NEW YORK (Dec. 17, 2025, 11:59 a.m. ET) — The U.S. stock market is struggling to regain its footing late this morning as investors weigh a fresh pullback in AI-linked mega-caps against a rebound in energy stocks sparked by a jump in oil prices.
At 11:59 a.m. ET, the S&P 500 was down about 0.8% at roughly 6,745.66, while the Dow Jones Industrial Average was down about 0.15% at roughly 48,039.78. [1] The Nasdaq Composite was down about 1.25% to roughly 22,821.50 as of 11:55 a.m. ET, reflecting renewed pressure on the tech-heavy trade that powered much of 2025’s gains. [2]
The market’s mood today: a tug-of-war between year-end optimism (the hope for a “Santa rally”) and a growing unease that inflation, oil, and expensive AI bets could play the Grinch for risk assets just as liquidity typically thins into late December. [3]
What’s driving Wall Street today: AI fatigue meets an oil rebound
The biggest weight on stocks again is the AI complex, where investors are asking a blunt question: will the profits show up quickly enough to justify the spending spree—and the debt some firms are taking on to fund it? [4]
Early in the session, major indexes were slightly higher, but sentiment shifted as attention returned to the same pressure points that hit the market on Dec. 15 and Dec. 16: AI valuations, financing risk, and uneven leadership inside the indexes. [5]
Oracle, Nvidia, and the “AI capex” question
One catalyst in today’s headlines: Oracle, which slid after a report said its data-center partner Blue Owl Capital would not back a $10 billion deal for a next facility—fueling broader anxiety that the AI buildout is turning into a financing story, not just an innovation story. [6]
In the same risk-off AI mood, Nvidia—still one of the most influential stocks in the market by size—was among the notable drags cited in today’s coverage as investors reassess how much AI spending can translate into near-term earnings. [7]
A telling detail: most stocks are up, but the index is down
A key nuance from late-morning trading: the majority of stocks are rising, but the benchmark indexes are slipping anyway because a relatively small group of mega-cap tech names has become heavy enough to overwhelm broader gains. [8]
That dynamic matters for the next two weeks: a “breadth-driven” rally (more stocks participating) can cushion indexes even if leadership rotates away from AI—but if the largest tech stocks keep dropping sharply, they can still pull the whole market lower.
Oil jumps after Venezuela move, complicating the inflation picture
While AI is dragging, oil is doing the opposite—rallying after President Donald Trump ordered a blockade of all “sanctioned oil tankers” into Venezuela, a move that pushed crude higher and lifted energy stocks. [9]
Late this morning, benchmark U.S. crude was up about 1.5% to around $56 a barrel, and Brent crude was near $60, according to market reports. [10]
Why it matters for stocks right now:
- Energy shares get immediate support when crude rises (helpful for index “balance”). [11]
- But higher oil can also feed inflation expectations, which risks keeping interest rates higher for longer—exactly the fear hanging over today’s “Santa rally” narrative. [12]
Rates and the Fed: cut hopes are alive, but inflation data is the next big test
Markets are still trying to translate mixed economic signals into a clean interest-rate path.
On the one hand, Fed Governor Christopher Waller signaled the central bank could still have room to cut rates in a softening job market, helping keep rate-cut hopes from collapsing. [13]
On the other hand, multiple reports emphasize that the next major catalyst is upcoming U.S. consumer inflation data due Thursday, which investors see as potentially disruptive—especially with oil rising and recent labor data complicated by shutdown-related distortions. [14]
Bond yields are reflecting that “wait-and-see” stance. The 10-year Treasury yield was hovering around the mid-4% range late this morning. [15]
The week so far: what changed since Dec. 15 (and why it still matters today)
Because your readers will likely have seen three straight sessions of AI-driven swings, here’s the clean recap—from Dec. 15, 2025 onward—of what’s shaped today’s tone.
