4 Key Events That Shaped the Stock Market Last Week

The S&P 500 hit a wall on Friday, closing the week in the red after reaching a fresh all‑time high just a day earlier. A broad rotation out of technology stocks— the engine that had lifted the Dow for most of the session— was on full display. The market rally sparked by the Federal Reserve’s third rate cut of the year on Wednesday has largely faded.

Over the past five trading days the S&P 500 slipped about 0.6%, while the tech‑heavy Nasdaq fell 1.6%, snapping a two‑week winning streak. Materials, financials and industrials emerged as the week’s top‑performing sectors, whereas communications services and information technology were the biggest laggards. The Dow, buoyed by the non‑tech rally, logged a 1.0% gain – its third consecutive weekly advance. Despite December’s historic strength, the broad market remains modestly below its peak, while the Dow trended upward by roughly 1.6%.

Investors are now eyeing the traditional “Santa Claus rally,” a seasonal uptick that usually unfolds over the final five trading days of the year and the first two of the new year, set to begin on Dec. 19. In the meantime, four headline‑making events defined last week’s market narrative.

1. Broadcom’s unexpected slide

Broadcom (AVGO) shocked the market with an 11.5% plunge on Friday. The chipmaker’s earnings beat and revenue raise on Thursday were quickly eclipsed by a cautious tone in management’s earnings‑call commentary, which investors interpreted as a signal of slowing demand for custom AI chips. Even as noted market commentator Jim Cramer called the dip a potential buying opportunity, the stock emerged as the week’s worst performer, followed closely by Meta Platforms (META) and Nvidia (NVDA).

From a technical standpoint, AVGO’s price broke below its 20‑day moving average, suggesting short‑term momentum may stay bearish unless the company provides clearer guidance on AI‑related order flow. The broader AI‑chip sector remains vulnerable to sentiment swings as investors weigh the gap between lofty valuation multiples and the tangible capital‑expenditure cycles of data‑center customers.

2. Oracle’s credibility challenge

Oracle (ORCL) endured a second round of selling pressure on Friday, falling an additional 4.5% after Bloomberg reported that the company was pushing back completion dates for data‑center projects destined for OpenAI. The delay follows an 11% drop on Thursday, triggered by a sales miss and a more cautious outlook on enterprise‑software spending.

Analysts note that Oracle’s cloud‑infrastructure business is increasingly judged on its ability to support AI workloads for high‑profile partners like OpenAI. Any perception of execution risk—particularly around data‑center rollouts—could exacerbate the stock’s valuation gap to peers such as Microsoft (MSFT) and Amazon (AMZN), which have already secured multi‑year AI commitments.

3. Nvidia secures limited access to the Chinese market

Nvidia (NVDA) received a partial regulatory win late last week. The U.S. government granted export licenses that allow the company to ship a throttled version of its H200 AI accelerator to “approved” Chinese customers, with a 25% royalty on sales. The deal follows Nvidia’s August agreement to supply a reduced‑capability H20 chip to China in exchange for a 15% royalty.

While the volume of approved shipments is expected to be modest, the clearance signals a potential pathway for future U.S. AI‑chip exports to China—an area that has been tightly constrained since 2022. Investors will be watching how quickly Nvidia can convert the licensing framework into meaningful revenue, especially as Chinese cloud providers scramble to close the AI‑compute gap.

4. Industrial AI tailwinds lift GE Vernova

GE Vernova (GEV), the newly spun‑off energy‑equipment business, posted its strongest week despite a 4.6% intraday dip on Friday. The company announced upbeat guidance out to fiscal 2028, driven by rising demand for power‑distribution and cooling solutions in AI data centers. CEO Scott Strazik highlighted a near‑term revenue runway of $30‑$35 billion, with long‑term growth anchored in renewable‑energy integration and grid‑modernization projects.

Given the capital‑intensive nature of AI infrastructure, GEV’s position as a supplier of high‑efficiency transformers, switchgear and thermal‑management equipment offers a relatively stable cash‑flow stream. The market responded by lifting the stock’s price target to $800 from $700 and reaffirming a “Buy‑Equivalent” rating.

Sector outlook and market dynamics

These four stories illustrate a broader theme: capital is flowing toward the physical underpinnings of AI—chips, data‑center construction, and power‑delivery equipment—while valuations for pure‑play software and cloud providers remain under pressure. The ongoing rate‑cut cycle, though supportive of liquidity, is being offset by heightened risk aversion around AI‑related supply‑chain bottlenecks and geopolitical licensing constraints.

Investors should watch three key variables over the next month:

• Federal Reserve policy. Any hint of a shift away from rate cuts could sharpen the market’s focus on earnings quality, especially for high‑multiple tech names.
• AI‑chip supply chain developments. Production ramp‑ups at TSMC and Samsung, combined with export‑license decisions in the U.S., will dictate the velocity of AI adoption.
• Enterprise‑software spending trends. Companies like Oracle and Microsoft will be judged on their ability to convert AI enthusiasm into recurring‑revenue contracts.

With the “Santa Claus rally” still a few days away, market participants are likely to adopt a cautious stance, rotating between defensive sectors and the emerging AI‑infrastructure theme.

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