Markets Sell Off -0.5% to -1.8% Ahead of Inflation Rate Thursday

Wednesday, December 17, 2025

Markets experienced a heavier sell-off today, after starting the session at the opening bell flat-to-up. By 11am or so, the Dow and the small-cap Russell were in negative territory; the Nasdaq and S&P 500 had already gotten there. The Dow closed -228 points, -0.47%, and it got off easy. The S&P 500, Nasdaq and Russell 2000 were all down -1.16%, -1.81% and -1.14%, respectively.

This marks the fourth-straight down-day for the blue-chip Dow and the comprehensive S&P 500. The Russell 2000 has only traded down since closing at an all-time high last Thursday. The Nasdaq has dipped into the red over the past month of trading, and down -6.5% from its all-time high back in late October of this year. 

The AI trade had been keeping markets buoyant for much of 2025; now that the year is coming to an end, investors are apparently looking toward 2026 with a warier eye than we’ve seen — although we’ve only had one “Santa Claus Rally” in the past five years, in 2023. AI stocks have taken it on the chin, including Oracle ORCL -5.4%, Broadcom AVGO -4.5% and NVIDIA NVDA -3.8%. Also, Caterpillar CAT dropped -4.7% and Lennar Home LEN fell -4.4%.

Even Tesla TSLA, fresh from an all-time closing high just yesterday, suffered a heavy round of profit-taking today, as the EV leader slid -4.6% on the day. Tesla has also been named by the California DMV as having provided misleading claims about its autos, claiming them to have “full self-driving capability” when they don’t, exactly. The DMV adopted this position from a judge’s ruling last month, and has been given 60 days to take down such claims.
 

Micron Posts Huge Beats in Q1 Report

After today’s close, Zacks Rank #1 (Strong Buy)-rated Micron MU blew the doors off expectations in its fiscal Q1 report. Earnings of $4.78 per share swept away the paltry Zacks consensus of $3.91, while revenues of $13.64 billion zoomed past the $12.74 billion anticipated. Next-quarter guidance is also significantly higher than we had previously forecast.

Operating cash flow rose +47% quarter over quarter to $8.41 billion, and is more than double the $3.24 billion it had reported in the year-ago quarter. Micron doubled its cloud memory business year over year to $5.28 billion, on improved +66% gross margins. Shares are up +5% in late trading, adding to its stupendous +168% rise in share price from the start of the year. 
 

November CPI Inflation Rate Hits the Tape Thursday Morning

Tomorrow ahead of the opening bell, we not only get normal Weekly Jobless Claims, but the government-shutdown-delayed Consumer Price Index (CPI) for November (skipping October completely). We already hear noises from some market participants about the accuracy of this upcoming data 16 hours before it’s released, but consensus is currently for a +3.1% Inflation Rate (year-over-year CPI, headline) — the highest since May of 2024. Core CPI year over year is anticipated at +3.0%.

We have already seen the erosion to the labor market over the past year yesterday with the Employment Situation report. If we also see CPI numbers continuing to tick up — and we’ve only gone up or stayed pat each month since April’s low +2.3% — that may be a bad sign for the economy on the brink of a new year. “May” be; it’s not certain. Even still, selling off the tops of this healthy 2025 market seems more reasonable if investors are questioning what’s to come.

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