Midday Market Update: Cyclicals Take Point As Tech Rebounds

Introduction

U.S. equities pushed higher into midday Monday, December 22, 2025, with cyclicals carrying the tape while mega-cap tech and AI leaders stabilized after recent chop. According to Monexa AI’s intraday dashboard, the S&P 500 (^SPX) was up 0.60% near session highs as financials, energy, and basic materials outperformed alongside a rebound in select semiconductors and enterprise software. Volatility continued to compress, with the CBOE Volatility Index (^VIX) down 2.88% near multi-month lows, reflecting a constructive, albeit thin, liquidity backdrop typical of the holiday-shortened week. Media and wire coverage through the morning emphasized a handful of discrete catalysts: a fresh Alphabet infrastructure acquisition, steady AI chip momentum, ongoing rotation into cyclicals, and an elevated policy backdrop after Federal Reserve Governor Stephen Miran’s remarks about the need to continue easing policy in 2026, as reported by Bloomberg. With few economic releases on the tape, investors looked ahead to this week’s GDP update that Charles Schwab’s Cooper Howard called the most important print of the week, per Schwab’s televised commentary and Monexa AI’s aggregation.

Market Overview#

Intraday Indices Table & Commentary#

Stocks were firm across the cap spectrum by midday with the S&P 500 (^SPX) hovering near its intraday peak of 6,879.34 after holding a narrow range for most of the morning, per Monexa AI. The Dow (^DJI) advanced 0.52% and the Nasdaq Composite (^IXIC) gained 0.58%, both buoyed by resilient tech leadership and strength in cyclicals. The NYSE Composite (^NYA) led among the majors, up 0.85% as breadth skewed positive in financials, energy, materials, and industrials. Volatility was subdued: the VIX (^VIX) slid to 14.48 (-2.88%), near the lower end of its one-year range, while the Russell 2000 Volatility Index (^RVX) eased to 18.76 (-0.85%). Turnover remained light versus averages in a holiday-shortened week, with S&P 500 composite volume tracking below its 50-day norm, according to Monexa AI.

A handful of idiosyncratic movers shaped tone. In technology, semiconductors staged a measured rebound led by NVDA (+1.18%), MU (+2.67%), and SNPS (+2.79%), while hardware/storage lagged on declines in STX (-4.67%) and WDC (-2.19%). Communication Services was constructive on strength in Alphabet’s dual share classes GOOGL (+0.77%) and GOOG (+0.79%), while streaming trailed with NFLX (-0.97%). Financials were firm across banks, asset managers, and alt managers, with JPM (+1.51%), BAC (+1.38%), BLK (+2.42%), and BX (+2.68%) higher. Energy rallied alongside commodity-linked cyclicals, with XOM (+1.05%) and CVX (+1.33%) up, while renewables outperformed behind FSLR (+5.76%). Basic materials outpaced the tape on miners and metals, led by NEM (+3.73%) and FCX (+3.17%). Defensive pockets lagged, with Consumer Defensive pressured by declines in WMT (-1.53%), TGT (-2.12%), DLTR (-2.62%), and COST (-0.75%).

Macro Analysis#

Economic Releases & Policy Updates#

With no major U.S. data releases at the open, traders focused on policy signaling and the week’s calendar. Charles Schwab’s Cooper Howard emphasized that this week’s GDP print would be the most consequential macro input in a low-data, holiday week and suggested inflation is likely to remain “stuck” in a range into 2026 without upending the general path of anticipated easing, per Schwab’s televised remarks aggregated by Monexa AI. Meanwhile, Federal Reserve Governor Stephen Miran told Bloomberg that the Fed risks a downturn if it does not continue reducing rates next year, adding he would likely stay on the Board past his term’s expiration until a new chair is confirmed by the Senate, according to Bloomberg. Those comments sustained a constructive rates narrative that helped financials and other rate-sensitive cyclicals, consistent with the sector tape.

Volatility metrics corroborated the calmer policy backdrop. Monexa AI showed the VIX down 2.88% to 14.48 and the Russell 2000’s volatility proxy (^RVX) down 0.85% to 18.76, signaling compressing implied ranges as investors position into the year’s final trading sessions. Given the lighter calendar, traders highlighted Friday’s thin liquidity tail risks but, so far, price action reflected benign conditions.

