U.S. stocks pushed higher after the closing bell on Wednesday, December 3, 2025, with the Dow Jones Industrial Average surging more than 400 points and all major indexes ending near record territory. A surprisingly weak private payrolls report, easing bond yields and resilient services-sector data reinforced expectations that the Federal Reserve will cut interest rates at next week’s policy meeting. [1]
Market recap: indexes climb toward record highs
By the close of trading:
- S&P 500 rose about 0.3% to 6,849.72
- Dow Jones Industrial Average jumped 408 points (0.9%) to 47,882.90
- Nasdaq Composite added 0.2% to 23,454.09
- Russell 2000 small‑cap index climbed 1.9% to 2,512.14 [2]
The S&P 500 now sits less than a percentage point below its all‑time high from late October, while the Dow is also within 1% of its own peak, underscoring how close Wall Street is to fresh records despite signs of cooling in the labor market. [3]
Wednesday’s advance extends a powerful year‑end rally:
- The S&P 500 is up roughly 16.5% in 2025
- The Dow is ahead about 12.5% year to date
- The Nasdaq has gained more than 21% in 2025 [4]
Breadth was notably strong. On the New York Stock Exchange, advancing issues beat decliners by more than 2‑to‑1, and the Nasdaq saw a similarly positive ratio, with dozens of new 52‑week highs on the day. [5]
Soft jobs data keeps a December Fed cut firmly on the table
The main macro story driving markets was the ADP National Employment Report, which showed private‑sector payrolls unexpectedly fell by about 32,000 jobs in November, compared with economists’ expectations for job growth. [6]
This data took on outsized importance because a record‑long U.S. government shutdown has delayed several key official economic releases, including the Labor Department’s monthly nonfarm payrolls report. With the usual government numbers offline and now scheduled to be released on December 16, traders are leaning far more than usual on private data like ADP and surveys. [7]
At the same time, the ISM services index for November came in at 52.6, essentially unchanged from October’s 52.4, signaling continued expansion in the dominant services side of the economy. Importantly for the Fed, the “prices paid” component eased slightly, suggesting inflation pressures in the sector may be cooling. [8]
Bond markets quickly reacted:
- The 10‑year Treasury yield slipped to roughly 4.05%, down from about 4.09% on Tuesday. [9]
- The 2‑year yield, which is particularly sensitive to Fed expectations, fell to around 3.49%. [10]
Fed funds futures now imply roughly an 85–90% probability of a 25‑basis‑point rate cut at the December 9–10 FOMC meeting, up modestly from earlier in the week. [11]
Strategists at Charles Schwab noted that the ADP surprise “further supports the case” for what some are calling an “insurance” cut aimed at preventing a sharper downturn in the labor market rather than responding to a full‑blown recession. [12]
Sector snapshot: Tech stumbles while energy and small caps shine
Under the surface, Wednesday’s move was not led by the mega‑cap tech stocks that have dominated much of 2025. Instead, the rally leaned on cyclical sectors, small caps and energy names, a pattern many strategists see as healthy late‑cycle rotation. [13]
Tech under pressure after Microsoft headlines
The S&P 500 technology sector finished in the red, making it one of only two sectors to decline on the day. [14]
- Microsoft dropped around 1.5–2% intraday, after a report suggested the company had cut AI software sales quotas following missed targets in its last fiscal year. Microsoft later pushed back on the story, and the shares clawed back some losses, helping the Nasdaq and S&P 500 stay positive but still ending lower on the session. [15]
- Other major chip and AI beneficiaries such as Nvidia and Broadcom also slipped, contributing to the sector’s underperformance. [16]
For investors who have grown accustomed to tech leadership, the day’s action was a reminder that AI giants are no longer sailing on pure hype—headlines about execution and monetization now move prices quickly.
Energy leads as oil climbs
By contrast, energy stocks were the best‑performing S&P 500 sector, boosted by a rise in crude oil prices. [17]
Higher oil lifted integrated producers and refiners, and rate‑cut expectations supported the broader “risk‑on” tone in cyclical sectors tied to growth and capital spending.
