Week Ahead: Could AI Jitters Derail a Potential Santa Claus Rally?

U.S. equities slipped in the latest session, following Thursday’s record closing high for the benchmark S&P 500. Consecutive underwhelming earnings results from (NYSE:ORCL) and (NASDAQ:AVGO)—two prominent players in the artificial intelligence boom that has driven markets in 2024- dragged down the influential technology sector.

Stock futures edged lower Sunday evening as markets headed into a data-heavy week featuring fresh government reports on employment and inflation.

Just after 6 p.m. Eastern, DJIA futures were off by less than 0.1%, S&P 500 futures slipped 0.1%, and Nasdaq futures fell 0.2%.

Economic Events

Key U.S. Data (Dec 15–19)

Mon 12/15: Empire State Manufacturing; .

Tue 12/16: Jobs data (, , Avg Workweek/Earnings); Retail Sales; Housing Starts; Building Permits; Industrial Production; Capacity Utilization; Business Inventories.

Wed 12/17: MBA Mortgage Applications; ; Business Inventories; EIA Crude Oil Inventories.

Thu 12/18: ; & ; Leading Indicators; Philadelphia Fed Index; Net Long-Term TIC Flows; EIA Natural Gas Inventories.

• BOJ policy meeting (Dec 18–19).

Fri 12/19: Q3 (third estimate); ; Personal Income & Spending; ; Univ. of Michigan (final)

The Bureau of Labor Statistics is set to publish the November employment report on Tuesday, followed by November’s consumer price index on Thursday. Both releases had been postponed due to the 43-day federal government shutdown.

Investors will get fresh clues on the economy this week, with the U.S. November jobs report due Tuesday and the closely watched monthly consumer price index—an important gauge of inflation—set for release on Thursday. The data follow last Wednesday’s quarter-point interest-rate cut, the Federal Reserve’s third consecutive reduction aimed at supporting a softening labor market, though the divided Fed also signaled it is unlikely to lower borrowing costs further in the near term as it waits for clearer economic signals.

A Reuters survey forecasts that U.S. rose by a subdued 35,000 in November. On Wednesday, Fed Chair Jerome Powell noted that while official data show payrolls increasing by about 40,000 a month since April, the Fed believes those figures are inflated and that the labor market may actually have been shedding roughly 20,000 jobs per month on average.

The upcoming report lands at a time when inflation remains above the Fed’s target, potentially limiting the scope for additional if price pressures fail to ease. Three officials opposed the latest reduction, including two who argued that interest rates should have been kept steady.

Next week’s data docket also includes a retail sales report, offering further clues on the pace of economic growth, while Micron Technology’s Wednesday earnings could attract extra attention after this week’s AI-related volatility. The S&P 500 is up 16% year-to-date in 2025, extending its advance to about 90% since the bull market began in October 2022, and December has historically been a strong month for equities. Still, investors may look to lock in gains, adding selling pressure, and thinner holiday trading conditions could magnify price swings.

Corporate Earnings As earnings season winds down, several notable companies besides , , , and are set to report next week, offering fresh read-throughs on tariffs and the broader economy. Jabil is hovering just below a buy point after four months of sideways trading, while FedEx is roughly flat year to date but has rebounded about 27% from its October low.

Micron Technology is set to report fiscal first-quarter results late Wednesday. FactSet estimates call for adjusted EPS of $3.93, up 119% year over year, on revenue of $12.82 billion, up 47%. For the current quarter, analysts forecast EPS of $4.60, up 195%, on revenue of $13.97 billion, up 73.5%, driven by rising DRAM prices and strong AI data-center demand. Wall Street has been lifting price targets ahead of the release, with Micron shares up 192% in 2025 and trading near record highs.

Technical Analysis:

DJIA Index

• The DJIA continues to trade within an upward channel from August 2025 lows.
• It briefly pushed through the channel’s midpoint on Thursday, Dec. 11, to notch a record high, then retested that midpoint on Friday.
• Support around 48,300 is serving as a key base for further upside.
• A clear break below 48,300 would be an early warning of fatigue in the current advance.
• If that level fails, a pullback toward 47,400–47,350 becomes likely.