Global/Geopolitical Developments#

Overnight and morning headlines were led by a continued slide in the Indian rupee to fresh lows versus the U.S. dollar, an issue receiving broad financial-press coverage as the Reserve Bank of India intervenes to smooth volatility, per Bloomberg. In commodities, multiple outlets flagged strength in precious metals into the holiday week, with gold and silver hovering near record territory in morning trading, as noted in aggregated morning coverage and Monexa AI’s news feed. While those global threads did not dominate U.S. index moves, they dovetailed with the outperformance in basic materials miners like NEM and FCX, as investors continued to add commodity-linked cyclicality.

The policy backdrop also included fresh attention on U.S. space priorities. Following last week’s signing of an executive order aimed at “Ensuring American Space Superiority,” sector-specific outlets and wires reported momentum across space and defense-adjacent equities, with contracts from the U.S. Space Development Agency and supportive budget frameworks covered by Reuters. That context helped underpin a morning surge in select space names, notably RKLB.

Sector Analysis#

Sector Performance Table#

According to Monexa AI’s sector dashboard, today’s leadership skewed to cyclicals. Energy led with a 1.77% intraday gain, supported by integrated majors like XOM (+1.05%) and CVX (+1.33%) and a standout move in renewables via FSLR (+5.76%). Industrials climbed 0.75% on broad strength in defense, aerospace, and capital goods: HII (+5.05%), SWK (+4.25%), GE (+2.28%), CMI (+2.33%), and LMT (+1.83%) were leaders, while FAST (-1.82%) lagged. Financial Services advanced 0.71% with large banks and asset managers well-bid, including JPM (+1.51%), BAC (+1.38%), BLK (+2.42%), BX (+2.68%), and crypto-adjacent COIN (+2.27%).

Basic Materials rose 0.55% on commodity-linked momentum; gold and copper proxies outperformed as NEM gained 3.73% and FCX rose 3.17%, while steel maker NUE added 2.39% and industrial gases name APD climbed 1.95% with LIN up 0.51%. Real Estate added 0.64%, paced by data-center and logistics exposure such as DLR (+2.35%), PLD (+0.53%), and towers AMT (+0.02%) and SBAC (+0.33%). Healthcare was higher by 0.90% with a mix of big-cap pharma, medtech, and selectively volatile biotech: MRK rose 2.34%, ISRG gained 1.41%, REGN added 1.62%, and MRNA surged 5.65%, offsetting weakness in INCY (-3.10%).

Defensives were the pockets of weakness. Utilities declined 0.67% as D fell 5.43% with a broader drag from ES (-1.74%), partially offset by CEG (+0.55%) and SRE (+1.17%). Consumer Defensive slipped 0.46% as big-box retail softened: WMT (-1.53%), TGT (-2.12%), DLTR (-2.62%), and COST (-0.75%). Technology, while mixed intraday on Monexa AI’s sector gauge (-0.43%), showed notable stock-level dispersion: semis and software rallied while storage and some hardware names slumped.

Company-Specific Insights#

Midday Earnings or Key Movers#

Alphabet’s infrastructure push shaped the morning tape. CNBC reported that Alphabet agreed to acquire Intersect, a data center and energy infrastructure firm, for $4.75 billion in cash to support AI compute and power needs, a move aligned with hyperscaler capacity expansion cycles (CNBC. Shares of GOOGL rose 0.77% and GOOG gained 0.79% into midday, according to Monexa AI, while data-center REIT DLR advanced 2.35%, underscoring how capex-linked infrastructure news can ripple through adjacent value chains.

Semiconductors sustained a constructive bid. MU rose 2.67% amid persistent AI memory optimism, and NVDA added 1.18% after press reports reiterated a China-compliant H200 timeline and continued data-center demand, as highlighted in morning coverage from Yahoo Finance and other outlets. EDA leader SNPS gained 2.79%. The strength in chips and enterprise software was offset by storage weakness: STX fell 4.67% and WDC declined 2.19%, reinforcing the internal bifurcation within tech.

Cyclicals were supported by travel and leisure. CCL climbed 3.13% following a price target increase to $38 from Wells Fargo and constructive travel-demand commentary in recent sessions, per Monexa AI’s wire aggregation. Peer NCLH rose 4.30%, while TSLA advanced 2.85% on broad risk-on appetite.

In financials, the rally was broad. Large banks like JPM and BAC moved higher, while asset managers BLK and BX gained 2.42% and 2.68%, respectively. Regional lender FITB added 0.99% after Truist set a $55 price target in recent days, according to Monexa AI’s compilation of broker notes.

