After Punishing Plunge, Tech Up Before Jobs Data

Published as of: December 15, 2025, 9:15 a.m. ET

(Monday market open) The final pre-holiday week opens with stocks rebounding from Friday's swoon, led by tech names like Nvidia (NVDA) and Broadcom (AVGO). A "Santa Claus" rally is no guarantee after the recent rotation out of tech stocks, and coming days are packed with market-moving data—arguably none more critical than tomorrow's November U.S. nonfarm payrolls report. 

Analysts think the U.S. added 30,000 jobs in November with unemployment stable at 4.4%, according to a Briefing.com consensus. Other key metrics to watch at 8:30 a.m. ET Tuesday include wage growth and workforce participation after the recent rise in layoffs. If the report shows more strength than expected, it might re-ignite inflation concerns. Later this week come rate decisions from the European Central Bank (ECB) and the Bank of Japan (BOJ), along with U.S. inflation data. Earnings also get in under the wire with chip maker Micron (MU) and Nike (NKE) due Wednesday and Thursday before corporate news quiets the final two weeks of the year. FedEx (FDX) also shares results Thursday.

A central question this week is whether rotation continues out of tech into cyclical sectors like small-caps, financials, materials, and industrials. Oracle (ORCL) and Broadcom retreated Friday as concerns about debt-driven AI spending persisted, capsizing the tech-heavy Nasdaq after the S&P 500^® index, Russell 2000 (RUT), and Dow Jones Industrial Average forged record closes Thursday. A jump in Treasury yields also spooked Wall Street, though yields eased today. "Markets have been contending with the backdrop of a firm U.S. economy, a cooperative Fed, bullish seasonality, and a healthy broadening of the rally versus concerns around AI and potentially higher long-term yields," said Nathan Peterson, director of derivatives research and strategy, Schwab Center for Financial Research (SCFR).

1. Yields loom over rotation trade: The recent cyclical and small-cap rally reflects a rotation out of tech but faces a headwind from rising long-term yields. Despite three recent Federal Reserve rate cuts, the 10-year Treasury note yield traded at 4.16% early today—up more than 15 basis points from recent lows—amid inflation and U.S. debt worries. It also reflects concerns about rising rates abroad. "Central banks in the rest of the world are leaning more hawkish, while the Fed rate cutting cycle isn't over," said Michelle Gibley, director of international equity research and strategy, SCFR. "The BOJ is expected to hike rates this week. Fed policy is in contrast to fewer rate cuts elsewhere, which could weaken the dollar and boost international stock returns." Any sign of future hawkish moves in the BOJ's commentary might hurt U.S. Treasuries, which move opposite of yields.. Some of last week's U.S. yield rise might have partly built in the BOJ move, however. Several Fed speakers this week could help set direction for Treasuries, starting with Governor Stephen Miran and New York Fed President John Williams in separate events later this morning. Also, the Treasury auctions sets of 3-month and 6-month bills at 11:30 a.m. ET.
    
2. Valuation check: While the S&P 500 index remains historically high from a valuation standpoint, the momentum-indicating Relative Strength Index (RSI) was around 60 on Thursday. That's below the 70 typically seen as overbought. Also, the 12-month forward price-to-earnings ratio (P/E) for the S&P 500 of 22.5, according to FactSet, hasn't moved much over the last few months. Investors may worry about valuations, but they're seldom the sole reason why stocks fall. "Perhaps that means the better way to think about high valuations is that they make the market more vulnerable to shocks," write my colleagues Kevin Gordon, head of macro research and strategy, and Liz Ann Sonders, chief investment strategist, SCFR, in their latest outlook. "Higher multiples are generally consistent with optimistic (and at times, euphoric) sentiment, so skittishness tends to kick in at a more aggressive pace when negative news hits the wires. Since we're in an environment of elevated multiples and sentiment—with policy risk not subsiding anytime soon—the bar for a pullback or mini correction in the beginning of 2026 is not terribly high."
    
