Market Update Into December 23rd: Powell Cancels Christmas?

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As we noted last week, the markets were treading on thin ice leading into this week’s pivotal FOMC announcement. While the rate cut itself was widely anticipated, the market appeared unprepared for the hawkish tone Jerome Powell struck during the press conference. The recalibrated outlook for rate cuts next year triggered a sharp and broad-based sell-off, as investor sentiment turned decisively to the downside. In other news;

The key question now is: how long will the selling persist? After a sharp and significant correction on Wednesday and Thursday, the markets saw a strong bounce on Friday, but it remains to be seen whether this is the start of a sustained recovery or just a temporary reprieve. Let’s take a closer look at the charts and assess how things are shaping up as we head into Christmas week.

Weekly Analysis

SPY (SPDR S&P 500)

The SPY ETF took the lightest hit this week, closing at $591.15 (–2.17%). After slicing through the 50-SMA on Wednesday, Thursday’s attempt to reclaim it hit a wall, and Friday’s sharp rebound stalled at the same level. Next week sets the stage for a showdown: a successful reclaim of the 50-SMA could keep buyers in the game, but failure might hand control back to sellers, with the 100-SMA at $573 squarely in sight.

QQQ (Invesco QQQ Trust)

Though the QQQ took a bigger hit than the SPY, closing the week at $518.66 (-2.24%), its setup appears far more constructive. Despite the sharp correction, it never traded below the 50-SMA and ended the week with a strong close above this key level—signaling buyers remain firmly in control for now.

IWM (iShares Russell 2000)

The IWM ETF took the brunt of this week’s correction, filling the election gap and closing sharply lower at $221.92 (-4.79%). After breaking below both the 50-SMA and 100-SMA on Wednesday, Friday’s impressive rally still fell short of reclaiming either level—leaving price with plenty of ground to make up next week.

Earnings

Notable Results

MU (Micron)

EPS: $1.79 vs $1.76 est
SALES: $8.71B vs $8.72B est

ACN (Accenture)

EPS: $3.59 vs $3.39 est
SALES: $17.69B vs $17.12B est

NKE (Nike)

EPS: $0.78 vs $0.65 est
SALES: $12.35B vs $12.13 est

CTAS (Cintas)

EPS: $1.09 vs $1.01 est
SALES: $2.562B vs $2.560B est

FDX (Fedex)

EPS: $4.05 vs $3.91 est
SALES: $22.00B vs $22.11B est

PAYX (Paychex, Inc.)

EPS: $1.14 vs $1.13 est
SALES: $1.32B vs $1.32B est

LEN (Lennar)

EPS: $4.03 vs $4.16 est
SALES: $9.95B vs 10.08B est

GIS (General Mills)

EPS: $1.40 vs $1.22 est
SALES: $5.24B vs $5.14B est

CCL (Carnival Cruise Lines)

EPS: $0.14 vs $0.08 est
SALES: $5.938B vs $5.930B est

HEI (Heico Corp.)

EPS: $0.99 vs $0.98 est
SALES: $1.014B vs $1.03B est

What’s Happening Now

MU (Micron)

Micron reported impressive Q1 2025 results, with revenue up 84% YoY to $8.71 billion and EPS of $1.79, exceeding expectations. However, soft guidance for Q2, citing pricing challenges and weaker PC and smartphone demand, led to a 13% drop in the stock. Analysts remain optimistic yet cautious, with many cutting targets—though Rosenblatt remains steadfast, maintaining a bold $250 target, 184% above current levels.

This is an image of all recent analyst ratings on Micron.

XLE (Energy Sector SPDR)

Markets stumbled after the Fed’s rate remarks, with all sectors posting losses this week despite Friday’s rally. Energy struggled the most, falling over 5% this week and 12% this month. Only Consumer Discretionary and Technology have managed to stay positive MTD. Meanwhile, true to form, Warren Buffett bought the blood in the streets— adding $409M of OXY shares this week, a vote of confidence for the struggling energy sector.

Bubble chart of sector performance, week to date vs. month to date.

XLF (Financial Sector SPDR)

Financials traded lower this week but held up better than the major indexes. The sector, poised to benefit from pro-business policies under a Trump administration, now eyes its strongest seasonal stretch of the year. Over the past 15 years, XLF has delivered an 87% win rate and a 1.40% average weekly return during this period, with BAC and JPM as standout performers.

This is a weekly seasonality chart of XLF.

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