CNBC Markets Now: December 3, 2025 - Midday Market Update

Good afternoon, and welcome back to Markets Now on this brisk December 3rd, 2025. Can you believe we're already just weeks away from ringing in a new year? The market, it seems, is still trying to figure out if it wants to go out with a bang or a whimper, as investors weigh a mix of resilient economic data against some persistent, underlying concerns.

Looking at the major indices at midday, it’s a bit of a mixed bag, truly. The Dow's managing to hold onto some modest gains, clinging just above yesterday's close, while the S&P 500 is showing a slight bounce, maybe hinting at a late-year push. But over on the Nasdaq, we're seeing a touch of profit-taking, particularly in some of those high-flying tech names that have led the charge for much of the year. It just goes to show, even in December, the market can keep you on your toes.

Economically speaking, there’s a lot to unpack. We just got the latest read on consumer sentiment, and frankly, it paints a picture of cautious optimism. People are still spending, particularly as we gear up for the holiday season, but there’s definitely an eye on the future – on job security and, yes, still on inflation. The Fed, as you'd expect, remains a dominant force in the narrative. Their last meeting minutes, released just yesterday, reinforced their 'wait-and-see' approach on interest rates. It seems they're still keen to ensure inflation is truly tamed before even contemplating any significant policy shifts, even if the latest PCE numbers show some encouraging cooling.

Now, let's talk about the elephant in the room – or perhaps, the AI in the room. Artificial intelligence continues to be a monumental theme, profoundly shaping the tech landscape. But here’s the thing: we're arguably moving beyond the initial hype cycle. Investors are becoming more discerning, differentiating between companies simply talking about AI and those actually monetizing it. We're seeing strength in the foundational infrastructure plays, the companies providing the chips and the cloud services, but also a growing appreciation for niche AI applications that are solving real-world problems in sectors like healthcare and manufacturing. It's not just about who's got the biggest language model anymore; it's about practical, scalable integration.

Beyond tech, the energy sector is always a fascinating story, isn't it? The push for renewable energy sources continues unabated, fueled by both environmental imperatives and significant government incentives. Yet, traditional oil and gas remain critically important, especially with ongoing geopolitical uncertainties that can, and do, send ripples through global supply chains. It’s a delicate balancing act, and you see that reflected in the often-volatile swings within the energy markets.

So, as we edge closer to year-end, what should investors be watching? Well, the continued health of the consumer is paramount, particularly as holiday spending reports start trickling in. Any surprises there could certainly move the needle. And, of course, the next round of inflation data will always be under a microscope, guiding expectations for future Fed policy. Are we setting up for a traditional 'Santa Claus rally,' or simply a period of careful repositioning before we dive into 2026? Only time will tell, but one thing's for sure: the market never stands still. That's all for today on Markets Now; we'll catch you next time.