US Stock Market Today, December 9, 2025: Wall Street Pauses as Fed Rate Cut Decision Nears

Wall Street is in “wait-and-see” mode on Tuesday, December 9, 2025, with major US stock indices trading in a tight range as the Federal Reserve begins its final policy meeting of the year and investors digest fresh labor market data and big corporate headlines.

By late morning in New York, the Dow Jones Industrial Average and S&P 500 were modestly higher, while the Nasdaq Composite hovered slightly in the red, leaving all three benchmarks still close to record territory after Monday’s small pullback. ^[1]

Market Snapshot: Dow Edges Up, Nasdaq Slips

Dow Jones Industrial Average: up around 0.2–0.3% in recent trading, hovering just above 47,800, after falling 0.45% on Monday to 47,739.32. ^[2]
S&P 500: up roughly 0.1%, near 6,855, a touch above Monday’s close of 6,846.51. ^[3]
Nasdaq Composite: down about 0.1–0.2%, around 23,500–23,550, after slipping 0.14% on Monday. ^[4]

US stock futures were slightly positive earlier in the day, with S&P 500 contracts up about 0.1%, signaling a cautious rebound after Monday’s broad-based decline. ^[5]

The tone is one of calm but fragile risk appetite: investors are reluctant to make big moves ahead of Wednesday’s interest rate decision and updated Fed projections.

Fed Countdown: A Cut Is (Almost) Baked In — The Path After Is the Real Story

Markets are overwhelmingly convinced the Federal Reserve will cut rates by 25 basis points on Wednesday, bringing the target range for the federal funds rate down to 3.50%–3.75%. Futures tracked by the CME FedWatch tool put the odds near 90%. ^[6]

But what happens after this week’s move is where the debate really heats up:

A Reuters survey of US bond investors shows many on Wall Street now expect only a shallow easing cycle, with fewer cuts in 2026 than previously thought, given still-elevated inflation and a surprisingly resilient economy. ^[7]
Strategists at several major banks argue that the “neutral” Fed rate — the level that’s neither stimulating nor restraining the economy — may sit nearer 3%, higher than in the pre‑COVID era. That would limit how far yields can fall and keep pressure on richly valued equities. ^[8]
In a Reuters “Markets Now” segment, Paul Hollingsworth of BNP Paribas said he expects only one more rate cut in 2026, arguing the US economy will likely stay strong enough that further easing “won’t be justified,” in sharp contrast to markets that still price a more generous cutting path. ^[9]

Global central banks are also sounding more hawkish:

Monday saw a sharp jump in yields on US Treasuries, German Bunds and Japanese government bonds, driven by hawkish comments from policymakers and heavy government bond supply. ^[10]
A Bloomberg newsletter notes that central bankers worldwide are moving away from the idea of a prolonged easing cycle, pushing yields higher and raising questions about valuations for “high‑flying” tech stocks. ^[11]

On Tuesday, yields have stabilized but remain elevated. The 10‑year US Treasury trades around 4.17–4.18%, up from earlier in the week and just off recent highs, keeping borrowing costs elevated for businesses and households. ^[12]

JOLTS Data: A “No‑Hire, No‑Fire” Labor Market

A key reason the Fed can cut at all — but perhaps only cautiously — is the evolving US labor market.

The October Job Openings and Labor Turnover Survey (JOLTS), released Tuesday after a shutdown-related delay, painted a picture of a labor market that’s softening, but not cracking: ^[13]

Job openings rose slightly to 7.67 million, just 12,000 more than in September, but notably above economists’ forecast of about 7.15 million.
Hiring fell by 218,000 to 5.15 million, underlining a “no‑hire, no‑fire” environment where firms are cautious about both expanding and cutting staff.
The report incorporates data from September, which had been delayed by the 43‑day federal government shutdown, and confirms that openings remain high by historical standards even as hiring cools.

Economists and Fed officials often watch JOLTS as a gauge of labor demand. A job market that’s neither booming nor collapsing gives the Fed cover to trim rates to support growth, but the still‑elevated level of openings makes a deep cutting cycle harder to justify.

