**December 12, 2025**
Welcome to your daily market brief. As we head into the trading day, we’re seeing a fascinating divergence between the tech sector and broader equity markets, while currency markets continue to adjust to the latest signals from the Federal Reserve. Here’s a look at what to expect in the stock and forex markets today.
Stock Market Outlook: Record Highs and Tech Pains
Yesterday saw a mixed but ultimately positive session for U.S. equities, with the **Dow Jones Industrial Average** and the **S&P 500** both closing at record highs. The Dow surged an impressive 1.34% to close at 48,704.01, while the S&P 500 edged up 0.2% to reach a new peak for the first time since late October [1]. This rally was fueled by a rotation of capital into blue-chip, non-technology stocks, with companies like Visa (V) and Home Depot (HD) seeing significant gains.
However, the tech-heavy **Nasdaq Composite** told a different story, falling 0.3% to 23,593.86. The decline was largely driven by a sharp drop in Oracle (ORCL) shares after the company’s latest earnings report missed analyst expectations. This has had a ripple effect across the AI sector, with other major players like NVIDIA (NVDA) and Broadcom (AVGO) also feeling the pressure. This suggests a growing sentiment among investors that the AI hype of the past year now needs to be backed by concrete financial results.
Looking ahead, the market will be closely watching the earnings reports from Broadcom and Costco, which were released after the bell yesterday. The continued strength of the bull market, which has seen the S&P 500 on track for another year of double-digit gains, will be tested by concerns over high valuations and the long-term sustainability of the current rally. While the recent Federal Reserve rate cut has provided some support, Vanguard has issued a cautious forecast, predicting single-digit annual returns for the S&P 500 over the next decade [1].
| Index | Closing Price (Dec 11, 2025) | Change | Key Level |
| :— | :— | :— | :— |
| Dow Jones | 48,704.01 | +1.34% | Record High |
| S&P 500 | Record High | +0.2% | Record High |
| Nasdaq | 23,593.86 | -0.3% | N/A |
Forex Market Outlook: Dollar Strength and Central Bank Divergence
In the foreign exchange markets, the **U.S. Dollar** is showing signs of strength, on track for its best week in a month despite some recent fluctuations. The dollar’s performance is being shaped by the Federal Reserve’s recent 25-basis-point rate cut and its cautious “wait-and-see” approach for 2026. While the initial reaction to the Fed’s announcement was a weaker dollar, the currency has since recovered.
The **EUR/USD** pair has jumped to a seven-week high, currently consolidating in the 1.16-1.17 range. However, analysts at ING suggest that further significant gains may be challenging, with a year-end target of 1.1800 [2]. The **USD/JPY** is testing a key support level around 155.50, with the yen also influenced by growing expectations of a rate hike from the Bank of Japan at its December meeting. Meanwhile, the **GBP/USD** has benefited from the dollar’s initial weakness following the Fed’s announcement.
The key theme in the forex market today is the divergence in central bank policies. While the Fed is adopting a cautious stance, other central banks like the Reserve Bank of Australia and the Swiss National Bank are pursuing different strategies, creating opportunities for currency traders. The market will be looking for further clues on the future direction of interest rates and monetary policy from central bankers around the world.
References
[1] Markets News, Dec. 11, 2025: Dow, S&P 500 Close at Record Highs; Nasdaq Ends Lower as Oracle Results Weigh on Tech Shares. *Investopedia*. [https://www.investopedia.com/dow-jones-today-12112025-11866662](https://www.investopedia.com/dow-jones-today-12112025-11866662)
[2] EUR/USD Jumps to 7-Week Best as Fed Divisions Deepen. *Currency News*. [https://www.currencynews.co.uk/forecast/20251211-44787_euro-to-dollar-forecast-eur-usd-jumps-to-7-week-best-as-fed-divisions-deepen.html](https://www.currencynews.co.uk/forecast/20251211-44787_euro-to-dollar-forecast-eur-usd-jumps-to-7-week-best-as-fed-divisions-deepen.html)