Space and defense captured attention on policy momentum and contract visibility. RKLB jumped 10.45% by midday after a weekend launch success and coverage of a recent U.S. Space Force contract win, with sector sentiment aided by last week’s policy backdrop around space superiority and ongoing SDA contract awards highlighted by Reuters. Defense primes also contributed to industrials’ firmness, with LMT up 1.83% and shipbuilder HII up 5.05%.

Select M&A and corporate actions drove additional single-name volatility. Clearwater Analytics (CWAN rose 8.31% midday after a take-private offer valuing the company at roughly $8.4 billion, a 47% premium to pre-announcement levels, per Monexa AI’s deal tracker. In software infrastructure, ORCL rallied 2.60% as investors reassessed the magnitude of post-earnings downside and focused on catalysts across data center build-out and potential TikTok-related ventures, according to CNBC and Monexa AI coverage.

Homebuilders and housing-adjacent names were mixed after last week’s results. KB Home (KBH traded down 1.71% midday, a smaller decline than Friday’s drop following cautious FY2026 commentary despite a fiscal Q4 beat, per Monexa AI’s recap. Separately, Winnebago (WGO was down 4.66% intraday, despite earlier coverage of a revenue beat, a guidance raise, and a rating upgrade; this is a notable discrepancy where earlier headlines cited an 8.4% gain post-earnings, but Monexa AI’s real-time pricing shows a midday reversal. Consistent with our standards, we prioritize live pricing for intraday analysis while acknowledging the morning’s initial reaction documented by fundamental coverage.

International exposure and consumer health were in focus. US Tiger Securities trimmed its price target on JD.com to $35 from $40, citing weakening Chinese consumption and steep declines in home-appliance retail sales in October and November, referencing China’s National Bureau of Statistics (Monexa AI; FMP). Shares of JD were modestly higher by 1.01% midday, which we interpret strictly as an intraday move rather than a contradiction of the fundamental trend cited by the broker. In energy transition, FuelCell Energy (FCEL added 6.18% after last week’s earnings pop, though Wells Fargo maintained an Underweight rating while raising its target, per Monexa AI’s broker digest; we rely on the midday price for today’s analysis.

Extended Analysis#

Intraday Shifts & Momentum#

The session’s character is a classic risk-on rotation supported by easing policy expectations and thin holiday liquidity. The positive skew in cyclicals, especially energy, financials, materials, and industrials, coupled with leadership from selective AI beneficiaries in semis and software, gave the S&P 500 (^SPX) enough breadth to sustain morning gains into midday. The VIX’s slide to 14.48 and the Russell small-cap volatility proxy’s decline signaled declining hedging costs and risk premiums, consistent with price action that favored beta exposure.

The most consequential development from a strategic positioning perspective is the divergence within technology. Software and semiconductors are backstopping the tape with ORCL (+2.60%), SNPS (+2.79%), NVDA (+1.18%), and MU (+2.67%), while storage hardware weakness in STX (-4.67%) and WDC (-2.19%) underscores that not all AI-adjacent demand accrues evenly across the stack. Investors appear to be favoring compute, memory, and software layers tied directly to AI workloads and enterprise modernization, while remaining cautious on legacy or commodity-linked hardware segments.

Communication Services’ tone reflects a similar split. Alphabet’s shares rose modestly on news of the Intersect deal, which, according to CNBC, bolsters power and capacity planning for AI growth. That strength contrasted with NFLX (-0.97%), hinting at a market still discriminating within media and streaming on profitability durability and competitive dynamics. Traditional media outperformed with FOXA up 3.54% and smaller-cap media like PSKY up 4.56% into midday, per Monexa AI.

Financials’ leadership is notably broad. Large money-center banks were bid alongside alternative managers and fintech, with JPM, BAC, BLK, BX, and COIN higher. That mosaic typically tracks days when the forward path of policy is perceived as supportive and credit fears are contained. Bloomberg’s reporting of Governor Miran’s comments—warning of recession risk without further easing—likely reinforced the market’s conviction in rate-cut prospects, which in turn supports net interest margin stability and capital markets appetite, absent a competing macro shock.

Energy and materials gains appear consistent with the commodity tape and the day’s risk tenor. Integrated majors and upstream names like XOM, CVX, and COP moved higher, while solar leader FSLR surged. Metals miners like NEM and copper proxy FCX rallied with precious and industrial metals benefiting from macro hedging and growth signaling, as covered this morning across financial media and reflected in Monexa AI’s heatmap.

