The U.S. stock market ended Thursday, December 11, 2025, with a striking split personality.
At 4 p.m. ET, the Dow Jones Industrial Average surged to a fresh record close around 48,704, up about 1.3% (+646 points). The S&P 500 edged up 0.2% to 6,900.99, also logging a new all‑time closing high, while the Nasdaq Composite fell roughly 0.25% to about 23,594 as investors punished megacap tech and AI-focused names. [1]
The move came one day after the Federal Reserve’s quarter‑point rate cut, and just hours after weekly jobless claims jumped by the most since 2020 and the U.S. trade deficit shrank to its narrowest level since the pandemic, a data mix that simultaneously stoked optimism about growth and anxiety about an AI-driven spending bubble. [2]
Snapshot: How Wall Street Closed Today
As of the closing bell on Thursday, December 11, 2025:
- Dow Jones Industrial Average: ~48,704.01, +1.34%, a new record close [3]
- S&P 500: 6,900.99, +0.21%, record closing high [4]
- Nasdaq Composite: ~23,593.86, –0.25%, extending tech underperformance [5]
Under the hood, the day looked very different index by index:
- Dow: Buoyed by Visa, UnitedHealth, Home Depot and other blue‑chip, non‑tech names, the Dow “jumped to a new all‑time high” as investors rotated toward traditional, cash‑generative companies. [6]
- S&P 500: Spent much of the session “rangebound between 6,800 and 6,900,” then pushed to a record close near 6,901 as dip‑buyers stepped in outside of mega‑cap tech. [7]
- Nasdaq: Fell around 0.3–0.4%, with AI and semiconductor names under pressure following Oracle’s results and broader worries that AI capital spending is running ahead of proven profits. [8]
Roughly three‑quarters of S&P 500 stocks rose, according to AP’s midday tally, highlighting how broad the advance was despite headline pressure on tech. [9]
Oracle’s AI Spending Spree Knocks Tech and the Nasdaq
The day’s main villain in tech was Oracle (ORCL), and it shaped nearly every narrative about the Nasdaq’s drop.
- Oracle’s fiscal Q2 earnings beat expectations with non‑GAAP EPS of $2.26, up 54% year-on-year, and revenue of $16.1 billion rising 14% thanks to “explosive growth in cloud infrastructure” and huge AI‑related demand. [10]
- But investors fixated on massive capital expenditures of about $8.1 billion in the quarter and negative free cash flow, as Oracle plows money into AI data centers and GPU capacity. [11]
Despite strong growth, the stock tumbled roughly 11–13%, briefly setting up for its worst day since the dot‑com bust, as Wall Street questioned whether that AI spending will actually pay off in returns. [12]
That sell‑off spilled across AI and chip names:
- Nvidia (NVDA) slid about 1.5–2.8%, becoming “the single heaviest weight on the S&P 500,” according to AP’s market wrap. [13]
- Broadcom (AVGO) and Micron (MU) fell around 1.5–3%, while Alphabet, Tesla and other megacaps also traded lower in late afternoon, mirroring the AI fatigue theme highlighted by multiple analysts. [14]
Analysts still generally like Oracle’s long‑term AI positioning—Wells Fargo, Bank of America, Barclays and UBS all kept overweight or buy ratings with price targets between $280 and $325—but near‑term debt‑funded capex and thin free cash flow are now firmly in the spotlight. [15]
In short: Oracle’s earnings didn’t kill the AI story—but they forced investors to demand “show me” rather than just “trust me.” [16]
Macroeconomic Backdrop: Jobless Claims Spike, Trade Gap Narrows, Fed Stays in Focus
Today’s tape played out against a macro backdrop that was noisy but broadly supportive for stocks.
1. Jobless claims jump, but likely seasonal
The Labor Department reported that initial jobless claims jumped by 44,000 to 236,000 in the week ended December 6—the biggest weekly increase in nearly 4½ years. [17]
However:
- Economists and the report itself stressed that the spike is largely due to seasonal adjustment quirks around Thanksgiving and holiday timing. [18]
- The four‑week moving average stayed near 216,750, signaling no clear trend deterioration.
- Continuing claims actually fell to about 1.84 million, partly as some benefits expired. [19]
Markets read the data as a mild growth concern and a modest plus for future rate cuts, not a sign of a collapsing labor market.
