Good morning, traders. Samuel here with your daily market brief for December 14, 2025.
**Stock Market: A Shift in Sentiment**
The S&P 500 may have touched a new high last week, but don’t let that fool you. The market is showing signs of fatigue, with momentum fading and a clear rotation out of the high-flying tech and AI stocks that have dominated 2025. We’re seeing a shift into more traditional value plays, small-caps, and dividend-paying stocks. This rotation has legs, and it’s a sign of a healthier, broader market.
Concerns are growing around the profitability of the AI boom, with Oracle’s recent earnings report and spending guidance sending a ripple of fear through the sector. This isn’t to say the AI revolution is over, but investors are becoming more discerning and are looking for real profits, not just hype. As a result, we’re seeing money flow into materials, financials, and international equities. This is a classic late-cycle rotation, and it suggests that the market is preparing for a different economic environment in 2026.
**Forex Market: All Eyes on Central Banks**
In the forex market, the main story continues to be the outlook for central bank policy, particularly the US Federal Reserve. The market is now fully pricing in a rate cut in December, which has put some downward pressure on the US dollar. The Dollar Index (DXY) is currently hovering around the 98.40 level, and the technicals suggest a potential for further weakness.
For GBP/USD, the pair has been trading in a range between 1.3360 and 1.3440. While disappointing UK data has weighed on the pound, the broader dollar weakness has provided support. The upcoming Bank of England meeting will be a key catalyst for the pair. The overall trend for GBP/USD remains firm, with analysts forecasting a move towards 1.35 by year-end.
Elsewhere, the euro has been showing strength, with EUR/JPY hitting a new all-time high. This reflects both the broad-based euro strength and the ongoing weakness in the Japanese yen.
**What to Expect Today**
Today, we can expect the market to continue to digest the recent shift in sentiment. The focus will be on any fresh economic data and any comments from central bankers. The key themes to watch are the ongoing rotation out of tech and into value, as well as the market’s positioning ahead of the upcoming Fed and BoE meetings. As always, trade safe and be prepared for volatility.
