Morning Market Brief: GDP in focus, cyclicals lead into year-end

Introduction#

U.S. equity markets enter Tuesday, December 23, 2025 with a constructive tone as investors digest a broad-based advance into the prior close and a busy overnight tape. According to Monexa AI, yesterday’s session finished higher across the major U.S. indices, with the S&P 500 closing at 6,878.49 (+0.64%), the Dow Jones Industrial Average at 48,362.68 (+0.47%), and the Nasdaq Composite at 23,428.83 (+0.52%). Volatility gauges were subdued, with the CBOE Volatility Index (^VIX) ending at 14.11 (+0.21%) and the CBOE Russell 2000 Volatility Index (^RVX) at 18.69 (-1.22%). Overnight, the key swing factors into the open include the year’s final batch of U.S. macro data led by GDP, a jump in European equities into fresh highs, and a catalyst-heavy healthcare tape following the FDA approval of Novo Nordisk’s oral Wegovy pill.

The macro backdrop is anchored by a familiar push-pull: resilient growth signals against an interest-rate outlook investors expect to pivot toward cuts in 2026. According to Monexa AI’s global news feed, U.S. equity futures ticked higher in early trade as investors positioned ahead of GDP and other prints that can influence the rate path narrative. In Europe, the Stoxx 600 set a new intra-day high as investors also eyed the U.S. GDP release later today, while pharma heavyweight Novo Nordisk rallied in overseas trade on its weight-loss pill approval. The overnight policy and politics tape also matters at the margin: U.S. defense contractors remain in focus after White House commentary pressing the industry to speed weapons delivery and rein in buybacks, a nuance for capital allocation and margins in 2026.

Market Overview#

Yesterday’s Close Recap#

The prior session featured broad gains led by cyclicals and real assets, while parts of mega-cap tech cooled. According to Monexa AI, breadth improved in Financials, Industrials, Energy, and Basic Materials, while Consumer Defensive and Utilities lagged. Semiconductor strength contrasted with mixed moves in mega-cap platforms. Defense and aerospace stood out on policy and demand tailwinds, and healthcare outperformed on an expanding GLP‑1 narrative.

From a leadership standpoint, Monexa AI’s heatmap shows semiconductors and software driving Technology breadth even as select mega-caps tempered the sector’s headline performance. NVDA rose +1.49%, MU gained +4.01%, and SNPS advanced +3.78%, while storage hardware underperformed with STX down -4.56%. Enterprise software strength was evident in ORCL (+3.34%). In Communication Services, legacy media outperformed as WBD climbed +3.53% and PSKY rose +4.29%, while NFLX slipped -1.23%. Financials were broadly firm with C (+2.81%), JPM (+1.85%), SCHW (+2.62%), and BLK (+2.64%) all higher. Energy rallied alongside a renewables outlier as FSLR surged +6.60%, while integrateds XOM (+1.25%) and CVX (+1.39%) gained. Defense and industrials remained a point of strength with HII (+5.01%), NOC (+2.85%), LMT (+1.99%), and GE (+2.45%) higher.

Notably, there is a mild data discrepancy to flag. Monexa AI’s sector breadth view shows Technology components broadly positive on semiconductor and software strength; however, the sector-level performance snapshot below shows Technology down modestly at the close. We prioritize the sector performance table for top-down sector moves and use the heatmap for intra-sector leadership context. This distinction helps reconcile a day when many tech constituents rose while a few large weights and specific sub-groups offset the headline sector print.

Overnight Developments#

The overnight feed puts U.S. macro and healthcare at center stage. According to Monexa AI, “Wall Street futures ticked higher” ahead of the last meaningful GDP release of the year, a data point with outsized influence over 2026 rate-cut expectations. In Europe, the Stoxx 600 set a new intra-day high as investors looked to the U.S. GDP print later today, and shares of Novo Nordisk rallied in Frankfurt following the FDA approval of an oral version of its obesity drug Wegovy. Reuters reported that the FDA cleared Novo Nordisk’s weight-loss pill and that the company plans a U.S. launch in early January, setting up a pivotal 2026 for GLP‑1 adoption and competition (Reuters; Reuters; Wall Street Journal.

