S&P 500 and Dow Jones race to record highs while Nasdaq stalls, as investors rotate into small caps and cyclical stocks after Fed Rate cut

US stock futures were little changed Thursday night(December 11), as investors continued shifting money into economically sensitive sectors after a powerful session that propelled both the Dow Jones Industrial Average and the S&P 500 to new record highs. Dow futures rose 56 points, or 0.1 percent, while S&P 500 futures held just below unchanged and Nasdaq-100 futures slipped roughly 0.2 percent.

According to CNBC website, so far this week, the S&P 500 has risen 0.45 percent, while the 30-stock Dow is up nearly 1.6 percent. The Nasdaq continues to lag, posting gains of less than 0.1 percent. Small caps have been the standout, with the Russell 2000 climbing 2.7 percent and hitting a new all-time high on Thursday.

In extended trading, Broadcom dropped nearly 5 percent even though it topped fourth-quarter expectations and projected a sharp increase ahead, including a potential doubling of AI chip sales this quarter. By contrast, Lululemon jumped 10 percent after announcing that its CEO will depart at the end of January, a move coming after a difficult year for the company.


The 30-stock Dow and the S&P 500 both ended the previous session at record highs, even as the Nasdaq Composite slipped 0.3 percent amid declines in big tech names like Alphabet and Nvidia. The Dow’s 646-point, or 1.3 percent, rally was fueled by a 6 percent jump in Visa, along with strong advances in Nike and UnitedHealth Group.

On Thursday(December 11), investors rotated into economically sensitive cyclical stocks while cashing out of growth names linked to the artificial-intelligence trade. The shift followed the Federal Reserve’s decision a day earlier to cut interest rates for the third time this year.

Chris Zaccarelli of Northlight Asset Management said the Dow’s surge may signal the start of a “broadening-out trade,” with the rest of the market finally stepping up. He added that if the rally can extend beyond the Magnificent 7, the bull run could carry into year-end and early next year.