2. Trade deficit shrinks to lowest since mid‑2020
Delayed government data showed the U.S. trade deficit shrinking 10.9% to $52.8 billion in September, the narrowest gap since the early pandemic. Exports rose about 3.0%, while imports rose just 0.6%, indicating resilient external demand. [20]
That narrower trade gap supports GDP growth estimates and adds to the narrative of a still‑resilient U.S. economy even as manufacturing and goods demand rotate.
3. The Fed’s rate cut still sets the tone
Wednesday’s Fed meeting continues to anchor sentiment:
- The Fed cut its policy rate by 25 basis points to 3.50–3.75%, the third cut this year, calling policy roughly “neutral” and signaling just one more cut penciled in for 2026. [21]
- Stocks surged yesterday on the news, with the S&P 500 up about 0.7% to 6,886.68, the Dow up 1.05% to 48,057.75, and the Nasdaq up 0.33%—all finishing near or at record levels. [22]
Today’s macro data pulled Treasury yields slightly lower again, with the 10‑year yield around 4.12–4.14%, down from 4.18% earlier in the week. [23]
Lower long‑term yields + still‑solid growth = bullish fuel for value, cyclicals and dividend payers, even as investors start nit‑picking AI‑linked capex.
Sector Rotation: Blue Chips, Cruise Lines, Healthcare and Obesity Plays Lead
While the Nasdaq grabbed headlines for its pullback, today was a strong day for “old‑economy” winners.
From multiple intraday scoreboards and live blogs: [24]
- Credit services & financials:
- Visa (V) jumped 6%+ after a Bank of America upgrade, with analysts arguing the stock trades at its “lowest multiple in 10 years” despite a strong payments moat. [25]
- The move helped power the Dow’s advance and illustrated a broader rotation into payment and financial infrastructure names.
- Cruise lines:
- Royal Caribbean (RCL) surged 7–8%, aided by a $2 billion share buyback and a new $1 dividend, while Carnival (CCL) and Norwegian Cruise Line (NCLH) gained around 6–7% as the group rides a demand and balance‑sheet recovery. [26]
- Healthcare & obesity drugs:
- Eli Lilly (LLY) climbed about 2–3% after reporting that its next‑generation obesity drug delivered up to ~24–29% weight loss in a late‑stage trial and eased knee‑arthritis pain in obese patients. [27]
- Defensives and industrials:
- Healthcare, consumer defensives and industrials were identified by OANDA’s MarketPulse and other strategists as leading today’s rebound—classic beneficiaries of rate cuts and lower funding costs. [28]
On the flip side:
- AI & semiconductors (NVDA, AVGO, MRVL, ARM),
- Ad‑tech (Trade Desk), and
- some REITs (e.g., Welltower)
featured on top‑loser lists, underscoring how much investors are rotating within equities rather than leaving the market entirely. [29]
AI Euphoria Meets Valuation Reality
A recurring theme in today’s commentary is “AI fatigue” or at least AI scrutiny.
Several analyses, including from MarketPulse, the Wall Street Journal and Seeking Alpha, framed today as a moment where: [30]
- AI‑linked capex is no longer automatically bullish.
Higher spending without clear margin uplift is now seen as a risk, not just a sign of aggressive growth. - Valuation risk is front and center.
Stifel’s 2026 outlook notes that “P/E doesn’t matter…until it’s the only thing that matters,” warning that speculative assets have already begun to tumble and advising investors to hedge Big Tech with defensive sectors like healthcare, staples and even gold. [31] - Oracle is the current test case.
Its huge cloud and GPU investments—funded partly with rising debt and driving negative free cash flow—illustrate the trade‑off between owning the AI infrastructure and keeping shareholders comfortable with leverage and cash generation. [32]
At the same time, bullish AI narratives haven’t disappeared:
- Oracle’s cloud and GPU‑related revenues grew at triple‑digit rates in some categories, with total cloud revenue up 34% year-on-year and now 50% of Oracle’s total revenue. [33]
- Major customers like Meta and Nvidia are locking in tens of billions in long‑term AI‑infrastructure contracts.
The market message today isn’t “AI is dead”—it’s “AI has to prove itself in earnings, not just in slide decks.”