Markets reacted with a modest uptick in Treasury yields — the 10‑year nudge from about 4.15% to around 4.18% — and continued pricing of a single 25‑basis‑point cut this week rather than a more aggressive move. ^[14]

Tech, AI Chips and the “Magnificent Seven”

Tech and AI remain at the center of the US stock market story — but leadership is getting more complicated.

Short-Term Moves

On Tuesday morning:

The group of mega-cap tech names often dubbed the “Magnificent Seven” traded mixed. Nvidia slipped modestly, while Apple and Tesla posted small gains; Alphabet’s Google and some other communication names were slightly lower. ^[15]
Sector-wise, information technology and consumer discretionary were among the early laggards, while more defensive or yield‑sensitive corners such as utilities and energy showed relative strength. ^[16]

A major driver for chip stocks is Washington’s evolving export policy:

US President Donald Trump said the United States will allow Nvidia’s H200 AI processors — its second‑most powerful chips — to be exported to “approved customers” in China and other countries, with the US government taking a 25% share of those sales. ^[17]
The same approach is expected to apply to AMD, Intel and other leading US chipmakers, creating both a new revenue channel and a fresh layer of policy risk for the sector. ^[18]

At the same time, global demand for chips remains red‑hot. Taiwan reported record November exports of about $64 billion, up 56% year on year, driven heavily by electronics and semiconductors — a sign of robust global appetite that supports US tech earnings, even as funding costs rise. ^[19]

Big Tech’s Future Leadership Questioned

Strategists are increasingly divided on whether mega‑cap tech can continue to dominate the market in 2026:

Ed Yardeni, a longtime Wall Street economist, just ended his firm’s 15‑year recommendation to overweight tech and communication services in the S&P 500. He points to elevated valuations and intensifying competition among the Magnificent Seven, which together now account for roughly 45% of the index’s market cap. ^[20]
Yardeni argues that while earnings have supported these giants so far, their growing dominance also increases portfolio risk if sentiment turns or regulation bites, pushing some investors to look for leadership in smaller tech names, industrials, financials and overseas markets. ^[21]

On the other side, Oppenheimer has set a Street‑high year‑end 2026 S&P 500 target of 8,100, citing strong earnings growth, especially from AI‑linked companies and resilient US macro data. ^[22]

Deal Drama and Index Shuffles: Warner vs. Netflix, Carvana, Ares

Beyond macro and tech, corporate news and index reshuffles are generating significant stock‑specific moves.

Paramount vs. Netflix for Warner Bros Discovery

A blockbuster battle is underway in media:

Paramount Skydance has launched a hostile $108.4 billion bid for Warner Bros Discovery (WBD) in a last‑ditch effort to outbid Netflix, which previously agreed to acquire WBD for about $83 billion. ^[23]
On Monday, Paramount Skydance shares jumped around 7–9%, WBD climbed roughly 4–5%, while Netflixdropped about 3–4%. ^[24]

The tug‑of‑war over Warner underscores how media giants are racing to build scale in streaming and content, even as investors question the profitability of these models.

IBM Buys Confluent; Flows Around the S&P 500

M&A and index changes are also reshaping flows:

IBM agreed to acquire data infrastructure company Confluent in an $11 billion deal, sending Confluent shares up nearly 29% Monday, while IBM added about 0.4%. ^[25]
Carvana rallied around 12% after winning a coveted spot in the S&P 500, displacing chipmaker Marvell Technology, whose shares fell roughly 7%. ^[26]
Ares Management is slated to join the S&P 500 later this week, replacing Kellanova. Ares shares jumped about 8% on the news as passive funds prepare to add the stock. ^[27]

These moves matter beyond the individual names: index inclusions or removals often trigger forced buying or selling by passive and benchmark‑tracking funds, amplifying short‑term price swings.