Defensives fell out of favor intraday. Consumer staples saw broad-based selling across mass merchants and discounters—WMT, TGT, DLTR—as investors rotated toward more cyclical exposures. Utilities underperformed, exacerbated by a sharp drop in D (-5.43%), even as nuclear-leaning CEG and renewables giant NEE held slight gains. The drawdown in staples and utilities is consistent with risk-taking days and aligns with the falling VIX, as investors reduce hedges and add beta ahead of the quarter’s close.

Space and defense remain a distinct narrative thread. Policy developments, highlighted by Reuters’ coverage of Space Development Agency awards and last week’s executive order framework, provided a tailwind for the complex. RKLB led gains among space-exposed equities, augmented by discrete company catalysts including a successful weekend launch and recent contract wins documented in Monexa AI’s news stream. Defense primes like LMT and naval shipbuilder HII extended recent strength, while investors continue to parse how FY2026 budget authorizations could sustain revenue visibility across national-security space and multi-year programs (Reuters.

The consumer picture is more nuanced. On the one hand, travel/leisure resilience supported CCL and NCLH. On the other, big-box retailers traded off, and targeted coverage flagged China’s cooling consumption as a headwind for JD despite its modest intraday bounce. For stock selection, this bifurcation argues for a more surgical approach within consumer exposure—rewarding categories with clear pricing power and secular demand while underweighting those facing margin and traffic headwinds tied to income-mix pressures or international slowdowns.

Heading into the afternoon, positioning is straightforward but sensitive to liquidity: if volatility stays pinned and breadth remains positive across cyclicals and selective tech, the indexes can carry gains into the close. Conversely, holiday liquidity increases the probability of outsized impact from any headline shock; however, as of midday, the visible drivers—policy signaling, selective M&A, and AI infrastructure spending—skew constructive, per Monexa AI’s real-time feed and corroborating coverage from Bloomberg, Reuters, CNBC, and Yahoo Finance.

Conclusion#

Midday Recap & Afternoon Outlook#

By midday, U.S. equities were higher with the S&P 500 (^SPX) up 0.60%, the Dow (^DJI) up 0.52%, and the Nasdaq Composite (^IXIC) up 0.58%, while the VIX (^VIX) fell 2.88% to 14.48, according to Monexa AI. Leadership tilted toward cyclicals—energy, financials, materials, and industrials—augmented by a resilient rebound in key AI beneficiaries in semiconductors and enterprise software. Sector-level dispersion within technology and consumer staples emphasized the importance of stock selection: compute/memory and high-quality software attracted flows, while storage hardware and big-box retail lagged. Alphabet’s Intersect deal added an AI-infrastructure angle that lifted data-center proxies and bolstered confidence in hyperscaler capex durability, as reported by CNBC.

Policy and macro inputs were supportive. Bloomberg’s interview with Fed Governor Stephen Miran reinforced the market’s rate-cut baseline moving into 2026, while Charles Schwab highlighted the upcoming GDP release as the key macro print of the week. Internationally, India’s currency weakness and resilient precious metals colored risk appetite but did not materially disrupt U.S. equity flows, which stayed focused on domestic sector rotation and AI infrastructure narratives.

For the afternoon, the setup leans constructive but remains liquidity-sensitive. With volatility depressed and sector breadth positive, watch whether financials and energy can sustain momentum into the close and whether semiconductors can hold leadership without a late-day fade. Traders will also monitor any incremental headlines on AI infrastructure, space/defense contract flow, and end-of-day rebalancing or window-dressing dynamics typical of thin holiday sessions. As always, our analysis anchors to verifiable intraday data; any shifts in policy guidance or macro releases could alter the complexion quickly in low-volume trade.

Key Takeaways#

Cyclicals in control. Energy, financials, materials, and industrials led gains, while staples and utilities lagged, consistent with a risk-on session in thin trade, per Monexa AI.

Tech is bifurcated. Semiconductors and enterprise software supported the tape; storage hardware underperformed despite the broader AI narrative.

Volatility compressed. The VIX slid to 14.48 (-2.88%) as liquidity stayed thin; risk premia and hedging costs moved lower into midday.

Infrastructure and policy matter. Alphabet’s $4.75 billion Intersect acquisition and supportive policy headlines around space/defense spending underpinned infrastructure and industrial pockets, as covered by CNBC and Reuters.

Macro watch remains front and center. Bloomberg’s interview with Fed Governor Miran and Schwab’s commentary kept rate-cut expectations and this week’s GDP in focus for the next leg.