Chipmakers and retailers among the big winners
Several individual stocks helped power the rally:
- Microchip Technology jumped roughly 8–10% after the company raised its expectations for quarterly sales and profits, saying business trends are running toward the high end of its prior guidance. [18]
- Marvell Technology gained about 5–7% after posting better‑than‑expected results and announcing a $3.25 billion acquisition of AI hardware startup Celestial AI, a move aimed at strengthening its data‑center and AI infrastructure footprint. [19]
- American Eagle Outfitters surged more than 14% after raising its annual comparable‑sales forecast and reporting a strong start to the holiday shopping season. [20]
- Macy’s finished modestly higher after swinging to a profit that topped expectations, though its stock’s big year‑to‑date gains muted the reaction. [21]
- Biotech name Capricor Therapeutics skyrocketed more than 300% on encouraging trial results for a potential treatment for Duchenne muscular dystrophy. [22]
On the downside, a small group of mega‑cap tech names—most notably Microsoft—acted as a drag on the cap‑weighted indexes, keeping the S&P 500’s gain smaller than it might otherwise have been given the strength in smaller and more cyclical stocks. [23]
Small caps and ‘risk assets’ roar back
One of the clearest themes of the day was the resurgence in small‑cap stocks. The Russell 2000’s 1.9% jump easily outpaced the large‑cap indexes and followed a powerful rebound last week. [24]
This dovetails with fresh research from Bank of America, which argues that small caps are poised to be surprise leaders in 2026:
- Analysts there expect S&P SmallCap 600 earnings to grow about 19% in 2026, versus roughly 13% for the S&P 500 and 15% for mid‑caps. [25]
- Strategist Jill Carey Hall reiterated today that BofA is “bullish on small caps in 2026,” citing Fed rate cuts, a new U.S. capex cycle and increased M&A activity as key catalysts likely to favor smaller, domestically focused companies. [26]
If the Fed does deliver another cut next week and signals a path toward easier policy in 2026, that backdrop—plus stronger expected earnings growth—could keep money rotating into small‑cap and cyclically sensitive areas of the market.
Risk appetite extended beyond equities:
- Bitcoin climbed back above $93,000, continuing its rebound after a sharp pullback below $81,000 last month. [27]
Cross‑asset signals: bonds, gold and crypto echo the rate‑cut narrative
The move in Treasuries was matched by action in precious metals and other alternative assets:
- A Dow Jones “Data Talk” note highlighted that the 2‑year Treasury yield fell to about 3.485%, reflecting growing confidence in near‑term Fed easing. [28]
- A separate analysis from MarketMinute described gold futures surging to around six‑week highs as traders bet that weaker payrolls data and a dovish Fed will keep real yields under pressure and bolster the appeal of non‑yielding safe‑haven assets. [29]
Gold analysts are increasingly framing the metal’s rally as part of a broader “de‑dollarization” and central‑bank‑buying trend, with some longer‑term forecasts even pointing to the possibility of gold approaching new records into 2026 if the Fed continues easing and geopolitical risks remain elevated. [30]
The combination of falling yields, stronger gold and a rebound in bitcoin paints a consistent picture: markets are leaning into a lower‑rate, more liquidity‑friendly environment—even as official data are temporarily disrupted by the government shutdown.
What Wall Street’s latest forecasts say about 2026
Wednesday’s tape played out against a backdrop of increasingly bullish 2026 equity forecasts. Several major banks have published fresh outlooks in recent days:
- Deutsche Bank now projects the S&P 500 will reach 8,000 by the end of 2026, implying roughly 17–20% upside from current levels, driven largely by robust earnings growth and ongoing AI‑related capital spending. [31]
- A Nasdaq‑published summary of Wall Street targets notes that multiple firms see the index in the 7,500–8,000 range in 2026, assuming continued strength in corporate profits and a supportive Fed. [32]
- By contrast, Bank of America is more cautious, looking for the S&P 500 to end 2026 nearer 7,100, only modestly above today’s levels, and warning that an “AI air pocket” could emerge if monetization lags the current investment boom. TechStock²
On the seasonal side, an analysis by Phil Rosen at Inc. underscores why many strategists are talking up a “Santa rally”this year:
- When the S&P 500 enters December in positive territory—like it has in 2025—the index has historically finished the month higher about 81% of the time, with an average gain just above 2%.
