paramount’s hostile bid — or Netflix sweetens its offer — will matter not just for the stocks, but for sentiment around regulatory risk and mega‑deal M&A. ^[38]
Breadth and small caps
- The Russell 2000’s relative strength today could be an early tell for whether any Santa Claus‑style rally broadens beyond mega‑caps or stays concentrated at the top. ^[39]
Volatility and credit
- A sustained rise in the VIX or widening credit spreads would signal that investors are becoming less comfortable with the balancing act between rate cuts, inflation and growth.

Bottom line

By early afternoon on December 8, 2025, the US stock market today is characterized by:

Slightly lower major indexes, still hovering just below record highs.
Fed‑driven caution as traders brace for a widely expected rate cut but an uncertain message about 2026.
M&A fireworks — notably Paramount’s hostile all‑cash bid for Warner Bros. Discovery and IBM’s $11 billion purchase of Confluent — reshaping media and AI‑data landscapes.
Stock‑specific winners and losers from index reshuffles and corporate news, including big moves in Carvana, Berkshire Hathaway and CoreWeave.

For now, the pullback looks more like positioning ahead of a crucial Fed decision than the start of a broader downturn. Whether December lives up to its reputation — and whether bulls get a full‑blown Santa Claus rally or a lump of coal — will depend heavily on what the Fed, and Chair Powell, deliver on Wednesday.

This article is for informational purposes only and does not constitute financial or investment advice. Always do your own research or consult a licensed financial professional before making investment decisions.