Market Update Into December 15th: AI Stocks Stumble

Markets were choppy last week as traders digested a widely anticipated 25-basis-point rate cut from the Fed, alongside some significant tech and semiconductor earnings. While the market reacted positively to rate cuts, earnings led to a sell-off later in the week. The semiconductor sector took the brunt of the selling after $AVGO tanked on its report, despite posting a double-beat. Overall, price action leaned risk-off, with silver and consumer staples finishing the week higher. However, small-caps also ended in the green while Treasuries sold off, signaling mixed investor sentiment. In other news:

• Fed Cuts Again
• AI Hype Cracks
• Adobe AI Breakout
• Oracle Crash Explained

Looking ahead, traders will be focused on the upcoming CPI report, consumer sentiment data, and a key earnings release from $MU. With FOMC and most major earnings now in the rearview, this month’s options expiration could be the catalyst that determines how the markets act going into year-end. Let’s see how the charts are setting up.

Weekly Analysis

SPY (SPDR S&P 500)

SPY ended the week modestly lower, closing at $681.76 (-0.57%). The Turtle Trading Strategy triggered a long entry last week after the ETF printed a new 20-day high. Price has since pulled back and is now sitting just above its 10-day low, which marks the strategy’s exit level following Friday’s sell-off. According to the Strategy Variance Explorer, this trade is considerably underperforming its historical average, leaving bulls with little room for error heading into the new week.

QQQ (Invesco QQQ Trust)

It was a brutal week for tech bulls as QQQ closed at $613.62 (-1.90%), with earnings volatility driving a sharp reversal. The ETF printed a 20-day high on Wednesday, triggering a long entry from the Turtle Trading Strategy. Just days later, price broke down to a 10-day low, prompting a strategy exit and demonstrating its goals of cutting losing trades quickly while allowing winners room to run.

IWM (iShares Russell 2000)

IWM led the major indexes last week and was the only one to finish in the green, closing at $253.85 (+1.23%). Small-caps likely benefited from avoiding much of the earnings-driven volatility while also responding favorably to the Fed’s recent rate cut. The Turtle Trading Strategy triggered a long entry the prior week, and since then, two additional pyramiding entries have been added as price continued to push higher. With multiple entries now in play, the focus shifts to whether the trend can sustain its momentum or begins to show signs of exhaustion.

Earnings

Notable Results

NTSK (Netskope Inc.)

• EPS: $(0.10) vs $(1.28) est
• REV: $184.20M vs $175.95M est

ORCL (Oracle)

• EPS: $2.26 vs $1.50 est
• REV: $16.06B vs $16.17B est

CHWY (Chewy)

• EPS: $0.32 vs $0.23 est
• REV: $3.12B vs $3.10B est

CIEN (Ciena)

• EPS: $0.91 vs $0.67 est
• REV: $1.35B vs $1.29B est

GME (GameStop)

• EPS: $0.24 vs $0.18 est
• REV: $821.00M vs $987.29M est

SNPS (Synopsys)

• EPS: $2.90 vs $2.30 est
• REV: $2.26B vs $2.24B est

CNM (Core & Main)

• EPS: $0.89 vs $0.71 est
• REV: $2.06B vs $2.07B est

LULU (Lululemon)

• EPS: $2.59 vs $2.21 est
• REV: $2.57B vs $2.48B est

AVGO (Broadcom)

• EPS: $1.95 vs $1.72 est
• REV: $18.02B vs $17.48B est

ADBE (Adobe)

• EPS: $5.50 vs $4.99 est
• REV: $6.19B vs $6.11B est

CPB (Campbell Soup)

• EPS: $0.77 vs $0.73 est
• REV: $2.68B vs $2.66B est

FERG (Ferguson)

• EPS: $2.84 vs $2.74 est
• REV: $8.17B vs $8.14B est

COST (Costco)

• EPS: $4.34 vs $4.27 est
• REV: $67.31B vs $67.20B est

FIZZ (National Beverage)

• EPS: $0.50 vs $0.51 est
• REV: $288.33M vs $292.66M est

AZO (AutoZone)

• EPS: $31.04 vs $32.33 est
• REV: $4.63B vs $4.64B est

TOL (Toll Brothers)

• EPS: $4.58 vs $4.87 est
• REV: $3.42B vs $3.32B est

RH (RH)

• EPS: $1.71 vs $2.15 est
• REV: $883.81M vs $883.37M est

AVAV (AeroVironment)

• EPS: $0.44 vs $0.81 est
• REV: $472.51M vs $470.35M est

What’s Happening Now

LLY Eli Lilly and Company
Next week is statistically one of the best times of the year to own Eli Lilly. Dating back 19 years, this specific window delivers an average gain of +2.3 % with a 68% win rate. It outperforms every other week on the calendar. With the FDA fast-tracking weight-loss decisions, the fundamental narrative has arrived just in time to fuel the seasonal fire.

ORCL Oracle
Oracle’s cloud transition is real, but the financing is aggressive. Cloud services now drive 43% of revenue, OCI is growing at triple-digit rates, and backlog has surged. The cost is visible. Margins are compressing, free cash flow is volatile, and debt has climbed above $92B. The story hinges on execution. Scale fixes this, or leverage becomes the risk.

Believe it or not, this is just a fraction of what happened in the markets last week. For a full rundown delivered straight to your inbox every weekend, sign up for The Official Trendspider Newsletter!