Monday, Dec. 15: a cautious reset to start the last full trading week
On Dec. 15, stocks closed lower as investors positioned for a data-heavy week and looked for clues on rate policy and Fed leadership. The Dow slipped 0.09%, the S&P 500 fell 0.16%, and the Nasdaq dropped 0.59%. [16]
A key theme emerged: investors were “holding their breath” ahead of delayed and upcoming jobs data, while also questioning whether leadership can remain concentrated in AI. [17]
Company headlines reinforced the AI jitters:
- ServiceNow plunged amid a report it was in advanced talks to buy cybersecurity startup Armis. [18]
- Tesla rose after CEO Elon Musk said it was testing robotaxis without safety monitors in the front passenger seat. [19]
- iRobot cratered after filing for bankruptcy protection. [20]
Tuesday, Dec. 16: mixed close as jobs data lands—and recession vs. cuts gets debated again
On Dec. 16, the market ended mixed: the Nasdaq closed higher (+0.23%), while the Dow (-0.62%) and S&P 500 (-0.24%) fell, with declines in healthcare and energy noted as key drags. [21]
The economic backdrop was messy but market-moving:
- A Labor Department report showed nonfarm payrolls increased by 64,000 in November, while the unemployment rate rose to 4.6%. [22]
- Retail sales were flat in October, slightly below estimates, with analysts warning shutdown-related distortion. [23]
- After the data, investors were pricing at least 58 bps of rate cuts next year (per Reuters’ reporting at the time). [24]
One under-the-radar development that matters for market structure: Reuters reported that Nasdaq filed paperwork with the SEC to roll out round-the-clock trading of stocks, echoing similar moves discussed by other major venues. [25]
Wednesday, Dec. 17 (today): early bounce fades into a late-morning slide
This morning began with slight gains, supported by energy’s rebound as crude rose on the Venezuela news—before AI weakness pulled indexes back down. [26]
That intraday reversal is why today’s “11:59 a.m.” snapshot looks softer than the early-market prints.
Forecasts and analysis: what strategists are saying about 2026 (and why 2025’s winners face scrutiny)
Even with today’s pullback, major indexes remain near highs set recently, and Wall Street is still positioned for a strong multi-year run—yet the forecast debate has turned more cautious since Dec. 15. [27]
A more modest S&P 500 target from Bank of America
In one of the most-cited notes from Dec. 15 coverage, Bank of America strategist Savita Subramanian said her team’s year-end target was “pretty lackluster,” projecting the S&P 500 ends 2026 around 7,100—about 4% above the level around that day’s close—while expecting earnings to grow but valuation multiples to contract. [28]
That’s not a “crash call.” It’s a forecast that the market’s next leg could be harder to earn, especially if investors stop paying ever-higher prices for growth narratives.
Vanguard’s longer-term return view adds to the valuation conversation
Dec. 15 reporting also pointed to Vanguard’s forecast that the S&P 500 may average mid-single-digit returns over the next decade, a reminder that starting valuations can shape longer-run outcomes. [29]
UBS survey: AI adoption is real, but “at scale” is still rare
Another data point shaping the AI narrative: AP reported that only 17% of respondents in a UBS survey of relatively large businesses said they are in production at scale with their AI projects—an update UBS analysts framed as a reason for tech investors to stay sober about 2026 revenue lift from AI products. [30]
Combine that with the debt-and-capex concerns now surrounding parts of the AI ecosystem, and you get today’s market tension: investors still believe in AI’s long-term trajectory, but they are increasingly sensitive to timelines, financing, and proof of monetization. [31]
What to watch this afternoon and the rest of the week
With the market sitting in a fragile late-December tape—where headlines can move prices more than usual—here are the catalysts investors are focused on next:
- Thursday’s U.S. consumer inflation report (a key “risk event” for both stocks and bonds). [32]
- Oil’s follow-through after the Venezuela tanker blockade order—especially if Brent holds near/above the $60 area. [33]
- AI mega-cap stabilization vs. renewed selling, with Nvidia/Oracle/Broadcom headlines continuing to influence sentiment. [34]
- Rate-cut expectations: investors have been quick to price cuts after softer signals, but Fed commentary continues to push back on the idea that easing is “automatic.” [35]
Bottom line for investors right now
At 11:59 a.m. ET, the story in U.S. equities is not a broad crash—it’s a leadership problem: the market is trying to advance without leaning so heavily on the AI names that drove 2025. [36]
If oil stays elevated and inflation prints hot, the path to easier policy gets harder, and that’s where today’s unease is coming from. [37] But if inflation cooperates and the market broadens (more sectors participating), the traditional year-end playbook could still have room to run—even with AI no longer doing all the heavy lifting.
References
1. www.investing.com, 2. finance.yahoo.com, 3. www.reuters.com, 4. apnews.com, 5. www.reuters.com, 6. www.reuters.com, 7. apnews.com, 8. apnews.com, 9. apnews.com, 10. apnews.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.reuters.com, 15. apnews.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 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. apnews.com, 28. www.investopedia.com, 29. www.investopedia.com, 30. apnews.com, 31. www.reuters.com, 32. www.reuters.com, 33. www.reuters.com, 34. apnews.com, 35. www.reuters.com, 36. apnews.com, 37. www.reuters.com
