Ever have one of those mornings where the economic news looks downright terrible – and the stock market throws a party anyway? Welcome to Wednesday’s close and Thursday’s pre-market mood.
Something fascinating is happening right now. The worse the labor data gets, the happier traders seem to become. It’s the ultimate “bad news is good news” scenario, and yesterday delivered it in spades.
Why Weak Jobs Numbers Sent Stocks Soaring
Let me paint the picture. Private payrolls didn’t just miss expectations in November – they actually shrank by 32,000 jobs. That’s the kind of number that would normally trigger panic selling. Yet the Dow finished up more than 400 points. What gives?
The answer is simple, though somewhat counterintuitive to anyone who doesn’t live and breathe markets: Every sign of economic weakness right now gets interpreted as another reason the Federal Reserve will cut interest rates at their December meeting.
Think about it this way – traders have been starving for confirmation that the Fed still has their back. When the labor market shows cracks, it strengthens the case for easier monetary policy. And easier policy means cheaper borrowing, higher stock valuations, and basically rocket fuel for risk assets.
The market is doing exactly what it’s supposed to do when growth slows but inflation is cooling – pricing in accommodation.
– Market strategist, December 2025
Overnight, the probability of a December rate cut jumped from under 70% a month ago to nearly 89% according to futures pricing. That’s a massive swing in just weeks.
The Broader Labor Market Cooling
This isn’t just one bad data point either. We’re seeing a clear pattern emerge:
- Private payrolls unexpectedly contracted for the first time in years
- Layoff announcements reached their highest level since 2020
- Job openings have been trending lower for months
- Wage growth, while still solid, is decelerating
In my view, this cooling labor market might actually be exactly what the Fed wants to see. They’ve been saying they need confidence that inflation is sustainably moving toward 2%. A gradually softening job market without plunging into recession territory gives them the cover they need to ease policy.
Salesforce Delivers the Goods (Again)
While everyone was focused on the macro picture, one of the market’s most important software companies quietly crushed earnings after the bell.
Salesforce shares were trading up sharply in the pre-market after reporting results that reminded everyone why it’s still considered enterprise software royalty. The company beat on earnings per share by a wide margin and – perhaps more importantly – raised guidance in a meaningful way.
The real story here though? Their AI initiative is gaining serious traction. Annualized revenue from their Agentforce platform surged 330% year-over-year. That’s not just growth – that’s the kind of acceleration that gets investors genuinely excited about the AI spending thesis playing out in real time.
I’ve been skeptical about some of the AI hype in enterprise software, but numbers like these make it hard to stay cynical. When a company with Salesforce’s maturity profile starts posting triple-digit growth in a new product line, you have to pay attention.
Nvidia’s CEO Makes the Washington Rounds
Speaking of AI, the most important company in that entire conversation had its leader back in Washington yesterday.
Nvidia’s Jensen Huang spent the day meeting with both the incoming administration and lawmakers on Capitol Hill, primarily discussing chip export restrictions. His message was consistent: Heavy-handed restrictions hurt American competitiveness more than they help national security.
What’s particularly interesting is how Huang broke with some other tech CEOs on the question of state-level AI regulation. He argued forcefully that a patchwork of different state rules would be devastating for innovation and actually create national security risks by slowing American AI development.
This matters because the regulatory environment for AI chips is one of the biggest wildcard factors for Nvidia’s growth trajectory. Any easing of export restrictions or clarity on the regulatory front could be massively positive for the stock.
The Vaccine Policy Earthquake Coming Today
In what might be the most consequential non-market event of the day, the Advisory Committee on Immunization Practices meets today to vote on something that’s been standard practice for decades: recommending hepatitis B vaccination for newborns within 24 hours of birth.
The committee was hand-picked by the new Health and Human Services leadership, and while the outcome isn’t predetermined, any change to this longstanding recommendation would send shockwaves through public health policy.
Public health experts warn that removing this recommendation could lead to higher rates of chronic hepatitis B infection in children, with potentially serious long-term consequences. This vote could mark one of the first major tests of how the new administration approaches established medical consensus.
General Motors Gets a Silicon Valley Makeover
Finally, an under-the-radar move that could have massive implications for one of America’s legacy automakers.
General Motors just brought in a genuine Silicon Valley heavyweight as their new executive vice president and chief product officer. This isn’t just another Detroit shuffle – they’re bringing in someone who helped build Tesla’s Autopilot program and co-founded an autonomous vehicle startup.
The mandate is clear: accelerate innovation and bring a more unified, aggressive approach to product development. In an industry being completely reshaped by software and electrification, this might be one of the most important hires GM has made in years.
The timing couldn’t be better either. With the new administration signaling friendlier policies toward domestic manufacturing and potentially reduced tariffs on South Korean imports (where GM sources significant volume), the setup for Detroit’s comeback story is improving.
Look, I’ve been covering markets long enough to know that December can deliver some of the wildest swings of the year. Between Fed meetings, year-end positioning, and now a completely new policy environment taking shape, we’re in for an interesting ride.
The labor market data suggests the economy is cooling exactly as the Fed hoped. Corporate America, particularly in tech, continues to execute at a high level. And policy risks that worried markets for months appear to be evolving in ways that might actually prove constructive.
Of course, nothing moves in a straight line. But right now, the path of least resistance for stocks appears to be higher – at least until we get concrete evidence that something has broken in this carefully choreographed soft landing.
Stay nimble out there. December just got interesting.
