December 5, 2025
S&P futures are up 0.2% after U.S. equities finished mostly higher on Thursday but closed below their intraday highs. The S&P 500 rose for a third straight session and now sits less than 0.5% from its record peak, while small caps continued to squeeze higher, leaving the Russell 2000 up more than 1% this week. Asian trading was mostly positive overnight with South Korea and Greater China leading and Japan down just over 1%. Europe opened modestly higher (~0.3%). Treasuries are unchanged to slightly weaker, the dollar is off 0.1%, gold is up 0.3%, Bitcoin futures are down 0.9%, and WTI crude is off 0.3%.
The week is ending quietly, consistent with the broader theme of limited directional catalysts and more action beneath the surface. Markets remain in a holding pattern ahead of next week’s FOMC decision and a cluster of major AI catalysts, including AVGO and ORCL earnings and the launch of OpenAI’s next model. Key narratives this week included a continued retreat in volatility, a notable small-cap squeeze, mild upward pressure on rates into the Fed, rising conviction around Hassett as the next Fed Chair, a solid but bifurcated start to the holiday shopping season, mixed labor-market signals, ongoing AI disruption headlines, the WBD bidding saga, and CTA flows flipping from a headwind to a tailwind.
Company highlights:
- WBD entered exclusive negotiations with NFLX for studio/streaming assets.
- HPE revenue missed as enterprise and sovereign customers pushed out deals and government spending softened.
- IOT delivered better-than-expected ARR growth with strength across enterprise, broader product categories, and margins.
- RBRK surged on another beat-and-raise quarter.
- DOCU posted a Q3 beat but early renewals masked underlying growth concerns.
- S fell after a softer guide and CFO transition.
- ULTA rallied on a beat-and-raise and upbeat early holiday commentary.
- COO results were overshadowed by a strategic review announcement.
- TTAN posted positive takeaways on commercial and Pro momentum, usage-revenue traction, GTV acceleration, and easing HVAC concerns.
On the macro front, markets await this morning’s September PCE, personal income/spending, and the preliminary December Michigan sentiment and inflation expectations. Core PCE is expected to rise 0.2% m/m, pushing y/y inflation down to 2.8%. Michigan sentiment is expected to tick up to 52.0, while long-run inflation expectations are seen edging down to 3.3%. Looking ahead to next week, the Dec 10 FOMC decision is the main event, with markets pricing an ~87% chance of another 25 bp cut. Additional releases next week include NY Fed inflation expectations, NFIB small-business sentiment, JOLTS, and $119B in new Treasury issuance.
U.S. equities were narrowly mixed on Thursday (Dow –0.07% · S&P 500 +0.11% · Nasdaq +0.22% · Russell 2000 +0.76%0, with the S&P 500 and Nasdaq edging higher and small caps again outperforming. Trading remained choppy and largely directionless as investors continued to digest a heavy flow of earnings, sell-side conference headlines, and micro-driven dispersion beneath the surface. The macro backdrop changed little, with Treasury yields rising 3–5 bp in a flattening move, the dollar modestly firmer after seven straight down sessions, gold fractionally higher, Bitcoin slightly weaker, and crude up 1.2%.
The market tone remains one of cautious waiting ahead of next week’s AI catalysts (AVGO, ORCL, OpenAI model launch) and the final FOMC decision of the year. Investors still expect a 25 bp rate cut, though the policy statement and dot-plot guidance may matter more than the move itself. Labor-market readings delivered mixed signals as initial jobless claims hit their lowest level since September 2022 while Challenger job-cut announcements climbed to their highest since 2020. Consumer trends remain healthy at the high end but increasingly bifurcated. Factory orders came in slightly below expectations, and markets are now focused on Friday’s PCE, income/spending, and Michigan sentiment releases.
Sector Highlights
Cyclical leadership continued, with Industrials (+0.51%), Tech (+0.43%), Communication Services (+0.41%), Energy (+0.38%), and Financials (+0.24%) outperforming. Defensive and consumer-linked sectors lagged, led by Healthcare (–0.73%), Consumer Staples (–0.73%), Consumer Discretionary (–0.48%), and Materials (–0.48%), while Utilities and Real Estate posted modest declines. Rotation remained firmly tilted toward small caps, high beta, value, and AI-adjacent themes.
Information Technology
- PATH +24.4%: Strong Q3 beat across revenue, margins, operating income; ARR and net-new ARR ahead; guidance implies best ARR growth in ~3 years.
- DSGX +14.4%: Beat on EBITDA/EPS/revenue; Q4 guidance ahead; upgraded to Outperform at Raymond James.
- SNOW –11.4%: Q3 ahead with FY26 raised, but concerns about Product revenue deceleration and less-robust beat vs prior quarters.
- CRM +3.7%: NNAOV growth exceeded AOV growth for first time since FY22; upbeat Agentforce commentary despite ongoing AI-competition concerns.
- GWRE: FQ1 ahead; raised FY26 guide on strong cloud momentum.
- MNDY +1.5%: Initiated Buy at Guggenheim on AI-driven upside.
- SYM –17.4%: 10M-share offering (3.5M from SoftBank).
- FAST +1.3%: November sales +6.2% y/y.
Communication Services
- META +3.4%: Plans to cut metaverse budget by up to 30% next year; broader 2026 cost cuts; hired Apple design leader Alan Dye.
- NFLX –4.9%: Reported to be the leading bidder for WBD assets with an ~85% cash offer.
- WBD: Still in play as PSKY doubled breakup fee to $5B.
- Anthropic/SNOW: Announced $200M LLM partnership.
- Google Cloud/Replit collaboration announced.
Consumer Discretionary
- DG +14.0%: Q3 beat and raise with strong traffic and margin improvement.
- FIVE: Strong >14% comp; tariff mitigation; solid holiday start.
- PVH –11.9%: Q3 beat overshadowed by margin pressure and softer Q4 outlook despite raised FY EPS floor.
- AEO: Continued strength after Wednesday’s strong results.
- COST –2.9%: November comps +6.4% vs +6.9% est.; some early-month drag from shutdown.
- JBLU –1.3%: Initiated Sell at Citi.
Consumer Staples
- KR –4.6%: Missed on revenue/comps; narrowed FY comp range; sees e-commerce turning profitable in 2026.
- HRL +3.8%: EPS and operating income beat; stable top-line trends.
- HALO –2.6%: Downgraded to Sell on long-term concerns about Enhanze durability.
Healthcare
- VKTX +8.9%: Benefited from reports of potential FDA shift toward single-study approvals in some cases.
- HIMS +8.0%: Expanded into Canada via Livewell acquisition.
- ACHC –10.9%: Further guidance cut tied to higher PLGL costs.
Industrials
- DCI +7.5%: Beat across EPS/revenue; raised full-year EPS guidance.
- SAIC: EPS beat with raised full-year outlook.
Financials
- MS: Exploring data-center exposure reduction; moneycenter and investment banks broadly firmer.
Real Estate / Materials
- No major corporate developments; modest weakness in both sectors tied to rates and metals.
Eco Data Releases | Friday December 5th, 2025
S&P 500 Constituent Earnings Announcements | Friday December 5th, 2025
No constituents report today
Data sourced from FactSet Research Systems Inc.
