Closing Recap

Monday, December 08, 2025

U.S. stock market volumes have slowed up the last week and a half, with major averages falling today and snapping a 4-day win streak for the S&P 500 as investors await the next market catalyst before the Christmas holiday season. The expected major catalyst this week is the Federal Open Market Committee (FOMC) monetary policy meeting on Wednesday at 2:00 pm et where the Fed is expected to lower the benchmark overnight rate by 25 basis points to a range of 3.50%–3.75%, with the central bank easing for a third straight meeting. This means that investors are likely to look to the Fed’s guidance on policy into next year for signals from the meeting. Besides the Fed decision, the central banks of Australia, Brazil, Canada and Switzerland also hold rate-setting meetings, although none of these are expected to change monetary policy. The technology sector (XLK) was the only S&P sector higher today, rising for an 11^th straight day while Utilities, Healthcare, Consumer Discretionary, Materials and Energy all fell over 1% on Monday. There were a few notable sectors on the move today with Biotech active given several key updates at the ASH conference this weekend (see below), while semiconductors (SOX) index hit a fresh all-time high earlier today before paring gains, with investors awaiting earnings from ORCL, AVGO this week.

More red flags in Large Cap tech: Yardeni Research turns less bullish on Magnificent Seven as growth moderates. According to founder and veteran Wall Street strategist Ed Yardeni, competitive pressures are beginning to mount for the Mega cap leaders that have defined the market’s recent rally. “We see more competitors coming for the juicy profit margins of the Magnificent 7,” Yardeni wrote, adding that advances in technology are instead poised to lift productivity and profitability across a wider swath of corporate America. In his view, “every company is evolving into a technology company.” As a result, Yardeni said it no longer makes sense to recommend an overweight allocation to the Information Technology and Communication Services sectors within an S&P 500 portfolio, a stance the firm has held since 2010.

Wall Street though still remains bullish on stocks into next year as Oppenheimer Asset Management set a year-end 2026 target of 8,100 for the S&P 500 index, the most bullish forecast among major Wall Street brokerages, citing expectations of strong corporate earnings and continued resilience in the U.S. economy. The target implies an 18% upside to the S&P 500’s last close of 6,870.40 points and assumes earnings per share will reach $305. Next high remains Deutsche Bank’s 8,000 forecast for the index and a roughly 12% rise in the U.S. stocks thru 2026.

Stock movers based on S&P Index announcement changes: CRH Plc (CRH), Carvana (CVNA), and Comfort Systems USA (FIX) will join the S&P 500 as part of the benchmark index’s quarterly rebalancing on 12/22, and will replace LKQ (LKQ), Solstice Advanced Materials (SOLS), and Mohawk Industries (MHK) will be removed and added to the S&P 600 Smallcap index. Other changes include: ULS, PINS, BAH, SPXC, DY, BWA, HL are being added to the S&P 500 Index on 12/22. FIX, UA, UAA, POWI, PRGO, IRDM, VAC, are being removed from the S&P 400 on 12/22. PRIM, CWST, INDV, HE, LKQ, SOLS, MHK, UA, UAA, POWI, PRGO, IRDM, VAC, NSP are being added to the S&P 600. SPXC, DY, BWA, HL, RC, SITC, THRY, HELE, ASIX, RGR, MGPI, CEVA, SCVL are being removed from the S&P 600 12/22.

