Fed Chatter, Micron, CPI in View as Stocks Edge Up

Published as of: December 17, 2025, 9:12 a.m. ET

(Wednesday market open) There's no sign of Santa Claus yet on Wall Street after three straight losing sessions for the S&P 500 index and a somewhat gloomy jobs report. The traditional "Santa Claus rally" theoretically occurs the last five sessions of the old year and first two of the new year, meaning there's still time. It's unclear if Tuesday's sudden pop in tech after weeks of rotation out of that sector has traction but today might provide clues as major indexes rose modestly overnight, led by several tech names.

Chipmaker Micron (MU) reports after the close today, followed by FedEx (FDX) and Nike (NKE) late tomorrow. FedEx and Nike provide a look at consumer demand after a mixed October retail sales report Tuesday found evidence of resilient shoppers. Other possible catalysts include rate decisions tomorrow and Friday from the European Central Bank (ECB) and Bank of Japan (BOJ). Analysts expect the ECB to hold rates steady and the BOJ to hike. Back home, Federal Reserve Governor Christopher Waller—a possible candidate for Fed chairman—told CNBC today the labor market is soft but could rebound next year and that the Fed can continue lowering rates at a moderate pace.

In trading yesterday, Wall Street wavered after nonfarm payrolls showed unemployment at 4.6%, the highest since 2021, and underwhelming jobs growth. Though the broader market fell, the Nasdaq rose as downtrodden shares of Nvidia (NVDA), Oracle (ORCL), and Broadcom (AVGO) found buyers. Thursday's November Consumer Price Index (CPI) is the next major economic reading, at 8:30 a.m. ET. Analysts expect headline and core CPI to each rise 0.3% in November, with core excluding food and energy, according to Briefing.com. That compares with 0.3% and 0.2% in September and a goose egg in October when the government was shuttered and didn't collect data. Waller doesn't expect inflation to re-accelerate, and Treasury yields slipped slightly after his comments while the dollar rose.

1. Fed takes a bow after weak data follow rate cut: Yesterday's mostly underwhelming U.S. jobs data helped make the Fed's rate cut last week look prescient. In terms of future cuts, however, the Fed anticipates only one in 2026 while market participants build in two to three. October and November jobs data likely won't be the final arbiter, due to the shutdown's effect on collection. "The data are very noisy, but on balance it looks like the labor market is still softening," said Kathy Jones, chief fixed income strategist, Schwab Center for Financial Research. "Average hourly earnings continue to edge lower on a year-over-year basis." Yesterday's data weren't a slam dunk for more rate cuts, as October "control group" retail sales—which factor into gross domestic product (GDP) and exclude auto dealers, food services, building materials stores, and gas stations—rose 0.8%, the highest in four months. This may be a reason long-term Treasury yields remain elevated after the jobs data. The Fed doesn't want to "cut" the economy into more inflation, and heavy shopping combined with lower rates might be a formula.
    
2. Despite weak car sales, automaker stocks up: Americans drove less last year on a per-capita basis, and October's retail sales report might have underscored that trend. Retail sales were flat month over month, mainly on weakness in the automobile sector, extending a pattern from prior reports. Stalling auto sales clash with trends on Wall Street, where General Motors (GM) and Ford (F) enjoy solid 2025 gains. Ford climbed again yesterday after announcing a retreat from its aggressive EV strategy. November U.S. auto sales fell 1% from October and 8% from a year ago, according to S&P Global. New vehicle sales are seen at 16 million in 2026, roughly steady, according to Edmunds.com. Affordability remains a big barrier, Edmunds said, but inventory, pricing, and the days it takes for a car to sell have stabilized. Long-term interest rates remain high and may be a headwind.
    
3. 2025 clock running out on crypto legislation: The year 2025 will likely come and go without passage of the legislation needed to realize President Trump's dream of making the U.S. the "crypto capital of the world." The crypto industry and crypto investors had hoped Congress would pass a market-structure bill this year but Republicans and Democrats are still hashing out core elements, including who will regulate digital assets (the Commodity Futures Trading Commission or the Securities and Exchange Commission), how customer funds will be handled, and ethics rules on public officials profiting from the industry. The Senate Banking Committee targets the week of January 12 for a committee vote but there's still much to be negotiated, said Michael Townsend, managing director, legal and government affairs at Schwab. Any bill would still need to pass the full Senate and be reconciled with the House version, passed in July, making passage during the next quarter plausible but not a slam dunk, Townsend added.