3. Breadth improves as rotation out of tech advances: In a sign of increasing interest beyond the top few names, the percentage of S&P 500 stocks trading above their 50-day moving averages soared above 57% by Friday from Tuesday's 47%. Seeing this happen even as the index fell for the week demonstrates how the biggest names remain under pressure even as hundreds of stocks improve. At one point Friday, more than 300 S&P 500 stocks were up even with the index down 0.45%. Generally, it's healthy to see improving market breadth, and the S&P 500 Equal Weight Index (SPXEW) is more reflective of what the other 490 stocks are doing outside of the "Magnificent Seven" and a few other giants like Broadcom. The equal-weight index weighs all components the same rather than by market cap, and it broke out above technical resistance Friday, my colleague Peterson noted in his Weekly Trader's Outlook. The small-cap Russell 2000 led all major indexes last week with a 1.19% rise, another sign of interest expanding beyond the big names. Generally, last week looked pretty good aside tech, though rising yields could slow gains for rate-sensitive small caps.

Broadcom clawed back 0.6% early today after falling 11% on Friday. Broadcom's performance following Oracle's (ORCL) plunge on Thursday fit into theories that investors are shifting their focus beyond tech amid growing AI spending worries. 

Nvidia's shares launched a comeback attempt in pre-market trading, up 1.2%, after a nearly 4% slide last week toward the December lows. Shares haven't had much traction so far in December despite news that Nvidia will be allowed to sell its H200 chips in China. Nvidia has told some Chinese clients that it's evaluating adding production capacity for its H200 AI chips after orders exceeded its output levels, Reuters reported.

Semiconductor firms mostly rose early this morning, including Advanced Micro Devices (AMD), Palantir (PLTR), Micron (MU), Marvell Technology (MRVL), and Super Micro Computer (SMCI). Despite Friday's massive 5% plunge in the PHLX Semiconductor Index (SOX), the index remains slightly up for the month and up more than 30% over the last year. In sector news, Wedbush raised its price target for Micron, and Jefferies and Wells Fargo both raised their price targets for Applied Materials (AMAT).

There were several downgrades in tech this morning, including KeyBanc downgrading Adobe (ADBE) to underweight from sector weight and downgrading ServiceNow (NOW) to underweight from sector weight. Goldman Sachs downgraded Texas Instruments (TXN) to sell from buy and downgraded Arm (ARM) to sell from neutral. Shares of Adobe, Texas Instruments, and Arm all sank in pre-market trading.

Tesla (TSLA) made 1.3% early gains today following Wedbush reiterating its outperform rating and $600 price target. The firm believe 2026 will be a pivotal year for Tesla, with autonomous driving and robots taking center stage and the U.S. rollout of Cybercabs starting in spring.

Intel (INTC) climbed 1.3% ahead of the open. The company is in discussions to acquire AI chip startup SambaNova for $1.6 billion, according to Bloomberg.

Marriott (MAR) and Las Vegas Sands (LVS) rose 1% and 3%, respectively, ahead of the open following upgrades from Goldman Sachs, which expects a "mixed" 2026 for gaming and lodging.

Despite what generally appeared to be more of a "risk-on" environment early today, Bitcoin futures (/BTC) slid 0.7% to below $90,000, a level it hasn't closed below in over a week. Though bitcoin fell, shares of several crypto-related stocks rose slightly to start the week.

Metals prices continued their epic rise today, with gold close to the October all-time highs. This could reflect the weak dollar or worries about inflation.

The Cboe Volatility Index (VIX) popped 2.6% this morning after dipping to nearly three-month lows last week. The slight increase in volatility could reflect nerves ahead of tomorrow's jobs data, with some "whisper numbers" for headline jobs growth falling below 20,000. A poor jobs reading might also add to recent pressure on the dollar, which is also trending lower today.

The major indexes were mixed last week with the S&P 500 index down 0.6% while the tech-heavy Nasdaq 100 (NDX) fell 1.9%. The DJIA rose 1.1%.

Technically, the 50-day moving average has been an important support point for the S&P 500 index and currently rests at 6,761.

The Russell 2000 small cap index (RUT—candlesticks) rose more than 1% last week and is up nearly 6% over the last month, well ahead of the Nasdaq 100 (purple line) that fell 1.26% since mid-November as AI stocks sagged. However, the 10-year Treasury yield (blue line) has risen 4% since a month ago, and the Russell 2000 traded well below current levels the last time yields rose this high.