US stocks struggled for direction on Monday as markets entered the final full trading week before the Holidays, with investors becoming more cautious ahead of a packed slate of economic data that could shape expectations for interest rates in 2026.
The Dow Jones Industrial Average slipped slightly, while the S&P 500 and Nasdaq Composite also edged down after erasing early gains. Tech stocks remained under pressure following last week’s pullback, as rising Treasury yields and renewed scrutiny around AI spending continued to weigh on sentiment.
Market Movers:
- Immunome (IMNM) +26%: Shares surged after the biotech reported positive topline Phase 3 results for varegacestat in patients with progressing desmoid tumors. The trial met its primary endpoint with a significant reduction in disease progression risk, prompting plans to submit a New Drug Application to the FDA in 2026.
- ZIM Integrated Shipping Services (ZIM) +5%: The shipping stock climbed following reports that MSC has submitted a takeover bid for the company, emerging as a rival bidder to Hapag-Lloyd. The news fueled speculation around consolidation in the global shipping industry, despite domestic opposition to a foreign-led acquisition.
- Amphastar Pharmaceuticals (AMPH) +3%: Shares advanced after the FDA approved the company’s abbreviated new drug application for a bioequivalent version of Eli Lilly’s Forteo. Amphastar plans to launch the product by year-end, targeting a U.S. osteoporosis market estimated at roughly $585 million.
- iRobot (IRBT) -81%: The Roomba maker collapsed after filing for Chapter 11 bankruptcy protection under a prepackaged restructuring plan. The filing follows mounting competitive pressure from lower-cost rivals and the impact of new tariffs that sharply increased manufacturing costs.
- ServiceNow (NOW) -10% and Adobe (ADBE) -3%: Both stocks slid after KeyBanc downgraded the software names, citing rising competition from AI-driven tools. Analysts warned that slowing enterprise hiring and intensifying pressure from AI-native platforms could weigh on growth and margins in 2026.
- Strategy (MSTR) -7%: Shares fell after the company disclosed another large bitcoin purchase, funded largely through equity and preferred stock sales. Investors appeared wary of continued dilution and bitcoin volatility despite the firm’s long-term accumulation strategy.
- Sanofi (SNY) -2%: The drugmaker slipped after its Phase 3 trial for tolebrutinib in primary progressive multiple sclerosis failed to meet its primary endpoint. Sanofi said it will not pursue regulatory approval for the indication following the disappointing results.
Tech Rotation and AI Concerns Persist
Monday’s decline extended a broader rotation out of tech, as investors reassess valuations tied to aggressive AI spending. Recent earnings from several large technology players have raised concerns about margin pressure and the timeline for meaningful returns on massive infrastructure investments, prompting a shift toward more defensive and value-oriented sectors.
At the same time, Treasury yields moved higher, adding further pressure on growth stocks that are more sensitive to interest-rate expectations. While some strategists view the rotation as healthy market broadening, volatility remains elevated heading into year-end.
Focus Turns to Economic Data and the Fed
Markets are now bracing for a heavy flow of economic data delayed by the recent government shutdown, including the November jobs report, inflation readings, and retail sales figures. Together, the releases are expected to play a key role in shaping the Federal Reserve’s path for rate cuts in 2026. Investors are also watching developments around the Fed’s leadership, as speculation grows over who will replace Chair Jerome Powell when his term ends in May. Comments from potential successors could influence expectations around the pace and depth of future easing.
Looking Ahead
With holiday-thinned liquidity approaching, markets may remain choppy as investors digest key data and position for the new year. While optimism around economic resilience and eventual rate cuts continues to underpin longer-term bullishness, near-term trading is likely to stay sensitive to surprises on inflation, employment, and corporate earnings momentum as 2025 winds down.