Micron climbed 2.4% in early trading ahead of its earnings after the close. Last time out, Micron exceeded Wall Street's earnings expectations and delivered solid guidance, sending shares higher. The company makes memory and storage components for computers, a business that's benefitted from AI because high-end AI chips require high-bandwidth memory, a market Micron serves.

AI-related stocks including Marvell (MRVL), CoreWeave (CRWV), Arm Holdings (ARM) and others rose 1% or more early Wednesday after the semiconductor space fell Tuesday. However, market leader Nvidia (NVDA) fell slightly and remains flat for the month after a losing November.

The slight chip rally this morning came after Bloomberg reported that Amazon (AMZN) is in talks to invest more than $10 billion in OpenAI and supply its chips. Shares of Amazon rose 1.3% ahead of the open.
 

Warner Brothers Discovery (WBD) fell 1.2% before the open after the company's board urged shareholders to reject Paramount Skydance's (PSKY) bid due to concerns about financing and other terms, Barron's reported. This could help clear the path for Netflix (NFLX) to nab WBD with its $72 billion offer, Bloomberg said. Paramount Skydance fell 2% on the news early Wednesday while Netflix rose nearly 2%.
 

Lennar (LEN) fell nearly 5% ahead of the open following what investors saw as disappointing first quarter guidance from the home building firm. Fourth quarter results exceeded consensus for revenue but missed on the bottom line. Competing home builder stocks also fell.
 

Tesla (TSLA) climbed 3% to new record highs Tuesday amid excitement over robotaxis, CNBC reported.
 

Gap (GAP) resumed its climb early today, up another 3%, after upgrades from analysts at Baird and Telsey. Baird cited the company's turnaround momentum and cyclical tailwinds.
 

Pfizer (PFE) dropped 3.4% Tuesday after releasing guidance that appeared to disappoint investors. Health care was among the worst sector performers Tuesday, also hurt by a 6% drop in Humana (HUM) that came after the U.S. House of Representatives said it won't vote on an extension of Affordable Care Act subsidies.
 

Crude oil futures (/CL) climbed this morning on news that the Trump administration plans to block sanctioned oil tankers going into and out of Venezuela. Exxon Mobil (XOM) and Chevron (CVX) both rose nearly 1% early Wednesday.
 

Bitcoin futures (/BTC) remained under pressure early Wednesday, falling almost 1% before clawing back slightly, holding above lows seen earlier this week. Crypto-related names in the stock market were mixed.
 

As of this morning, chances of a Fed rate cut next month were 22% according to the CME FedWatch Tool, unchanged from before the jobs report. The market works in better chances of a rate cut at the Fed's March meeting.

What is a Trump Account? A Trump Account is a new tax-advantaged investment account for children sponsored by the U.S. government and could give families a new way to save for their children's futures. Learn more in Schwab's latest video on saving.

Capitol steps: Congress concludes its year this Friday and is likely to do so without a solution or extension for expiring health-insurance subsidies. Meanwhile, the Fed Chair heir apparent isn't a foregone conclusion and SCOTUS could tackle tariffs. My colleague Townsend covers this and more in his latest review of key news out of Washington.

The S&P 500 index (SPX–candlesticks) had an interesting Tuesday on the charts, falling to just under its 50-day moving average (blue line) of 6,765 at its intraday low. The S&P 500 managed to cling to 6,800, the weakest close so far this month and down three straight days, but well above the 50-day moving average. Technically, that ability to rebound from testing support may appear positive heading into today's trading.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

December 18: November CPI and core CPI, and expected earnings from Accenture (ACN), Cintas (CTAS), Carnival (CCL), Nike (NKE), and FedEx (FDX).

December 19: Final December University of Michigan consumer sentiment and expected earnings from Paychex (PAYX), Lamb Weston (LW), and Conagra (CAG).

December 22: No major earnings or data expected.

December 23: October durable goods orders, third quarter GDP—second estimate, and November new home sales.

December 24: No major earnings or data expected; U.S. markets close at 1:00 p.m. ET