Policy headlines linger over defense. Monexa AI flagged comments from the White House urging defense primes to accelerate weapons delivery and curb buybacks, suggesting 2026 capital return frameworks may tilt toward capex and capacity. European construction and infrastructure plays were also in the conversation after a strong 2025 run that benefited from stimulus themes and AI-adjacent demand, highlighting a broader global reflationary and investment cycle narrative.

Macro Analysis#

Economic Indicators to Watch#

The session’s prime macro catalyst is GDP. While the specific consensus estimate isn’t included in the Monexa AI dataset, the market setup is clear: GDP will influence how investors handicap the first half of 2026 for growth and inflation, in turn shaping expectations for the timing and magnitude of rate cuts. A firmer GDP print would reinforce the “resilient growth” side of the ledger and potentially keep the front end anchored, while a downside surprise could bolster the soft-landing camp and support longer-duration risk assets. Given the current volatility regime—^VIX at 14.11 and ^RVX at 18.69—the bar for large directional moves is higher, but the first move post-data could set today’s tone.

Markets are also tuned to the calendar. With the holiday schedule approaching—news outlets have flagged adjusted trading hours around Christmas Eve—participation and liquidity patterns tend to shift. According to Monexa AI’s news feed, investors should anticipate schedule changes around the holiday period. Into that context, the so-called “Santa Claus rally” narrative has reemerged in popular financial coverage, but the more investable point is breadth improvement and sector rotation: cyclicals and real assets have been gaining ground as the year winds down, according to Monexa AI’s weekly commentary snapshot.

Global/Geopolitical Factors#

The cross-currents are global. European equities pushing into fresh highs present a constructive risk cue ahead of U.S. data. Meanwhile, Monexa AI flagged that global investors are exploring opportunities in Chinese AI as concerns about froth in U.S. AI plays bubble up. The underlying implication is not a wholesale abandonment of U.S. AI leadership, but a diversification bid and a focus on capital discipline amid 2026’s capex-heavy plans.

In defense, the policy drumbeat is incremental but important. Monexa AI notes Presidential pressure on defense firms to pivot capital from buybacks toward plant investment and faster production. For investors, that means reassessing free cash flow deployment, payout ratios, and the potential for operating margin trade-offs against longer-term revenue visibility. It also reinforces the premium on companies that can demonstrate domestic capacity expansion and on-time delivery.

Sector Analysis#

Sector Performance Table#

According to Monexa AI’s sector snapshot, yesterday’s close showed the following performance by sector:

Energy topped the leaderboard as a mix of upstream and renewables advanced. Traditional majors posted steady gains alongside a standout in solar: FSLR rallied +6.60%, while XOM rose +1.25% and CVX climbed +1.39%. This combination suggests the bid extended beyond crude beta to include clean-energy exposure sensitive to policy and cost-of-capital dynamics. Healthcare outperformed with a notable GLP‑1 boost after hours; yesterday’s tape already showed strength in therapeutics and medtech, with MRK up +3.59%, MRNA up +3.25%, REGN up +1.48%, and ISRG up +1.29%.

Financials, Industrials, and Materials all reflected risk-on positioning into year-end. In Financials, banks and asset managers saw broad buying—C up +2.81%, JPM up +1.85%, SCHW up +2.62%, and BLK up +2.64%. Industrials drew support from defense and infrastructure, with HII (+5.01%), NOC (+2.85%), LMT (+1.99%), and GE (+2.45%). Basic Materials rose on miners and steel—NEM up +3.54%, NUE up +3.21%, FCX up +3.03%, APD up +2.01%, MOS up +2.18%—signaling real-asset appetite.

The laggards were the classic defensives and select consumer pockets. Consumer Defensive slid as big-box and value retailers softened—DLTR -4.18%, TGT -2.87%, WMT -1.54%—even as STZ rallied +4.98% and PM gained +1.82%. Utilities underperformed overall, pressured by names like D at -3.71%, though select operators including AES (+2.40%) and NEE (+0.62%) edged higher. Real Estate printed a solid day, led by data-center REITs such as DLR (+2.35%), while EQIX was fractionally lower (-0.08%).

