Broadcom (AVGO) Warning Sparks Tech Pullback
Key Points
- Broadcom's (AVGO) margin warning triggered a tech-led selloff that pressured AI and chip-related names and weighed on growth exposure.
- Softer Chinese industrial production and retail sales readings dented regional sentiment and reinforced hopes for policy support.
- NY and Boston Fed leaders characterized the 25bp cut as appropriate but emphasized a data-dependent path, which tempered aggressive rate-cut pricing and helped firm short-term Treasury yields.
Global Market Summary
U.S. benchmarks finished mixed as the S&P 500 (SPX) slipped 0.10% and the Nasdaq Composite (^IXIC) fell 0.49% amid a tech-led pullback after Broadcom's margin warning, while the Dow Jones Industrial Average (DJIA) was roughly flat, down 0.06%. European indexes outperformed with the FTSE (UKX) up 1.06%, the CAC (FRA40) up 0.70% and the DAX (DAX) up 0.18% on rotation into cyclicals and defensives, while Asian markets closed lower - Nikkei (NKY) -1.31% and Hang Seng (HSI) -1.34% - after softer Chinese industrial production (4.8% YoY) and retail sales (1.3% YoY) readings dented regional sentiment.
Top Movers
Healthcare led gains with XLV (+1.28%) and consumer discretionary XLY (+1.05%). Technology weakness concentrated in VGT (-3.90%), weighing on growth exposure. Notable stock movers included IMNM (+14.92%) among top gainers and RNW (-27.22%) among top losers.
Macro highlights
Softer Chinese activity surprised markets: industrial production rose 4.8% YoY and retail sales grew 1.3% YoY in November, outcomes that pressured regional sentiment and reinforced hopes for policy support. Domestically, NY Fed President John Williams and Boston Fed President Susan Collins characterized the recent 25bp cut as appropriate but emphasized a data-dependent path, which tempered aggressive rate-cut pricing and helped firm short-term Treasury yields.
News that moved markets
Broadcom (AVGO) warned that rising AI system sales could compress margins, triggering a tech-led selloff and pressuring AI and chip-related names and XLK exposure. Later comments that Nvidia (NVDA) is evaluating additional H200 production capacity helped stabilise chip suppliers and softened some of the earlier losses. Completed transactions included Taylor Grant (Park-Equities) completing the all-cash sale of a 3-property, 386-unit hotel portfolio in Baton Rouge; Adecoagro's completion of its acquisition of Profertil; and Ipsen's completion of its acquisition of ImCheck Therapeutics. AssetMark completed the acquisition of Efficient Advisors, LLC, and announced deals included Quantum Computing Inc.'s agreement to acquire Luminar Semiconductor and AMTD Digital's TGE executing an SPA to acquire the Upper View Regalia Hotel.
Upcoming session watchlist
- GB Unemployment Rate (OCT) forecast 5.1% vs 5% prior, Dec 16, 07:00 AM | Informs labor market slack and wage pressure risks for household demand.
- GB S&P Global (SPGI) Manufacturing PMI Flash (DEC) forecast 51.2 vs 50.2 prior, Dec 16, 09:30 AM | Provides early read on manufacturing activity and near term demand trends.
- US Non Farm Payrolls (NOV) vs 119K prior, Dec 16, 01:30 PM | Gauges labor demand and signals wage and inflation pressures.
- US Unemployment Rate (NOV) consensus 4.4% vs 4.4% prior, Dec 16, 01:30 PM | Informs labor market slack and monetary policy expectations.
- US Retail Sales MoM (OCT) consensus 0.2% vs 0.2% prior, Dec 16, 01:30 PM | Shows consumer spending momentum and GDP component strength.
- JP Balance of Trade (NOV) consensus
- ¥71.2B vs ¥-231.8B prior, Dec 16, 11:50 PM | Indicates external demand and trade balance pressures on GDP.
Key Takeaways
- U.S. benchmarks finished mixed: the S&P 500 (SPX) slipped 0.10% and the Nasdaq fell 0.49% amid a tech-led pullback, while the Dow was roughly flat.
- European indexes outperformed on rotation into cyclicals and defensives, with the FTSE up 1.06%, CAC up 0.70% and the DAX up 0.18%.
- Asian markets closed lower after softer Chinese industrial production and retail sales readings, with the Nikkei down 1.31% and the Hang Seng down 1.34%.
References
- 1. https://www.reuters.com/business/finance/global-markets-view-usa-2025-12-15/
- 2. https://x.com/WhiteHouse/status/2000657957693088156
- 3. https://x.com/RapidResponse47/status/2000563997570134261
- 4. https://x.com/BIS_org/status/2000554752577331283
- 5. https://x.com/Bank_of_Japan_e/status/2000538842688856270
- 6. https://x.com/BIS_org/status/2000519729308487907
- 7. https://x.com/Barchart/status/2000356817751486491
- 8. https://x.com/Bank_of_Japan_e/status/2000536655829123090
- 9. https://x.com/Barchart/status/2000612484923764945
- 10. https://x.com/WhiteHouse/status/2000597834211676433
- 11. https://www.reuters.com/business/williams-says-fed-policy-good-position-sees-inflation-moderating-2026-2025-12-15/
- 12. https://www.reuters.com/markets/us/feds-collins-says-supported-rate-cut-it-was-close-call-2025-12-15/
- 13. https://x.com/Bank_of_Japan_e/status/2000430831173783822
- 14. https://x.com/Barchart/status/2000456270596231256
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