Here is Schwab's early look at the markets for Tuesday, December 16.
The long wait ends at 8:30 a.m. ET today when U.S. investors get hot new jobs data fresh off the press. Today's November nonfarm payrolls report--usually released the first Friday of each month--got delayed by the shutdown and represents the most critical economic update ahead of the holidays.
Analysts anticipate about 30,000 jobs created in November, a lackluster reading that would lag far behind 119,000 jobs added in September. October data didn't get collected as normal, but what the government managed to gather will come out. Investors might slightly discount both months' data, anticipating revisions after all the shutdown-related jostling.
"The trend will matter," said Cooper Howard, director of fixed income research and strategy, Schwab Center for Financial Research, or SCFR. "November will be slightly more important than October because it’s more recent. It could also be very noisy given the difficulties in collecting the data."
Today's data could indicate further slowing of jobs growth after June and August both showed job creation falling. A "whisper" estimate out Monday indicated a headline number as low as 15,000, though recent reports haven't often matched estimates on Wall Street.
Other critical numbers to watch in the report include the November unemployment rate--anticipated at 4.4%, according to Briefing.com consensus—and monthly wage growth, which analysts see at 0.3%.
The September jobs report showed faster growth in services sectors like health care, food services, and drinking places, while growth slowed or fell in transportation and warehousing as well as federal government jobs. The shutdown might have affected November's federal government jobs growth, as well.
Investors should also watch for potential revisions to the September jobs data. Recent payrolls reports have often reduced jobs growth from prior months, and Federal Reserve Chairman Jerome Powell said last week he believes the government may be overstating monthly job creation.
The Bureau of Labor Statistics didn't collect household data for October, which it uses to determine the unemployment rate. That month's unemployment rate won't be recorded now or in the future, the BLS said, leaving a gap in data for the first time in 80 years.
At the same time as the jobs report, investors receive October retail sales data. Expectations are for a moderate 0.3% rise month over month, and control group retail sales—which factor into gross domestic product—are another category to keep an eye on. Retail sales growth has been steadily falling since mid-year, but holiday shopping seemed resilient according to many retailers recently reporting earnings.
Recent retail sales reflected softer motor vehicle and parts sales, so investors might want to watch growth outside that category, too, for a wider view.
And there's more. Today also brings delayed September housing starts and building permits data along with industrial production and S&P Global U.S. manufacturing numbers, all before 10 a.m. ET. Markets could get volatile as all the data cross, and the Cboe Volatility Index, or VIX, climbed 4% to around 16.5 Monday following its recent flirtation with three-month lows under 15. Hedging ahead of data seems like the culprit.
Higher volatility often leads to pressure on stocks, and Wall Street also might see pressure if economic numbers come in worse than expected. The dollar dropped after last week's Fed rate cut, while Treasuries also fell before recovering slightly on Monday. Any weakness, especially in jobs growth, could weigh on the dollar if participants start baking in a more aggressive Fed in 2026.
As of late Monday, chances of a rate cut next month were low at 22%, according to the CME FedWatch Tool. Market participants work in around two2026 rate cuts, but the Fed's "dot plot" of rate projections anticipated only one.
"Longer-term, we expect rates to continue to remain rangebound," said Schwab's Howard. "However, a weaker than expected jobs report could send yields lower due to concerns that the economy is slowing more than expected and that the Fed will cut more."
Fed speakers are back following last week's rate cut, and New York Fed President John Williams shared cheerful thoughts Monday. According to the influential official, Fed policy is well positioned heading into 2026 and "the economy is poised to return to solid growth and price stability." He added that monetary policy has moved toward neutral from modestly restrictive.
Treasury yields reached their highest point since September last week, but most of that rally was in the so-called "long end" of the curve. The gap between short-term and long-term yields has reached its widest in three months, helping boost financial stocks lately. Banks benefit when they can borrow at low costs and lend at higher rates.
Earnings start the week slowly but accelerate with chip maker Micron late tomorrow followed by Nike and FedEx Thursday to close out major reporting for the year. All three are worth watching, as they touch different parts of the economy and could serve as barometers.
Yesterday brought a slightly bearish Empire State Manufacturing Index for December, raising fresh concerns about that ailing part of the economy. The headline of -3.9 indicated contraction, as it was below 0. Analysts had expected 10.6, according to Briefing.com, and the prior reading was 18.7.
The poor U.S.. manufacturing number followed soft retail sales and housing data earlier Monday from China. Despite all those readings, the benchmark 10-year yield fell just one basis point Monday, closing at 4.18% and not far below last week's three-month highs. The 10-year yield is now about 50 basis points higher than it was when the Fed began cutting rates in September 2024. Some analysts blamed signs of stronger U.S. housing demand for Monday's yield rise.
In trading Monday, stocks opened hot but quickly cooled as tech selling linked to AI spending worries carried over from last week. Big hitters like Broadcom, Oracle, Alphabet, Microsoft, and Apple weighed down the major indexes even though the percentage of S&P 500 stocks trading above their 50-day moving averages climbed to nearly 60% late in the session from 57% Friday. A sideways, listless trend continued.
A catalyst one direction or the other might be today's jobs data or the inflation numbers later this week. Earnings from Nike, FedEx, and Micron could also play a role. Volume was lighter than normal on Wall Street Monday, possibly as participants held back ahead of the data.
Monday's action followed strong outings last week from cyclical sectors like financials and materials that tend to do better in times of U.S. economic growth. Small-caps hit new all-time highs last week, possibly reflecting the Fed's most recent projections for stronger U.S. growth in 2026 than its prior estimate. However, small caps pulled back Monday.
Monday's sector scorecard belied the slight drop in the S&P 500 index, as eight of 11 sectors rose. Only a 0.9% drop for info tech likely kept it from being a positive day, as health care, utilities, and consumer discretionary all gained 0.75% or more. While it's only a few days, health care appears to be clawing back from recent weakness and remains the leading sector over the last three months by many lengths.
Dragging tech yesterday was Broadcom, which fell another 5.5% after its 11% post-earnings decline Friday, along with CoreWeave, which fell nearly 8%. Semiconductors fell 0.6% as a sector Monday but chip leader Nvidia managed a 0.7% gain.
Nvidia' rise came after Reuters reported that Nvidia has told some Chinese clients that it's evaluating adding production capacity for its H200 AI chips after orders exceeded its output levels. This could indicate better-than-expected demand for these chips in China despite Beijing discouraging the use of U.S. chips.
Tesla climbed 3.5% Monday following Wedbush reiterating its outperform rating and $600 price target. In addition, Tesla confirmed that driverless Robotaxi tests are underway in Austin, CNBC reported.
Bitcoin futures plunged 5% to close below $86,000, dragging crypto-related stocks down as well. The drop in crypto accompanied upward moves in gold and other metals, possibly reflecting rotation out of cryptos and into other assets perceived as alternatives to the dollar.
Many large, industrial stocks did well Monday, including Honeywell, GE Vernova, General Motors, airline shares, and defense industry companies. This could be evidence of positive sentiment stirred by last week's hopeful Fed economic projections.
ServiceNow plunged nearly 11% after Bloomberg reported the company is in talks to acquire cybersecurity firm Aramis in a potential $7 billion deal.
The Dow Jones Industrial Average® ($DJI) lost 41.49 points Monday (-0.09%) to 48,416.56; the S&P 500 index (SPX) dropped 10.90 points (-0.16%) to 6,816.51, and the Nasdaq Composite® ($COMP) fell 137.76 points (-0.59%) to 23,057.41.