Stock Market Rises as Nvidia and Oracle Lead Tech Revival

Dec 20, 2025, 2:23 AM

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US stocks rose on Friday, marking a rebound after a recent losing streak, as optimism grew from signs of cooling inflation and reduced concerns over artificial intelligence (AI) investments. The S&P 500 increased by 0.8%, while the Nasdaq Composite gained over 1.3%, building on a strong rally from Thursday. The Dow Jones Industrial Average climbed 0.3% but ended the week down 0.6% overall.

This late-week surge allowed both the S&P 500 and Nasdaq to secure weekly gains, rising 0.1% and 0.4%, respectively, as traders eyed a potential "Santa Claus rally" to finish the year strong. In contrast, the Dow faced a slight decline during the week, reflecting the mixed performance across different sectors.

A significant contributor to the tech sector's revival was Oracle (ORCL), whose stock jumped after China's ByteDance announced deals to create a US TikTok joint venture. This news helped lift Oracle's shares, which had previously experienced volatility. Additionally, Nvidia (NVDA) saw its stock rise following a Reuters report indicating that the US is reviewing the prospects for sales of its H200 chips in China, further boosting confidence in the AI market.

In the broader economic context, nine pharmaceutical companies reached agreements with the Trump administration to lower drug prices for certain Americans in exchange for a three-year tariff exemption on their products. This development, along with a more favorable inflation outlook, has helped maintain investor confidence as the Federal Reserve prepares for potential interest rate cuts in the coming year.

Market analysts noted that a combination of a softer inflation picture and a weakening job market has reignited hopes that the Federal Reserve will continue its recent trend of easing monetary policy. Many traders are currently betting on two rate cuts next year, with some shifting their expectations toward even more cuts as economic indicators evolve. A final consumer sentiment report from the University of Michigan is expected to provide further insights into market conditions, following an initial December survey that indicated an increase in consumer confidence for the first time in five months.

Meanwhile, the benchmark 10-year Treasury yield rose to 4.15%, influenced by global bond markets reacting to the Bank of Japan's recent interest rate hike, which marked the highest level since 1995. This rise in yields reflects the ongoing adjustments in financial markets as they respond to economic data and central bank policies.

Overall, the US stock markets are set to remain open as scheduled on December 24 and December 26, despite the federal government closing on those days due to directives from President Trump. This decision underscores the resilience of the markets as they navigate through a complex economic landscape while aiming for a strong finish to the year.

Investors remain cautiously optimistic as they monitor developments in both the tech sector and broader economic indicators, with the potential for further gains as the year draws to a close. The interplay between inflation data, interest rates, and corporate performance will be crucial in shaping market trends in the weeks ahead.

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