Nasdaq Composite Regains Momentum as Manufacturing Data Sparks Rate Cut Optimism

Nasdaq Composite Regains Momentum as Manufacturing Data Sparks Rate Cut Optimism

The Nasdaq Composite regained momentum on December 2, 2025, climbing 0.79% to 23,459 after Monday's 0.38% dip to 23,276, fueled by weaker-than-expected ISM manufacturing PMI data that reinforced 87% odds of a Federal Reserve 25-basis-point rate cut at its December 10 meeting.​

Manufacturing Data Catalyst

The ISM manufacturing PMI unexpectedly fell to 48.2 in November from 48.7, marking the ninth straight contraction month and missing economist forecasts of 49.0, with new orders at 47.4 and employment at 44.0 signaling economic softening. Production rebounded to 51.4, but prices ticked up to 58.5, highlighting persistent input cost pressures amid tariff concerns. This dovish signal boosted risk assets, as lower rates reduce borrowing costs for tech-heavy Nasdaq components sensitive to discount rates.​

Market Performance Snapshot

Major indices stabilized post-Monday selloff, with S&P 500 up 0.32% to 6,834 and Dow edging 0.05% higher to 47,315, ending a five-day win streak. Tech leaders like Nvidia rose 2.83% to $185 amid AI optimism, while chip peers Intel and Marvell gained over 2%; utilities dragged early but recovered. VIX fear gauge eased 5% to 16.35, reflecting renewed bullish tone above 23,360 support near the 20 EMA.​

Rate Cut Expectations and Outlook

FedWatch tool shows 87.6% probability of a December cut following two 2025 reductions, with traders eyeing Wednesday's CPI data ahead of the FOMC. Nasdaq futures targeted 23,500, supported by bullish RSI/EMA crossovers and golden crossover at 22,950, though AI debt exceeding $120 billion tempers growth stock enthusiasm. Year-to-date, Nasdaq rallied amid AI capex, but volatility lingers from high valuations and policy shifts.

Semiconductors and technology sectors led the Nasdaq Composite's rally on December 2, 2025, following the ISM manufacturing PMI miss at 48.2, which boosted Fed rate cut odds to 96% and favored growth stocks sensitive to lower rates.​

Leading Sectors

• Semiconductors: Surged over 2-3% on average, with the Philadelphia Semiconductor Index gaining amid AI optimism and capex tailwinds; benefited most from dovish data reducing discount rates on high-valuation chipmakers.​

• Technology/Software: Up 1-2%, driven by earnings beats; broader tech rotation supported Nasdaq's 0.79% advance to 23,459.​
  Utilities and industrials lagged initially but stabilized, while biotech saw profit-taking post-rally.​

Top Gainers

Stock	Gain	Catalyst
Nvidia (NVDA)	+2.8%+	AI leadership, rate-sensitive growth profile ​
Intel (INTC)	+2%+	Chip recovery, undervalued vs. peers ​
AMD	+2%+	Semiconductor momentum ​
Marvell (MRVL)	+2%+	Earnings preview strength ​
KLA (KLAC)	+2%+	Equipment demand ​
Lam Research (LRCX)	+2%+	Wafer fab exposure ​

MongoDB (+24%) and Credo Technology (+17%) spiked on Q3/Q2 earnings beats, amplifying software leadership. Boeing (+7%) aided industrials crossover but Nasdaq stayed tech-led.