• The Fed’s Open Market Committee (FOMC) will conclude its meeting on Wednesday with its final policy decision of the year, followed by remarks from Chair Jerome Powell. U.S. Treasury yields climb after earthquake in Japan; yield on 10-year Treasury notes last up 4.1 bps at 4.18%, hitting 2-1/2 month highs.
• The U.S. dollar advanced in choppy trading ahead of a week packed with central bank meetings and headlined by the Federal Reserve Wednesday, where an interest rate cut is all but priced in, but investors braced for signals of a milder easing cycle than expected. The yen however weakened vs. rival currencies after a powerful magnitude 7.6 earthquake shook Japan’s northeast region late on Monday, prompting tsunami warnings and orders for residents to evacuate. Analysts are expecting the Fed to make a "hawkish cut", where the language of the statement, median forecasts and Chair Jerome Powell’s press conference point to a higher bar for further rate reduction.
• In Treasury yields, they went higher again ahead of the FOMC meeting with the 10-yr hitting near 4.2% this afternoon. The U.S. sold $58B 3-year notes at high yield 3.614%, awards 89.65% of bids at high as the bid-to-cover ratio 2.64, as primary dealers take 9.03% of U.S. 3-year notes sale, direct 19% and indirect 71.97%.
• Brent Crude futures settle at $62.49/bbl, down $1.26, or 1.98% while U.S. crude oil futures settle at $58.88/bbl, down $1.20, or 2.00%. Natural gas prices fell over -7% after hitting 3-year highs last Friday on warmer weather forecasts, settling at $4.91 mln btus

• RACE was downgraded to Equal weight from Overweight at Morgan Stanley and lower PT to $425 from $520 as views management’s decision to strictly limit volume growth up until 2030 positively, as it acts as curator of the brand. However, in the short to medium term, this should translate to relatively modest growth and coupled with investor concerns about the launch of the brand’s first EV, this should cap valuation multiples in the coming months.
• TSLA was assumed coverage at Equal weight (down from Overweight) with a $425 price target at Morgan Stanley noting Tesla is a clear global leader in Electric vehicles, manufacturing, renewable energy, and real world Ai and thus deserving of a premium valuation. However, high expectations on the latter have brought the stock closer to fair valuation and sees downside to estimates.
• In other Auto changes at Morgan Stanley: GM was upgraded to Overweight while downgraded LCID, RIVN to Underweight driven by its negative EV outlook and CAR downgraded to Equal Weight saying they are taking a more cautious view on the Auto Industry heading into 2026 after a surprisingly resilient 2025: 2025 US Auto sales seasonally adjusted annual rate (SAAR) demonstrated greater resiliency than anticipated despite the policy uncertainty and fears around Consumer Confidence, buoyed by two pre-buy Dynamics – autos broadly ahead of tariff implementation and Battery Electric vehicles (BEVs) ahead of consumer tax credit expiry. Top OW ratings are GM, CVNA, while moves all stocks in their US Supplier coverage (ADNT, APTV, AXL, BWA, LEA) to Equal-weight to reflect the mixed outlook and reiterate its generally positive view on US Franchise Dealer stocks driven by insulation from lower-income consumer and more resilient earnings, albeit with more moderate risk-return profiles vs CVNA (favorite idea in Auto retail).

• In Oil E&P Sector: INR said it will acquire upstream and midstream assets in Ohio from AR and AM for a combined $1.2 billion. Concurrently, NOG will acquire an undivided 49% interest in the assets for $588 million, resulting in a $612 million purchase price net to Infinity for its undivided 51% interest. Natural gas producers, EXE, WMB, RRC, etc. declined along with a pullback from 3-year highs in natural gas on forecasts for less cold weather over the next two weeks than previously expected, and near-record output.
• In Oil Majors: JP Morgan with several changes as they downgraded OXY to Underweight from Neutral with a price target of $44, down from $51, DVN upgraded to Overweight, AR downgraded to Neutral, RRC cut to underweight and CNX upgraded to Neutral as part of its 2026 outlook saying they see supply side risks for oil and liquids but says the long-awaited demand inflection for natural gas has finally arrived. The magnitude of the crude oil oversupply, plus a potential end to the Russia-Ukraine conflict in 2026, is a "double whammy" for lower oil prices.