Big‑Picture 2026 Forecasts: Optimism, But With a Speed Limit
Beyond today’s moves, several high‑profile outlooks dropped or circulated on Thursday, giving investors a sense of where strategists think the S&P 500 could go from here:
- Fundstrat’s Tom Lee sees the S&P 500 rallying to 7,700 in 2026, arguing that the “wall of worry” has turned into a tailwind, and that a new, more dovish Fed chair could fuel a second leg of the bull market. [34]
- Vanguard’s 2026 outlook is more cautious:
- Base‑case U.S. equity returns of about 4–5% a year over the next 5–10 years
- AI bull‑case: 8–10% annual returns
- AI bear‑case: –2% to +2% annual returns, with a risk of “anemic growth reminiscent of the decade after the 2008 financial crisis.” [35]
- Stifel maps out 2026 S&P 500 scenarios with about +9% upside versus –5% downside, flagging labor‑market fragility and valuation risk, and recommending hedging Big Tech with defensive growth/value sectors. [36]
Taken together, the message from the Street is: the bull market can continue, but forward returns are likely to be slower, more selective, and more dependent on earnings growth than multiple expansion.
Other Notable Corporate Stories Driving Sentiment
A few high‑profile stock stories also colored today’s tone:
- Disney (DIS) x OpenAI:
Disney is investing $1 billion in OpenAI under a three‑year licensing deal that will let more than 200 Disney, Marvel, Pixar and Star Wars characters be used in AI‑generated images and short‑form videos. Disney shares gained roughly 1–2% as CEO Bob Iger described the deal as giving Disney “a way in” to AI and a new channel to reach younger audiences. [37] - Planet Labs (PL):
The satellite‑imaging company’s stock soared more than 30% after reporting stronger‑than‑expected results, showing that investors are still willing to reward clear earnings beats in high‑growth niches. [38] - Retail & consumer names:
Oxford Industries (Tommy Bahama, Lilly Pulitzer) and Vera Bradley plunged more than 20% each after citing softer holiday demand and value‑driven shoppers—an important signal that consumer discretionary spending remains uneven. [39]
What Today’s Market Action Means for Investors
From an after‑the‑bell perspective, the December 11, 2025 session tells a few clear stories:
- The bull market is intact, but it’s no longer one‑dimensional.
- Dow and S&P 500 hitting record closes while the Nasdaq falls shows investors broadening out beyond mega‑cap tech rather than abandoning equities. [40]
- AI is shifting from “story” to “spreadsheet.”
- Oracle’s plunge, despite superb top‑line growth, is a reminder that debt‑funded AI capex must eventually translate into cash flows to keep investors happy. [41]
- Macro data still broadly supports risk assets—for now.
- A seasonally noisy spike in jobless claims, a shrinking trade deficit and a fresh Fed cut together paint a picture of an economy that is slowing but not breaking, giving the Fed room to stay supportive. [42]
- Strategists are dialing back return expectations.
- From Vanguard’s single‑digit forecasts to Stifel’s modest upside scenarios, the consensus is drifting toward a “grind higher” market rather than another melt‑up, even if outliers like Tom Lee see room for a much bigger run. [43]
For traders and long‑term investors alike, today’s close reinforces a simple theme:
This is no longer a market where you can own “AI” generically and call it a day. Positioning, valuation and cash‑flow visibility now matter as much as the growth story.
This article is for informational purposes only and does not constitute investment advice, financial planning, or a recommendation to buy or sell any securities. Always do your own research or consult a licensed financial professional before making investment decisions.
References
1. finance.yahoo.com, 2. www.reuters.com, 3. finance.yahoo.com, 4. finance.yahoo.com, 5. finance.yahoo.com, 6. www.investopedia.com, 7. www.marketpulse.com, 8. www.cheddar.com, 9. www.cheddar.com, 10. www.nasdaq.com, 11. www.nasdaq.com, 12. www.cheddar.com, 13. www.cheddar.com, 14. www.investopedia.com, 15. 247wallst.com, 16. www.investopedia.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.montanarightnow.com, 21. www.investopedia.com, 22. www.reuters.com, 23. www.cheddar.com, 24. 247wallst.com, 25. 247wallst.com, 26. 247wallst.com, 27. 247wallst.com, 28. www.marketpulse.com, 29. www.investing.com, 30. www.marketpulse.com, 31. www.investing.com, 32. www.nasdaq.com, 33. www.nasdaq.com, 34. 247wallst.com, 35. www.investopedia.com, 36. www.investing.com, 37. www.investopedia.com, 38. www.cheddar.com, 39. www.cheddar.com, 40. finance.yahoo.com, 41. www.nasdaq.com, 42. www.reuters.com, 43. www.investopedia.com
