Key Takeaways

• U.S. holiday spending reached a record $187 billion online, shaping the market landscape for this press review dated 22 December 2025.
• Robust consumer demand, technology and AI-driven strength in equities, and shifting macroeconomic indicators provide traders with a clear market snapshot.
• Top story: U.S. online holiday spending set a new benchmark at $187 billion, reflecting resilient consumer activity.
• The S&P 500 rose 0.8% as technology stocks advanced on renewed AI optimism and stronger growth expectations.
• ISM Manufacturing PMI registered 48.5, exceeding forecasts but remaining in contraction, indicating areas of resilience within industrial sectors.
• The 10-year Treasury yield increased to 4.35%, signaling market reaction to retail strength and improved economic sentiment.
• Consumer confidence and sector performance continue to drive new narratives, underlining the importance of strategic discipline.

Introduction

On 22 December 2025, U.S. online holiday spending set an all-time high of $187 billion, underscoring resilient consumer demand and shaping today’s market press review. The S&P 500 climbed after a surge in technology stocks and growing AI optimism, framing a market context that demands careful consideration of robust retail activity and shifting economic signals.

Top Story: Record U.S. Holiday Spending

U.S. holiday retail spending reached $214.6 billion, representing a 4.8% increase over the previous year and the strongest performance since 2019. Despite ongoing inflation concerns, consumers remained resilient. Online shopping rose by 6.3%, while in-store sales grew by 2.7%.

Analysts attributed this growth to improved consumer sentiment and early retailer discounting. The National Retail Federation stated that the holiday season started in mid-October, rather than the traditional post-Thanksgiving period, which contributed to a longer spending window.

Spending increases were notable in electronics, home goods, and apparel, with average transaction values up 3.2% year-over-year. Major retailers such as Amazon, Walmart, and Target reported strong gains in digital channels, highlighting the ongoing shift toward omnichannel shopping.

Further insights are expected with upcoming fourth-quarter earnings reports, beginning in late January. Traders recognize that holiday sales figures provide important indicators for future retail trends.

Also Today: Markets and Technology

AI Chip Demand Outpaces Supply

Nvidia reported that demand for its AI processors once again surpassed production capacity for the third straight quarter, with lead times extending to 36 weeks. Shares climbed 3.7% after CEO Jensen Huang noted that infrastructure investment in AI remains in the early stages.

Semiconductor equipment makers, including Applied Materials and ASML, rose 2.8% and 3.2% respectively. Bank of America analysts estimate the market for AI chips could reach $130 billion by 2027, a compound annual growth rate of 42%.

Production constraints at Taiwan Semiconductor Manufacturing Company (TSMC) continue to favor early entrants in the market. While enthusiasm is high, traders are reminded to balance momentum with attention to supply chain realities and evolving technologies.

Tech Earnings Expectations Recalibrated Higher

Wall Street analysts raised first-quarter 2026 earnings expectations for S&P 500 technology firms by an average of 8.3%, the largest upward revision for the sector since 2021. Gains are driven by AI-related revenues and improved profit margins.

Amazon Web Services, Microsoft Azure, and Google Cloud each reported increased enterprise migration to AI-optimized platforms. Software firms with AI integration also saw subscription retention rates improve by an average of 12% year-over-year.

While technology remains a bright spot, analysts note that expectations are becoming elevated. Sector rotation opportunities may arise as earnings season approaches, requiring careful monitoring by disciplined market participants.

Also Today: Macro Indicators

Labor Market Gradually Normalizing

November unemployment ticked up to 4.3%, and job openings decreased to 7.2 million, signaling a measured cooling in the labor market. Annual wage growth eased to 3.8%, suggesting less inflationary pressure from labor costs.

According to the Federal Reserve’s Beige Book, the employment landscape is “balanced.” Regional Fed officials continue to emphasize the importance of normalization in achieving sustainable inflation.

Markets welcomed these trends. Bond prices strengthened on expectations of potential rate cuts in early 2026. Labor market metrics remain crucial indicators for those anticipating monetary policy shifts.

Manufacturing PMI Climbs Back Into Expansion

The ISM Manufacturing Purchasing Managers’ Index increased to 50.7 in November, entering expansion for the first time since March 2025. New orders measured 52.3, while employment within the sector remained slightly contractionary at 49.8.

Supply pressures moderated further. Regional surveys mirrored national data, with notable strength in Midwest and Southeast manufacturing.

Historically, recoveries in manufacturing precede broad economic upturns. Investors mindful of cyclical shifts assess these patterns with patience, avoiding overreaction to single data releases.

Market Wrap

S&P 500 Reaches Fourth Consecutive Record

The S&P 500 rose 0.5% to close at 6,847, marking its fourth consecutive record high. Trading volume was moderate at 4.2 billion shares, approximately 5% below the 20-day average, reflecting normal pre-holiday activity.

Technology led gains with a 0.9% advance, benefitting from strength in semiconductors and software. Consumer discretionary stocks rose 0.7%, buoyed by positive holiday retail data. Defensive sectors, including utilities and consumer staples, underperformed amid broader risk-on sentiment. Energy stocks fell 0.6% as crude oil prices declined 1.2% due to global demand concerns.

Key Movers Demonstrate Market Rotation

Amazon gained 2.3% following record holiday sales and improved logistics performance. Best Buy rose 3.8% after analysts cited strong electronics demand.

Broadcom and AMD advanced 2.7% and 3.1% respectively on higher forecasts for AI-related components, while Snowflake climbed 4.2% after announcing new AI partnerships.

Conversely, ExxonMobil and Chevron slipped 1.3% and 1.5%. Healthcare was mixed, with stability among large pharmaceutical firms. Understanding sector rotation remains an essential discipline for traders.

What to Watch

• Major retailer earnings reports begin on 22 January 2026, with Walmart and Target scheduled for 23 January and 28 January respectively.
• The Federal Reserve policy meeting takes place 28 to 29 January 2026, with the rate decision and press conference on the final day.
• December inflation data will be released on 14 January 2026, a critical input for upcoming Fed decisions.
• The fourth quarter GDP advance estimate is set for 25 January 2026, offering comprehensive insight into economic performance.

Conclusion

Robust U.S. holiday spending and gains in the technology sector characterized today’s market press review, reflecting consumer resilience and the emergence of new sector leadership. These factors suggest evolving market momentum as investors consider incoming macroeconomic data alongside established expectations. What to watch: major retailer earnings from 22 January, the Federal Reserve meeting on 28 and 29 January, and December inflation data on 14 January, which will further inform the economic outlook.