• Credit Card payments: Visa (V) was upgraded to Buy (PT to $389 from $335) and MA upgraded to Buy (PT to $633 from $598) at JSBC Holdings saying they see attractive entry points after big underperformance in payments. HSBC notes both Visa and MA shares have lagged the S&P 500 by 22-26 ppts over the past six months and are on track to underperform the broader market for only the fourth time in since their IPOs in the mid to late 2000s (E.G. years where both lag the S&P 500). On a PE basis, V and MA trade at discounts to their own historical averages and their PE premiums versus the S&P 500 are also narrower than in the past.
• Credit Card issuers: Wolfe Research assumes coverage of the Card Issuer sector and reiterates its Outperform ratings on COF , its Peer Perform rating on AXP, and downgrade BFH to Peer Perform from Outperform. For AXP, Wolfe believes AXP is poised to deliver its aspirational growth targets in the coming years, its current valuation at ~95% of the market multiple screens to US as elevated, and it awaits more favorable entry points. For BFH, the firm struggles to underwrite material NT catalysts and view risk/ reward as more in balance. For COF says the company’s higher returns should be a supportive of a higher valuation and for SYFDe Novo programs and the unwinding of credit tightening actions should allow SYF to turn to growth in the coming quarters.
• In FinTech: JKHY was upgraded to Outperform at KBW Inc. saying they believe the risk/reward profile for the stock has shifted favorably amidst evolving sector Dynamics. KBW’s positive thesis is anchored on four key drivers: 1) Share gain opportunity, 2) Balanced bank M&A activity, which should be net neutral (vs. headwind) to revenues, 3) Attractive valuation relative to history, and 4) Conservative F26 estimates.
• Apartment REITs (AVB, ESS, UDR, IRT, MAA): U.S. Apartment rents declined in November, Apartment.com says, with the National average falling 0.18% to $1,706. This Marks the Fifth consecutive month of flat or negative monthly Rent change and the steepest November decline in over 15 years, though moderating from October’s decline of 0.30%. Annual Rent growth slowed further to 0.7%, down from 0.8% in October and 1.5% at the start of the year. – WSJ

