Stock Market Today: IXIC and S&P 500 (INDEXSP:.INX) Push Toward Record Highs as AVGO, TSLA, and WMT Outperform

Market Overview: Indices Push Toward Record Highs Ahead of Fed Decision

U.S. markets are entering the second week of December 2025 with momentum across all major benchmarks as investors position for the Federal Reserve’s final meeting of the year. The Nasdaq Composite rose 0.9%, outperforming both the S&P 500, which advanced 0.3%, and the Dow Jones Industrial Average, which added 0.5%. The Russell 2000 small-cap index gained 0.8%, showing renewed appetite for cyclical and value names. The 10-year Treasury yield climbed to 4.14%, while U.S. crude (CL=F) rebounded 2.6% to $60.08 per barrel, supporting energy equities. Traders are largely expecting the FOMC to cut rates for a third straight time, reducing the federal funds range to 3.5%–3.75%, while Chair Jerome Powell is set to outline the path toward 2026. The Invesco S&P 500 Equal Weight ETF (RSP) reached an all-time high before paring gains, showing the rally’s broad base.

AI Market Rotation: Alphabet Surges as OpenAI-Linked Stocks Lose Steam

Sentiment in the artificial intelligence sector shifted sharply as investors favored profitable, scalable leaders over high-burn speculative players. Alphabet Inc. (NASDAQ:GOOGL) has emerged as the dominant name following strong adoption of its Gemini AI platform, sending its stock higher to new 52-week highs around $319.80. The rotation away from OpenAI (OPAI.PVT) intensified as concerns grew over its profitability and cash burn. Companies deeply tied to OpenAI, such as Oracle (NYSE:ORCL), Advanced Micro Devices (NASDAQ:AMD), and Microsoft (NASDAQ:MSFT), saw declines. Oracle remains pressured by rising leverage from its AI infrastructure buildout, while AMD and Microsoft continue to face volatility amid OpenAI’s slower momentum. By contrast, Alphabet’s ecosystem—including Broadcom (NASDAQ:AVGO), Lumentum (NASDAQ:LITE), and Celestica (NYSE:CLS)—has rallied, with Alphabet-linked stocks up 146% year-to-date compared to 74% for OpenAI-linked names. The divergence marks a clear revaluation in the AI trade: cash flow, scalability, and product leadership now outweigh hype.

Corporate Earnings Focus: Tech and Retail Leaders Dominate the Week

Investors are preparing for a dense earnings calendar with major updates from Broadcom (AVGO), Oracle (ORCL), Adobe (NASDAQ:ADBE), Costco (NASDAQ:COST), and AutoZone (NYSE:AZO). Broadcom’s report on Thursday is expected to show quarterly revenue above $12.5 billion, driven by AI chip demand from Google’s data centers. Oracle, reporting Wednesday, will attempt to restore investor confidence following its November slide linked to debt expansion. Adobe’s earnings, also due Wednesday, will give critical insight into the strength of its AI software subscriptions, with expectations of 5–6% sequential growth despite the stock’s recent 8% pullback. Costco’s Thursday results will highlight tariff effects and could reignite volatility following its lawsuit against the Trump administration. Lululemon (NASDAQ:LULU), Ciena (NASDAQ:CIEN), and Netskope (NASDAQ:NTSK) round out the week, providing key signals for discretionary spending and retail tech performance.

Outperforming Stocks: Tesla, Comfort Systems, Vertiv, and JPMorgan Lead

Several names broke out of consolidation zones last week, signaling strong institutional participation. Tesla (NASDAQ:TSLA) surged 5.8% to $454.94, clearing the 50-day moving average after Elon Musk’s FSD v14.2.1 rollout renewed enthusiasm for the company’s autonomous software. Comfort Systems (NYSE:FIX) gained 2.5% to $1,001.48, supported by data center infrastructure demand and S&P 500 inclusion. Vertiv Holdings (NYSE:VRT) rose 5.1% to $189.02, extending gains on strong AI-related energy solutions despite its S&P 500 exclusion. JPMorgan Chase (NYSE:JPM) advanced 0.6% to $315.04, reclaiming its 10-week average, while Penumbra (NYSE:PEN) reached $300.66, testing a breakout above $301.01. The combination of industrial, financial, and AI infrastructure strength points to expanding leadership breadth, with both growth and cyclical names gaining traction simultaneously.

Emerging Growth Leaders: Credo Technology, MongoDB, and Walmart

Credo Technology (NASDAQ:CRDO) posted exceptional 272% year-over-year revenue growth in Q2 FY2026, with strength across hyperscaler customers. Analysts estimate a $10 billion total addressable market and project earnings of $10–11 per share at a 45% net margin, supported by growing adoption of its AEC product line across four major data center clients. MongoDB (NASDAQ:MDB) rallied after delivering 30% Atlas revenue growth and a 750-basis-point operating margin beat. Management raised its fiscal-year operating margin outlook to 18% from 14%, citing robust customer additions exceeding 2,600 in Q3. Walmart (NYSE:WMT) continued to outperform traditional retail peers, rising toward $122, with analysts setting a new $130 price target. Its AI-driven logistics and ChatGPT-powered shopping tools have improved margins and e-commerce engagement, reinforcing its position as a technology-integrated retailer rather than a legacy chain.

Macro Outlook: Fed Rate Cut and Economic Positioning

All eyes remain on the Federal Reserve’s final 2025 meeting. Markets expect the Fed funds rate to be reduced to 3.5%–3.75%, the third cut of the year, signaling a full pivot from tightening to sustained accommodation. With delayed economic reports from the government shutdown, Powell’s guidance will carry outsized importance. A dovish tone could strengthen the rally in small caps (Russell 2000) and financials, while any hesitation could trigger a brief rotation out of high-valuation tech. The Fed’s assessment of inflation near 2.9% year-over-year, jobless claims around 235,000, and GDP growth trending at 1.6% will define investor positioning through year-end.

Technical and Strategic Market Positioning

The S&P 500 trades near 5,278, approaching record resistance at 5,300, while the Nasdaq 100 eyes the 17,200 level. The Dow Jones has regained momentum, hovering near 39,400, buoyed by industrial strength and financial resilience. The breadth of leadership—from semiconductors to banking and retail—reflects durable risk appetite. Short-term volatility around the Fed announcement is expected, yet fundamentals suggest continued upward bias into Q1 2026. Based on multi-sector performance, rate outlook, and earnings visibility, the market stance remains bullish, with Buy ratings on AVGO, TSLA, CRDO, WMT, and MDB, Hold on ORCL and MSFT, and a neutral stance on ADBE until confirmation of margin recovery. Markets are preparing for a decisive close to 2025, where disciplined exposure and stock selection will determine who outperforms in the coming cycle.

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