On Monday, December 15, 2025, U.S. equity and bond markets staged a cautious rebound after a severe artificial intelligence-led selloff late last week. This shift happened as traders digest mixed signals from tech heavyweights and anticipate the crucial November payrolls data tomorrow. Meanwhile, disappointing Chinese economic figures continue to weigh on global sentiment, underscoring broader growth concerns.

Rebound Follows Sharp Turmoil in AI Stocks

The AI sector faced intense pressure last week, with Oracle and Broadcom—the sector’s key bellwethers—plunging 18% and 11% respectively on Thursday and Friday. Nvidia, a dominant AI chipmaker, dropped 3% on Friday amid the turmoil but edged up 0.8% Monday. Nvidia’s rebound came after reports that the company is evaluating increased production capacity for its H200 AI chips, driven by unexpectedly strong orders from Chinese clients.

While the Nasdaq Composite fell 1.6% on Friday due to tech weakness, other indexes diverged. The Dow Jones Industrial Average climbed 1% on Friday to hit a record high, reflecting rotation into less tech-heavy sectors. U.S. index futures opened broadly higher Monday, supported by a retreat in long-dated Treasury yields after last week’s spikes to three-month highs.

Bond Market Sees Temporary Relief Amid Mixed Influences

Long-dated Treasury yields, which had surged—with the 30-year bond yield hitting three-month highs—softened overnight, easing pressure on fixed income investors. However, bond markets face key tests this week, including the long-delayed November payrolls release on Tuesday and a sizable 20-year U.S. note auction Wednesday. Adding to uncertainty, the Bank of Japan is widely expected to raise interest rates on Friday, with potential global ripple effects on bond yields.

Political developments have also influenced market dynamics. President Donald Trump recently narrowed his choice for the Federal Reserve chair to former Fed Governor Kevin Warsh or White House economic adviser Kevin Hassett. Following Trump’s announcement, market odds shifted sharply: Hassett’s chances dropped to 51% from 75%, while Warsh’s prospects rose to 40% from 14%, reflecting investor recalibration ahead of the Fed appointment.

Global Economic Indicators: China’s Slowing Growth and Regional Market Divergence

China’s latest economic data points to a deceleration in growth momentum. Factory output growth slowed to a 15-month low, and retail sales posted their weakest performance since Beijing abruptly ended the zero-COVID policy. Meanwhile, property prices continued to fall, intensifying concerns as state-backed developer China Vanke scrambled to secure bondholder approval to stave off an imminent onshore debt default.

Despite these headwinds, the Chinese yuan rallied to its strongest level against the U.S. dollar in over a year. Nonetheless, Chinese stocks declined on Monday amid the weak data. In contrast, regional markets such as Tokyo and Seoul experienced steeper losses.

European equities showed relative strength, led by Britain’s FTSE 100, which outperformed amid growing expectations that the Bank of England will cut interest rates this Thursday. The European Central Bank, however, is expected to maintain its current policy stance despite recently hawkish commentary by its leadership. Japan’s manufacturing sentiment also improved, bolstering expectations of the Bank of Japan’s impending rate hike.

Commodities and Cryptocurrencies: Volatility Continues

Bitcoin fell back below $90,000 over the weekend amid ongoing volatility but stabilized by Monday morning. Precious metals remain in favor with gold and silver rising as investors seek safe-haven assets amid economic uncertainty and geopolitical tensions.

Rebound: Market Outlook

The U.S. markets’ rebound on December 15 comes as investors balance recent severe AI-sector selloffs with persistent macroeconomic and geopolitical uncertainties. Key focus now centers on tomorrow’s delayed U.S. November payrolls report and upcoming central bank actions, which will likely determine whether this rebound extends into year-end trading. Meanwhile, China’s ongoing economic challenges and shifting Federal Reserve chair prospects add layers of complexity to global market dynamics.