Market Summary
Stocks rallied after softer-than-expected U.S. CPI, with the S&P 500 and Nasdaq leading gains while the Dow lagged. Volatility eased but trading remains driven by macro data and earnings — AI-related semiconductors outperformed (Micron), banks and energy reacted to policy shifts, and crypto traded choppy after large liquidations and security reports.
The delayed November CPI showed inflation cooled to 2.7%, a reading that shook markets and reignited debate over data quality after a government shutdown. Analysts warn distortions from missing data could complicate Fed decisions and short-term market moves.
Figure of the Day
2.7% – U.S. annual CPI in November, the pace of consumer-price inflation that surprised markets lower.
Markets rallied on the softer inflation print, with tech and chip names leading gains as traders priced a friendlier Fed path. Momentum was driven by headline CPI and corporate beats that shifted risk appetite into year-end.
Trump Media stunned markets by agreeing to merge with a nuclear fusion developer in an all-stock transaction, sending its share price sharply higher and raising questions about the deal’s industrial logic. The merger highlights speculative fervor around fusion and data-center power supply for AI.
Bullish
OpenAI sells 700K ChatGPT licenses to U.S. colleges
OpenAI has sold over 700,000 ChatGPT licenses to roughly 35 U.S. colleges, expanding its institutional footprint and locking in recurring revenue from the education sector.
More on bloomberg.com
ByteDance struck binding agreements to restructure TikTok’s U.S. operations into an American-led joint venture, a move intended to head off a U.S. ban and placate regulators. The deal involves Oracle, Silver Lake and other investors and sets a precedent for how foreign apps can stay in the U.S.
OpenAI is pursuing massive new capital raises and valuation targets as it leans into compute-heavy product expansion. The funding push underscores investor appetite for AI but fuels debate about sky-high private valuations and concentration risks.
Bearish
Tesla faces 30-day sale suspension in California over ‘Autopilot’ claims
California DMV warned Tesla to change Autopilot advertising or face a 30-day ban on new car sales, a move that threatens the EV maker’s crucial California market and raises regulatory risk.
More on abc7.com
Micron’s results and outlook turbocharged the chip sector, with the memory maker citing sustained AI-driven demand for servers. The beat-and-raise sparked analyst upgrades and wider repricing of semiconductor winners.
The U.S. approved an unprecedented arms package for Taiwan worth roughly $11 billion, prompting sharp objection from Beijing and heightened regional tensions. The move signals Washington’s willingness to deepen Taiwan’s defenses amid strategic rivalry with China.
Regulatory Impact
Major policy moves include the White House executive order to reclassify cannabis (easing research and banking access) and House passage of permitting reforms to speed AI infrastructure — both will reshape markets and regulatory oversight.
Oil prices rose on fears that the White House’s blockade and pressure on Venezuelan tankers could disrupt supply. Shipping routes and tanker schedules shifted as some operators rerouted to avoid potential seizures.
Global central banks diverged: the Bank of Japan moved toward a long-awaited tightening while the Bank of England cut rates for the first time in months. The split underscores differing inflation paths and will complicate currency and carry trades.
Quote
This latest inflation data is favorable and gives room for policymakers to consider cuts.
— Austan Goolsbee, Chicago Fed President
President Trump moved to reclassify marijuana via executive order, downgrading federal restrictions and opening new pathways for research and banking for the cannabis industry. The policy shift immediately rippled through markets and regulatory conversations.
Crypto suffered a record year of thefts, while bitcoin’s wild intraday moves continue to liquidate large positions. The twin trends highlight systemic security gaps and the market’s sensitivity to macro shocks.
Instacart agreed to settle FTC allegations with a roughly $60 million payout, resolving claims it used deceptive subscription and pricing practices. The settlement pressures gig-economy platforms to tighten consumer disclosures.
Investors keep pouring capital into data centers even as communities and regulators push back over power and grid strain. The land grab reflects rising demand for AI compute, but local fights threaten project timelines and returns.
U.S. regulators eased some mandates on Citi and trimmed oversight tied to past consent orders, signaling a gradual rollback of post-crisis restrictions. The changes may presage a broader thaw in bank supervision for large institutions.
Wall Street expects a wave of crypto exchange-traded products and the SEC has issued additional custody guidance, reshaping how brokers and funds hold tokens. The twin developments accelerate crypto’s institutional infrastructure buildout.
Elliott Management has built a sizable stake in Lululemon and is pushing for leadership change, extending a share-price rally and forcing strategic choices for the athletic retailer. Activist pressure could trigger further corporate moves into 2026.
Tech giants keep iterating on AI: Meta is developing image and video models while OpenAI launched a major model update and an app store for ChatGPT. These product steps aim to lock in developer ecosystems and expand monetization channels.
BP replaced its CEO in a surprise move that signals a pivot away from the company’s recent green-energy emphasis toward a more traditional oil-and-gas posture. Investors are parsing the hire for strategy and capital-allocation implications.
