Weekly Roundup Dec. 8-12
RATE CUT | VIEWS ON AI MARKET | KEY MARKET MOVERS
By: Lorenzo Alfonso
Dec. 14, 2025
Market Snapshot:
S&P500: -0.28% | Russell 2000: 1.05% | Dow Jones: 1.23% | Oil (WTI): -6.08% | Gold: 4.34% | VIX: -8.22% | 10 yr Treasury Yield: 4.186%
The Economy Glance
As we said last week, we were watching for the Federal Reserve policy committee to vote to make a rate cut on Wednesday. They lowered the target range by 25 basis points (0.25%) to 3.50%–3.75%.
Then on Thursday, the Labor Department reported that applications for unemployment benefits for the week ending December 6th totaled 236,000, an increase of 44,000 from the prior week’s level. Job openings were about 7.67 million in October, roughly unchanged from September and at a five-month high.
What Moved Markets?
Of course, the rate cut influenced markets this past week. Markets closed mixed after the announcement, with the S&P 500 closing slightly lower and the Dow Jones slightly higher.
The Trump administration approved exports of NVIDIA’s H200 chips to China, a move facing political scrutiny. This could maximize profits but also raises a national security risk.
Paramount/Skydance launched a hostile bid valued at around $108B for Warner Bros. Discovery, challenging Netflix’s deal, with the board having 10 business days to respond. This means that, instead of needing Warner Bros. board to accept their offer, the shareholders of the company will decide, as they came in with an increasingly large offer of $108 billion. Warner Bros. has 10 days to offer a recommendation on the deal, but again board approval is not required.
AI Bubble and Concerns
Still, with the Federal Reserve cutting interest rates, tech valuations are in focus. The tech-heavy Nasdaq fell this past week, partly on concerns from Oracle and Broadcom. Oracle, which has been the recent hype with AI given its large data-center influence, announced quarterly revenue that fell short of estimates.
Across the market, policymakers and analysts flagged high valuations and extreme concentration in AI among these large names. The fear of missing out could be a driving force in the market rally.
We are beginning to see which companies have realistic cash flows coming in, such as key chip suppliers, and which have AI stories that are mostly promises. They are now getting punished when they merely meet expectations.
Michael Burry, investor and founder of Scion Asset Management
Burry accurately predicted “The Big Short,” which summarized his prediction of the housing crash of 2007, and he is now betting against this AI market, specifically against NVIDIA and Palantir, which we have spoken about a couple of weeks ago.
Joseph Briggs, economist at Goldman Sachs’ Global Economics Research
The flood of multibillion-dollar investments pouring into U.S. AI infrastructure is sustainable, pushing back on mounting concerns that the sector’s spending spree could be overheating, Briggs said in a note on October 16.
While the overall macroeconomic case for AI investment remains strong, he cautioned that “the ultimate AI winners remain less clear,” with fast technological change and low switching costs potentially limiting first-mover advantages.
Looking ahead
We will see how the equity and bond markets digest the Federal Reserve rate cut this week and how they predict the 2026 outlook for rates.
The government’s November jobs report is scheduled for December 16th, and this will be reflected in the markets this week as well.
We will keep an eye on the AI companies and how they respond to the markets with the new interest-rate cut as well.
Study hard for finals this week Rams!
Terms in this article
Initial vs. continuing claims: New applications for unemployment benefits vs. the number of people still receiving them. (Week ended Dec 6: 236k initial; ~1.84M continuing.)
Job openings (JOLTS): Count of open positions; ~7.7M in October, a five-month high.
Ten-year Treasury yield: Interest the U.S. pays to borrow for 10 years; mortgage and loan rates often move with it.
Basis point: One one-hundredth of a percent (0.01%); 25 bps = 0.25 percentage point.
CME FedWatch: Public tool that turns futures prices into probabilities for the next rate move.
Hostile bid: An acquisition offer made directly to shareholders without the target board’s support; boards typically have ~10 business days to recommend for/against.
Data-center revenue (tech): Sales tied to chips/servers that train and run artificial-intelligence models.
Margin pressure: When costs rise or prices fall enough to shrink the profit percentage on each dollar of sales (Broadcom flagged this for AI systems).