• AGIO said U.S. regulators have not yet made a decision on expanding the use of its rare blood disease drug mitapivat to patients with thalassemia, even though a target review date passed last week. The drug mitapivat, sold under the brand name Pyrukynd for another rare blood disorder, is designed to boost the activity of a key enzyme in red blood cells. The FDA has not given Agios a new timeline for a final decision.
• BEAM’s Risto-cel showed a very competitive profile at ASH, with best-in-class time-to engraftment (17.5 days vs. 27 days for Casgevy), mean total Hb (17-18 g/dL vs. 11-13 g/dL for Casgevy) HbF levels (64% vs. 41% for Casgevy), and VOC reductions (100% investigator-reported). Citizens Research said data looks competitive compared to CRSP/VRTX’s Casgevy (exa-cel) but believe there is no threat to numbers as execution is the key barrier in SCD.
• DYN said its experimental drug for Duchenne muscular dystrophy — a potential next-generation version of SRPT’s much-debated Exondys 51 — hit the mark in a late-stage study, setting up a potential approval. The REC met its primary endpoint, demonstrating a statistically significant increase in muscle content-adjusted dystrophin expression to 5.46% of normal relative to baseline at six months (p<0.0001).
• FULC shares jumped after presenting positive initial results from its on-going 20mg dose cohort of the phase 1b PIONEER trial of pociredir in sickle cell disease; data shows dose response & clinical activity supportive of transition to registrational study; in the early stage study, 12 patients saw their levels of fetal hemoglobin rise from 7.1% of the total hemoglobin in their blood to 16.9%.
• GPCR shares surged after saying its experimental drug aleniglipron at a dosage of 120mg showed an 11.3% reduction in weight in a mid-stage study, a figure that was statistically significant compared to placebo at 36 weeks, while another study exploring higher doses of aleniglipron showed weight loss of up to 15.3% at 36 weeks.
• INCY reported early but encouraging data at this year’s American Society of Hematology meeting for its experimental drug INCA033989, as the drug showed spleen volume reductions in 33% of evaluable patients. The drug, which targets the calcium-binding protein calreticulin, improved symptoms in 39% of patients after 24 weeks.
• IRON data for ‘0974 showed promising signs for further development as Disc-0974 in myelofibrosis anemia demonstrated major responses of 50%, 71%, and 0% in nTD, TD-low, and TD-high patients as a part of the first Ph 2 data for the asset.
• KMDA announces discontinuation of its phase 3 inhaled AAT clinical trial; reiterates 2025 full-year guidance and projects double-digit growth in revenues and profitability in 2026; projects double-digit growth in revenues and profitability in 2026.
• KYMR shares jumped after announced positive clinical results from the BroADen Phase 1b trial in atopic dermatitis (AD), with the study exceeding managements highest expectations; said KT-621 was well-tolerated with no serious adverse events reported; said KT-621 Broaden2 phase 2B trial to severe Ad ongoing, data expected by mid-2027; KYT-621 achieves 94% and 98% stat6 degradation in skin and blood.
• LEGN shares fell after announced new long-term clinical and translational data for CARVYKTI from the CARTITUDE-1 and CARTITUDE-4 studies in relapsed / refractory multiple myeloma, RRMM, patients. In triple-class-exposed patients who had received three prior lines of therapy, a median progression-free survival, mPFS, of 50.4 months, was observed following a single infusion of CARVYKTI.
• LYEL presented updates at ASH on Ph1/2 data for autologous dual-targeting CD19/CD20 CAR T ronde-cel in relapsed and/or refractory large B-cell lymphoma.
• NRIX presented updated safety/efficacy results from P1 trials evaluating Bexobrutideg (Bexdeg) and ONC’s BGB-16673 in heavily pretreated R/R CLL at this weekend’s ASH meeting as Stifel said it further strengthens its confidence in the potentially best-in-class profile of Bexdeg and the selection of 600mg as the go-forward dose.
• OCUL announces plans to accelerate NDA submission timeline for AXPAXLI in Wet AMD; Ocular intends to submit AXPAXLI NDA shortly after year one data from SOL-1, if positive; SOL-1 topline data remains on track for Q1.
• PRLD reported compelling preclinical data at ASH in two separate oral presentations highlighting a mutant Selective JAK2 inhibitor, PRT12396, as well as a mutCALR degrader-antibody conjugate (DAC). The data for both assets provide compelling best-in-class features, including high rates of target inhibition.
• RXRX said its experimental oral drug, REC-4881, helped reduce abnormal growths, called polyps, in the colon of patients with a rare genetic condition called familial adenomatous polyposis; in an early to mid-stage trial, 9 out of 11 patients maintained a durable reduction in total polyp burden, 12 weeks after discontinuing therapy.
• SNDX and KURA Phase 1b results for the menin inhibitor ziftomenib + venetoclax/azacitidine in newly diagnosed NPM1-mutated AML showed encouraging responses. Additional combo data in relapsed/refractory settings were highlighted.
• TERN shares jumped late afternoon after reported an update on its targeted leukemia drug that maintained and even boosted molecular response rates in advanced-stage patients. The study results, while still early, are likely to draw even more positive attention from investors who already view the Terns drug as a potential successor to a commercial blockbuster from NVS noted STAT News.
• WVE shares jumped after saying its experimental obesity drug WVE-007 helped cut deep belly fat and boost muscle mass in an early-stage study; three months after treatment, patients on the drug had 9.4% less visceral fat and 4.5% less total body fat, compared with their own baseline, with no statistically significant changes in the placebo group; drug was generally safe and well-tolerated.

• Pharma rating changes: NVO was downgraded to Hold from Buy at Argus saying the company has seen the market share of its GLP-1 drugs – Wegovy and Ozempic – decline in recent quarters and has also agreed to lower prices of these drugs in the U.S. markets. PRCT was downgraded to Neutral at Bank America saying large mkt opportunity but leading growth indicators already slowing.

