Semiconductor Strength and Fed Optimism Drive Equities Higher Across the Board

Wednesday’s trading session showcased a decisive rally across major benchmarks, with technology equities emerging as the primary force to lead the overall market upward. The S&P 500 climbed +0.69%, while the Nasdaq 100 outperformed with a +0.87% advance. The Dow Jones Industrials followed suit with a +0.67% gain. Futures pointed to continued momentum, with December E-mini S&P contracts up +0.70% and their Nasdaq counterparts rising +0.89%. Both the S&P 500 and Dow Jones marked their strongest levels in approximately two weeks, while the Nasdaq 100 reached a 1.5-week pinnacle.

The Tech Engine Propels Markets

The semiconductor sector served as the primary catalyst for Wednesday’s advance. Chip designers and manufacturers demonstrated remarkable strength, with Marvell Technology surging more than +5% and ASML Holding gaining over +4%. Additional semiconductor players including Advanced Micro Devices, Applied Materials, Broadcom, and ON Semiconductor each posted gains exceeding +3%. Supporting players such as Micron Technology, Analog Devices, Intel, and Lam Research rounded out the semiconductor strength with advances surpassing +2%.

This concentrated buying in technology hardware rippled through the broader equity complex, elevating the entire technology sector and lifting equities generally. The sector’s outperformance underscored investor appetite for companies positioned to benefit from ongoing technological advancement and productivity improvements.

Economic Data Shift and Fed Rate Cut Expectations

A meaningful shift in market sentiment emerged as economic data and Federal Reserve communications began pointing toward a more accommodative policy stance. Investor expectations for a December 9-10 FOMC rate cut surged dramatically to 80% from just 30% the previous week—a remarkable reversal reflecting changing market dynamics.

The catalyst for this sentiment shift included mixed economic signals. While US weekly jobless claims unexpectedly declined by 6,000 to reach a 7-month low of 216,000—suggesting labor market resilience—the November Chicago PMI contracted sharply to 36.3, marking a 17-month low and indicating weakness in manufacturing activity. Capital goods orders excluding defense and aircraft components rose +0.9% month-over-month, beating expectations of +0.3%.

Bond yields compressed amid this dovish narrative, with the 10-year Treasury note yield declining 0.2 basis points to 3.994%. The yield compression reflected both market expectations for future rate cuts and the headwind from disappointing economic momentum. European bond markets mirrored this trend, with the German 10-year bund yield settling at 2.671% and the UK 10-year gilt at 4.423%, each recording 1.5-week lows.

Individual Stock Performance

The earnings season finale generated divergent outcomes across corporate America. Urban Outfitters outperformed expectations with Q3 net sales reaching $1.53 billion against a consensus of $1.49 billion, driving the retailer to a +12% gain. Robinhood Markets skyrocketed +10% following the announcement of its majority stake acquisition in LedgerX, providing the brokerage with access to prediction markets and derivatives trading capabilities.

In the technology space, Oracle climbed more than +4% after Deutsche Bank analysts highlighted that OpenAI-related benefits remain undervalued in the stock’s current pricing. Dell Technologies surged past +5% following the company’s upward revision of its 2026 revenue guidance to $112.2 billion from a previous $105 billion-$109 billion range, meaningfully surpassing consensus expectations. Autodesk advanced more than +2% on the strength of Q3 billings of $1.86 billion, which exceeded expectations, and bolstered full-year guidance.

Conversely, several names disappointed investors. Workday declined more than -7% despite Q3 subscription revenue that matched consensus expectations exactly. Zscaler fell more than -12% to lead Nasdaq 100 losers, with management guidance for 2026 revenue of $3.28 billion-$3.30 billion providing minimal upside to current estimates. Nutanix plummeted more than -17% following Q1 revenue that came in below expectations at $670.6 million versus a $676.6 million consensus, coupled with downward revisions to full-year guidance. Ambarella tumbled more than -19% after forecasting Q4 adjusted gross margins of 59%-60.5%, falling short of the 60.6% consensus expectation.

Corporate News Highlights

Equities also received support from strategic business developments. Boeing gained more than +2%, benefiting from a $2.47 billion contract award for 15 additional KC-46A Pegasus tankers from the US Air Force, alongside confirmation that Taiwan’s China Airlines approved a $7.852 billion aircraft purchase from the manufacturer.

Market Context and Outlook

The combination of semiconductor sector momentum and shifting expectations regarding Federal Reserve policy created an environment where equities managed to lead the recovery despite mixed underlying economic data. Corporate earnings season, now drawing to completion with 475 of the S&P 500’s constituents having reported, showed strong execution with 83% of reporters exceeding forecasts and overall earnings growth of +14.6%—well ahead of initial +7.2% expectations and tracking toward the strongest quarter since 2021.

International markets displayed mixed performance, with the Euro Stoxx 50 rallying to a 1-week high and closing +1.47%, Japan’s Nikkei Stock 225 advancing +1.85%, and China’s Shanghai Composite sliding -0.15%. The divergent performance globally reflected differing economic conditions and policy trajectories across regions.