- In first years of a U.S. presidential cycle, December has never been negative in the post‑1950 data set cited, with average gains around 2%. [33]
Those historical patterns don’t guarantee anything, but they help explain why dips—especially those driven by “bad news that boosts rate‑cut hopes,” like today’s ADP miss—have been greeted with buying rather than panic.
Key risks and catalysts after today’s close
Even with indexes brushing up against records, strategists caution that the market is becoming more sensitive to macro and policy surprises. Several near‑term events loom large: TechStock²+2Reuters+2
- December 9–10 FOMC meeting
- A widely expected 25‑bp cut is now heavily priced in. The bigger swing factor will be the Fed’s updated rate projections (the “dot plot”) and Chair Powell’s tone on how many cuts might follow in 2026. [34]
- Delayed October/November payrolls (Dec. 16)
- With ADP showing job losses, investors will scrutinize the combined official jobs report to determine whether the labor market is merely cooling—or weakening in a way that could threaten the earnings outlook behind those bullish 2026 targets. [35]
- Friday’s PCE inflation report
- As the Fed’s preferred inflation gauge, November PCE will heavily influence how comfortable policymakers feel about delivering additional cuts next year. A soft reading would reinforce today’s risk‑on reaction; a hot print could quickly pressure both bonds and stocks. TechStock²+1
- S&P 500 December index reshuffle
- The final 2025 rebalance, expected to be announced later this week and implemented on December 19, could trigger stock‑specific volatility as index funds adjust positions. TechStock²
- Political noise around the Fed
- Comments this week from Treasury Secretary Scott Bessent about tightening residency rules for regional Fed presidents—and hints the White House might “veto” certain appointments—underscore the mounting political pressure around interest‑rate policy and Fed leadership. [36]
What today’s move means for investors
Nothing in this article is personal investment advice, but the US stock market on December 3, 2025 is flashing a few clear themes: TechStock²+2Reuters+2
- The bull market is intact but maturing. Indexes are near records, participation has broadened beyond mega‑cap tech, and earnings remain solid—but valuations are elevated, and the labor market is clearly cooling at the margin.
- “Bad news is good news” still works—for now. Weak jobs data pushed yields lower and stocks higher today, but a series of similar reports could eventually flip the narrative from “more cuts” to “recession risk.”
- Leadership is rotating. Tech wobbling while energy, small caps and cyclical names rally suggests investors are positioning for a more broad‑based, rate‑sensitive advance in 2026.
- Rate‑cut hopes are doing heavy lifting. An 80–90% priced‑in chance of a December cut leaves limited room for disappointment if the Fed decides to hold fire or signals fewer moves next year than markets currently expect.
For now, though, the story of “US stock market today” is straightforward: a weaker jobs print, gentler yields and resilient services activity combined to send the Dow more than 400 points higher and keep the broader market within striking distance of fresh all‑time highs.
This article is for informational and journalistic purposes only and does not constitute financial advice or a recommendation to buy or sell any security.
References
1. www.wvnews.com, 2. www.wvnews.com, 3. www.washingtonpost.com, 4. www.wvnews.com, 5. www.kitco.com, 6. www.schwab.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.washingtonpost.com, 10. www.morningstar.com, 11. www.kitco.com, 12. www.schwab.com, 13. www.reuters.com, 14. www.reuters.com, 15. www.kitco.com, 16. www.kitco.com, 17. www.reuters.com, 18. www.washingtonpost.com, 19. www.washingtonpost.com, 20. www.washingtonpost.com, 21. www.washingtonpost.com, 22. www.washingtonpost.com, 23. www.washingtonpost.com, 24. www.wvnews.com, 25. www.benzinga.com, 26. www.benzinga.com, 27. www.schwab.com, 28. www.morningstar.com, 29. markets.financialcontent.com, 30. markets.financialcontent.com, 31. www.reuters.com, 32. www.nasdaq.com, 33. www.inc.com, 34. www.federalreserve.gov, 35. www.investors.com, 36. www.reuters.com