• In Industrials/Multi Industry: Deutsche Bank downgraded MMM to Hold from Buy as shares have risen 64% since upgrade in July 2024 and names ETN as top pick in 2026 in Multi Industry/Electrical Equipment. The form said a short-cycle industrial recovery may be developing in the US as of Q325…but a quarter does not make a trend, the underlying data is still mixed, and this nascent upturn could easily be derailed by abrupt policy changes and/or a hawkish Fed.
• In Agriculture (DE, AGCO, MOS, NTR, CNH): The Trump administration is planning to announce $12 billion in aid to U.S. farmers, according to administration officials, as the agriculture sector grapples with the fallout from President Trump’s far-reaching tariffs. The aid package is expected to be unveiled at the White House on Monday afternoon, where Trump is holding a roundtable with farmers, the officials said. Top administration officials have been discussing the bailout behind the scenes for months. Much of the aid — $11 billion — will be in the form of one-time payments through the Farmer Bridge Assistance program, which helps U.S. crop farmers. The remaining $1 billion will go toward commodities not covered under the bridge assistance program. DE and AGCO slipped after Trump talked about making tractors more affordable and cheaper to manufacture. Talk of product pricing from the While House might have spooked investors.
•  In Transports: Morgan Stanley with several changes in sector update as the upgraded ODFL, CP to Overweight from Equal Weight as raised their Freight Transportation industry view to Attractive for 2026 as believes risk-reward is the best it has been since 2020, even if the coast is not entirely clear. The demand side of the Cycle has been in unprecedented territory since the de-stocking downcycle definitively ended in mid-2024, bouncing along the bottom with no sustained recovery. It appears the market was waiting for one specific catalyst after another – first interest rate cuts in 2H24, then the election in Nov 2024 and finally tariff clarity, all through 2025. KNX remains their #1 ranked stock for 2026 overall but is now followed by GXO and Ryder (R) with CNI and CP rounding out the top 5, while EXPD, XPO, FDX, UPS and CHRW continue to bring up the rear.
• In Metals & Mining: Jefferies downgraded copper stocks IVN, EGO to Hold from Buy in 2026 metal & mining preview saying they remain bullish on gold equities in ’26 given attractive valuations, even as it is neutral on gold, but is now more cautious on copper equities given valuations, even as it is positive on copper prices. They expect gold companies to expand margins (no major cost inflation yet) and print more FCF YoY in ’26.

• In Internet: PINS was downgraded to Neutral from Outperform at Wedbush and lowering its PT to $30 after the company reported mixed Q3 results, and next quarter, Pinterest anticipates revenue growth ~100bps below initial expectations. Importantly, the guide contemplates a less constructive range of outcomes for the platform given broader macro uncertainty and tariff implications.

• In Software: IBM confirmed a report in the WSJ overnight, buying CFLT for $31 per share in cash, valuing the data streaming company at about $11B. Confluent has 6,500+ customers and says its TAM has doubled to $100B. IBM says the deal should strengthen its data and automation stack for enterprise AI. NOW shareholders approve 5-for-1 stock split; Shareholders of record on 12/16 will receive 4 additional shares per 1 held, w/ distribution after 12/17.
• In Hardware & Components: HLIT announced it has received a binding offer from MediaKind, a global leader in cloud-based video streaming technology, to acquire its Video Business segment for approximately $145 million in cash.
• In EDA Sector: SNPS was upgraded to Neutral from Underperform at Bank America saying its FY26E outlook on its upcoming EPS call (Dec-10) could be the clearing event to help address BAML’s prior concerns around (unexplained) weakness in its China and INTC IP business and high (near-term) Ansys integration costs.

• MU, SNDK, SSNLF Susquehanna increasing estimates for Micron, Samsung Electronics, SanDisk, and Sk Hynix, primarily driven by stronger ASPs. The firm said for DRAM expects blended ASPs to rise 10-15% Q/Q Q425-1H26, followed by a 5% Q/Q increase in 2H26, DRAM bit shipments in 2026 are projected to grow 20-22% Y/Y, following an 18-20% increase in 2025. For NAND, the firm forecast blended NAND ASPs to increase 10-12% Q/Q Q425-Q126, with 5-10% Q/Q growth Q226-Q426. And said NAND bit shipments in 2026 are expected to rise 20-25% Y/Y vs.10-15% growth in 2025.
• Semafor reported this afternoon that the U.S. Department of Commerce will soon permit exports of NVDA’s H200 GPUs to China. These chips are about 18 months behind the company’s most advanced models, according to sources.