Sector Check: Energy, Utilities and Defensive Plays vs. Growth

Monday’s session saw a broad, rate‑sensitive pullback:

The Dow, S&P 500 and Nasdaq fell 0.45%, 0.35% and 0.14%, respectively, as Treasury yields jumped and investors braced for Fed guidance. ^[28]
The communications services sector was the biggest loser, dragged down by Netflix and Alphabet, while technology was the only S&P 500 sector to finish higher, helped by Microsoft, Nvidia and Broadcom. ^[29]

On Tuesday, the leadership board shifted:

Energy and utilities led early gains in the S&P 500, while communication services, information technology and consumer discretionary underperformed. ^[30]
The VIX “fear index” sits around the mid‑teens — it jumped more than 8% on Monday to about 16.7, showing renewed demand for downside protection but still far from crisis levels. ^[31]

Options data highlighted by Saxo suggests traders are positioning for event risk rather than a full‑blown volatility spike: short‑dated options imply only about a 0.4% expected daily move for the S&P 500 into the Fed meeting, while longer‑dated hedges have seen more interest. ^[32]

How Strategists See 2026: Higher Neutral Rate, Narrower Upside

Looking beyond this week, the consensus is shifting toward a “higher for longer” interest rate world with more selective equity upside:

The Reuters bond‑investor survey shows money managers cutting “long duration” positions and favoring five‑year Treasuries — the “belly” of the curve — as disinflation stalls near 3% and the Fed’s neutral rate is perceived higher. ^[33]
Some banks, like Barclays, expect two more cuts in March and June 2026, while others (e.g., HSBC) think the Fed may pause for up to two years after this week’s move. ^[34]
Bank of America sees private credit defaults easing in 2026 but still warns of fragility in leveraged areas of the market, one reason credit spreads remain an important risk gauge. ^[35]
Schwab notes that major US indices remain on pace for third consecutive year of double‑digit gains, especially for the Nasdaq 100 and S&P 500, but highlights that small caps and international stocks may offer more attractive relative value into 2026 as US mega‑caps get increasingly crowded. ^[36]

Overlaying all of this is the message from global bond markets and central banks: yields have likely seen their absolute peak, but they may not go back to the ultra‑low regime of the 2010s, which implies lower valuation multiples and greater dispersion between winners and losers.

Key Themes to Watch in the Coming Days

Here’s what traders and long‑term investors will be watching as the week unfolds:

1. Fed Decision and Dot Plot (Wednesday)

Rate move: Markets overwhelmingly expect a 25‑basis‑point cut. Any deviation would trigger sharp moves across bonds, stocks and currencies. ^[37]
Dot plot: The Fed’s updated rate projections for 2026 and 2027 will be critical — if policymakers signal fewer cuts than markets expect, yields could jump and pressure growth stocks. ^[38]
Powell’s press conference: Investors will parse every line for clues on how the Fed is balancing inflation above 2%, a stagnating but not collapsing labor market, and political pressure around jobs and growth. ^[39]

2. Earnings: AI, Cloud, Consumer

This week’s earnings calendar is packed with names that can move entire sectors: ^[40]

Today: AutoZone — a window into consumer auto‑related spending.
Wednesday: Oracle, Adobe, Synopsys — updates on AI‑driven cloud demand, software spending, and design tools.
Thursday: Broadcom, Costco, Lululemon — read‑through for AI infrastructure, consumer staples resilience and discretionary demand for premium apparel.

Options pricing around Oracle implies a potential move of nearly 10% in either direction after earnings, underscoring just how pivotal AI‑linked tech has become for market sentiment. ^[41]

3. Labor Data and Shutdown Overhang

Because of the earlier federal shutdown:

The October nonfarm payrolls report was canceled, and a combined October/November employment report is now due next week, which will give the Fed and markets a more complete look at the jobs picture. ^[42]
Until then, JOLTS, jobless claims and survey data will do much of the heavy lifting in shaping expectations for growth and inflation. ^[43]

Bottom Line: A Market Marking Time Near Record Highs

The US stock market today is essentially treading water near all‑time highs, caught between two powerful forces:

Optimism about AI, strong corporate earnings and resilient economic growth.
Caution about higher long‑run interest rates, persistent inflation around 3%, and the risk that the Fed and other central banks stay hawkish for longer than equity bulls would like. ^[44]

For now, Tuesday’s mixed tape reflects a market waiting for the Fed — and increasingly aware that 2026 may be a year of selective stock picking rather than a simple index‑level melt‑up.

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