Technology’s mixed signal is worth a closer look. Despite negative top-down sector performance in the table, underlying breadth favored semis and enterprise software. MU and SNPS led, while AAPL drifted -0.99% and STX undercut hardware. That split explains why headline sector performance can obscure constructive internals that matter for positioning.

Company-Specific Insights#

Earnings and Key Movers#

Healthcare is the overnight headline-maker. Reuters reported that the FDA approved Novo Nordisk’s pill version of Wegovy for obesity, with a U.S. launch planned in early January (Reuters; Reuters; Wall Street Journal. According to Monexa AI, NVO was little changed into the U.S. close (+0.02%), but overseas trading indicated a sharp positive reaction. The approval is a structural catalyst: oral administration removes a key barrier to adoption relative to injectables, potentially enlarging the total addressable market over time. Investors should track manufacturing ramp milestones and payer coverage given the company’s plan to leverage U.S. capacity expansions and to utilize cash-pay channels early in the launch.

Cytokinetics remained active following FDA approval of Myqorzo for symptomatic obstructive hypertrophic cardiomyopathy, with multiple upgrades in tow. According to Monexa AI, CYTK closed +4.59%, with options interest notable. The story transitions toward commercialization execution, pricing, and reimbursement in 2026.

In technology and AI infrastructure, ORCL rose +3.34% amid ongoing debate about the conversion of a large cloud backlog into revenue and the durability of AI infrastructure demand. Monexa AI’s overnight notes highlighted continued scrutiny around AI capex return profiles even as enterprise workloads and bookings build. Meanwhile, mega-cap platforms were mixed: GOOG gained +0.88%, META added +0.41%, and AAPL slipped -0.99%. Semiconductors leaned positive with NVDA up +1.49%, MU up +4.01%, while storage lagged in STX (-4.56%).

Defense and industrials continue to trade on a blend of policy and cycle. LMT gained +1.99% and RTX +2.02%, with Monexa AI noting White House commentary urging a tilt from shareholder returns toward capacity investment. HII rallied +5.01%, underscoring the market’s preference for delivery visibility and backlog leverage. In tools and capital goods, SWK rose +3.42% after announcing the sale of Consolidated Aerospace Manufacturing for $1.8 billion to Howmet Aerospace, a move designed to accelerate deleveraging and sharpen focus on core operations.

Media and retail remain event-driven. FOXA advanced +2.58% after a target hike and top-pick designation on advertising and sports momentum, while OLLI rallied intra-day on an upgrade tied to store economics and opportunistic real estate. In Consumer Cyclical, travel and leisure showed resilience, with NCLH up +5.34% and CCL up +3.47%, while NKE fell -2.53% and CVNA dropped -3.69%.

Payments and platforms in gaming ticked higher: DKNG rose +2.02% as its prediction app rollout expands, even as legal clarity remains a 2026 story. In asset management, BLK gained +2.64% ahead of its Canadian iShares distributions update, into a seasonal period that often favors ETF flows. The China e‑commerce complex saw a fresh estimate cut for JD, with Monexa AI noting a target reduction on softening consumption—especially household appliances—underscoring the unevenness of China’s consumer recovery.

The tape featured outsized single-stock movers. ADEA climbed +30.54% after announcing a licensing accord with Disney that resolved litigation and sharpened royalty visibility. At the other extreme, LAZR plunged -63.98% on financial distress headlines. In Energy, MPC lagged -2.11% even as peers rallied, hinting at refining-specific pressures.

Extended Analysis#

Global Overnight Shifts: How They May Drive Today’s Open. The macro handoff into the U.S. session is characterized by European equities making fresh highs and U.S. futures modestly firmer, per Monexa AI. The GDP release is the central catalyst, and with volatility already compressed—^VIX at 14.11 near its year’s lower bound—the initial response could be disproportionately influential for factor exposures. Cyclicals and commodity-linked equities have the near-term momentum, while Technology leadership has narrowed to semiconductors and select enterprise software.

