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The Week Starts with Stocks Lower, Yields Higher Ahead of Rate Cut
RiskReversal Recap: Monday, Dec 8th
RiskReversal Media
December 08, 2025
MARKET WRAP
We kicked off the new week with weakness across most sectors. Damage was somewhat cushioned by strength in a few mega-cap tech names like Nvidia, Broadcom, and Microsoft. At the same time, Treasury yields continued to push higher despite this Wednesday’s expected rate cut. On the day: SPX -0.4%, QQQ -0.3% and IWM unched.
Elsewhere, yields continue to creep higher, the US10YY got as high as 4.19% before settling at 4.17%. Oil was lower. The VIX was higher out of the weekend, now 16.66.
Today’s Notable Moves: Pretty much every sector was in the red except tech. NVDA in particular benefited from another story about H200 chips in China that hit midday, but it did come give up some of those gains.
After Hours: The major indices saw a bit of a jump in the last 5 minutes before the close, both QQQ and SPY are giving up a little of whatever that was after hours. TOL is lower by about -3% following earnings. It was -2% lower into the print
Today’s MRKT Call: Dan and Guy welcome Robinhood CIO Stephanie Guild to cover Fed policy, S&P outlooks, the case for a Santa Claus rally, tech and AI valuations, credit signals, and what retail investor behavior is revealing about the market stability.
Today’s RiskReversal Pod: Dan and Guy, welcome Heather Knight of Fidelity. The show breaks down sector and AI divergences, signs of consumer strain, rising yields into the FOMC, bond-market positioning via TLT options, and preview ADBE, ORCL, and AVGO earnings.
MRKT MATRIX: TODAY’S TOP STORIES
S&P 500 slides as investors tap brakes before Fed decision this week (CNBC)
Three more Wall Street firms came out with bullish 2026 outlooks. Here’s why they see another upbeat year ahead (CNBC)
The Year of America’s Cranky Consumer (WSJ)
Stock Investors Feel Good Again—Here’s Why (WSJ)
One of World’s Biggest Bond Fund Managers Warns of ‘Dangerous’ Credit-Ratings Dynamic (Bloomberg)
Trump announces $12 billion aid package for farmers caught up in trade war (CNBC)
Paramount Skydance launches hostile bid for WBD ‘to finish what we started,’ CEO Ellison tells CNBC (CNBC)
Nvidia Set to Win US Approval to Export H200 AI Chips to China (Bloomberg)
Highest Number of S&P 500 Earnings Calls Citing “AI” Over the Past 10 Years (FactSet)
WHAT’S NEXT?
The U.S. 10-year touched 4.19% this morning before settling around 4.17%, a notable move from the 3.99% prints we saw during the Thanksgiving week equity bounce amid the pivot to near-certainty on a December cut. The bond market seems to already be looking past this week.
Whether that starts to matter for equities remains an open question. Small caps—typically the most rate-sensitive part of the market—were actually a pocket of strength for most of the day today and have been strong for most of the recent move higher in the US10YY. For now, traders seem focused on the near-term benefit of a rate cut for those names and less concerned about the back end of the curve. That could change if yields continue to grind higher. It’s very much something to keep an eye on.
Looking ahead, most of this week’s action is Wednesday and Thursday, but tomorrow does bring some labor-market data with an ADP number before the open and JOLTS shortly after.
Short-dated vol for tomorrow remains very low, but as we flagged in Sunday’s newsletter, volatility is already starting to pick up into the back half of the week. The expected move into Friday is still around 1.4%, with implied vols inching higher as we head toward the close.
Tuesday
Pre-market: AZO 4%, CPB 5%
8:15am - ADP Employment Change
10am - JOLTS job openings (7.2m)
After-hours: GME 8%
SPX Expected Move: 0.4%
TODAY’S EPISODES
Watch MRKT Call’s newest episode: Stocks Slide Ahead Of Fed Meeting
Dan and Guy dig into some sector-level weakness—especially staples—and the growing divergences inside the AI trade. They talk about emerging signs of consumer strain and rising yields heading into what could be a slightly hawkish-leaning rate cut this week. Heather Knight from Fidelity joins to break down the bond market setup into the FOMC and how options are pricing TLT. Then it’s ADBE earnings and potential option trades, before wrapping with a preview of ORCL and AVGO later in the week.
Analysis - SPX, PG, TSLA, GOOGL, MRVL, NVDA, NKE, US10YY, TLT, ADBE, CRM, ORCL, AVGO
Learn more about our sponsor, Fidelity.
Watch RiskReversal Podcast’s newest episode: Steal The Secrets From Wall Street's Top Traders with Robinhood CIO Steph Guild
Dan Nathan and Guy Adami host Stephanie Guild, CIO at Robinhood, on the RiskReversal podcast. The discussion spans various financial topics, including Federal Reserve policies, market trends, and projections for the S&P 500. Stephanie offers insights into the potential for a Santa Claus rally, the valuation of tech stocks, and the impact of consumer behavior on the market. They also explore the effects of AI spending and the sustainability of company valuations like Nvidia and Google. The conversation touches on credit market signals, the role of small businesses, and the significance of investor behavior observed through Robinhood's customer base. They conclude with thoughts on the interplay of government policies and market stability, particularly highlighting the implications of intertwined Federal Reserve and Treasury actions.
Learn more about our sponsor CME Group and iConnections.