Domestic Sectors to Watch Before the Bell. Energy’s leadership is notable for including both traditional oil and renewables. A strong day for FSLR alongside gains in XOM, CVX, and COP (+1.49%) suggests investors are embracing a barbell approach within the sector: cash-generative integrateds on one side and policy-sensitive growth franchises on the other. Basic Materials’ broad advance—gold, copper, steel—maps to an inflation-hedge and infrastructure narrative. Industrials and defense are buoyed by policy commentary that could redirect capital from buybacks to capacity, supporting backlogs but raising questions for 2026 payout ratios.

AI and the Rotation Conversation. The heatmap shows a familiar bifurcation in Technology. Investors continue to pay up for AI leverage in semis and enterprise software while being more selective with mega-cap platforms and hardware. That nuance aligns with Monexa AI’s general news on growing investor interest in Chinese AI as some market participants hedge against concentration and valuation risk in U.S. AI leaders. In practical terms, the near-term setup favors idiosyncratic stock selection within AI rather than blanket exposure, with a premium on earnings visibility and capex discipline.

GLP‑1 Oralization as a Structural Catalyst. The FDA approval of Novo Nordisk’s oral Wegovy marks a meaningful expansion of the addressable market for obesity treatments by lowering the barrier to initiation relative to injectables. Reuters reports the U.S. launch is slated for early January, with early distribution to self-pay channels and a larger manufacturing ramp under way in the U.S. (Reuters; Reuters. The strategic question for 2026 is how quickly payers incorporate the oral into coverage frameworks and how supply scales to meet demand. That calculus will help set the curve for not just NVO, but also competitors with oral programs targeting 2026–2027.

Volatility, Liquidity, and Seasonality. With ^RVX at 18.69 and ^VIX at 14.11, the market’s pricing of near-term tail risk is light. Thin holiday conditions can exaggerate trends once a direction is chosen, so the GDP release could act as a path-setter into midday. The “Santa Claus rally” framing is less an edge than a reminder to watch breadth, which has been improving according to Monexa AI’s weekly summary, particularly via Financials, Industrials, and Materials. Those sectors also key into a factor tilt that benefits from stable growth and a gentle glide path for rates in 2026.

Reconciling Conflicting Tech Signals. One standout from yesterday is the divergence between top-down Technology performance (slightly negative in the sector table) and bottom-up leadership among chips and software. The most practical way to square this is to recognize the outsized impact a handful of mega-caps and sub-sectors can have on the headline sector print. On days like this, positioning decisions should be informed by micro-level leadership—MU, SNPS, NVDA, ORCL—rather than relying solely on the sector ETF’s move.

Conclusion#

Morning Recap and Outlook#

Into Tuesday’s open, the setup is balanced but constructive. According to Monexa AI, the S&P 500 closed at 6,878.49 (+0.64%), the Dow at 48,362.68 (+0.47%), and the Nasdaq at 23,428.83 (+0.52%) with volatility contained. Sector leadership favored Energy, Healthcare, Financials, Industrials, and Materials; defensives lagged. Overnight, European equities pushed higher, and the U.S. macro focus zeroed in on GDP, expected to color the 2026 rate path narrative. Healthcare carries a new catalyst in Novo Nordisk’s oral Wegovy approval, while defense primes navigate a policy environment that favors capacity over buybacks.

For investors and analysts, the action points are straightforward. Watch the GDP print for its first-order impact on yields and factor tilts, and then monitor whether breadth in cyclicals holds through midday. Inside Technology, follow semis and enterprise software leadership while remaining selective on mega-caps and hardware. In Healthcare, track early signals on oral GLP‑1 access and supply. In Industrials and Defense, emphasize names with demonstrable production visibility and domestic capacity plans. Keep an eye on liquidity and calendar effects as holiday schedules approach; thin tape can amplify moves in both directions.

Key Takeaways#

The prior close confirmed a mild risk-on regime with cyclicals and real assets in charge, volatility low, and breadth improving. Today’s GDP release is the decisive macro input for the session. Energy’s barbell of integrateds and renewables, Materials’ commodity leverage, and Industrials’ defense exposure remain favored. Technology leadership is rotating within the sector toward semis and software, even as the headline sector print wobbles. The healthcare tape has a fresh structural catalyst in oral GLP‑1s, which should shape 2026 positioning. Stay focused on data and execution: keep exposures aligned with names demonstrating earnings visibility, capital discipline, and thematic tailwinds.