Weekly Outlook 12/08/25
Upcoming Fed rate cut, IWM all time highs, beginning of Santa rally?
Market Recap
It was an overall quiet week, with some minor volatility on Sunday open as BTC fell lower overnight from rumors that Strategy could be selling some of their BTC holdings. The weakness followed into Monday, with MSTR 0.00%↑ reacting to news that it could sell bitcoin if their mNAV dropped below 1x. Both BTC and MSTR 0.00%↑ bounced over the next few days, but the momentum faded toward the end of the week.
Silver showed strength early on but traded mostly sideways afterward. Equity indices were relatively calm, with SPY 0.00%↑ and QQQ 0.00%↑ posting only minor gains, while the clear standout was IWM 0.00%↑, which closed at an all time high on Thursday and continued to show strong relative leadership.
Watchlist
One of the biggest events this week will be the widely anticipated rate cut decision from the Fed on Wednesday, with current probabilities sitting near 86%. With IWM 0.00%↑ already at all time highs, a confirmed cut could help extend the breakout and potentially fuel a broader move in small caps heading into next year.
As Jerome Powell’s term ends in May, market attention has also started to shift toward potential successors. Polymarket currently shows Kevin Hassett as the leading candidate, making Fed leadership an increasingly important factor to watch for future policy direction and rate cut expectations.
Earnings season continues to wind down, but there are still a few notable reports ahead. AVGO 0.00%↑ and ORCL 0.00%↑ will be closely followed given their relevance to the AI narrative. PL 0.00%↑, once a standout in the speculative space sector, is also reporting, along with UEC 0.00%↑, a uranium name that showed clear strength last week.
This week, Politico reported that the incoming Trump administration is considering an executive order on robotics next year, and the news quickly sparked a rally across robotics related names. TSLA 0.00%↑ stood out as the most notable mover, given its position as one of the only publicly traded companies developing a humanoid robot. In the small cap space, SERV 0.00%↑ and RR 0.00%↑ posted strong rebounds after enduring major corrections since October. On the microcap side, KITT 0.00%↑ and IRBT 0.00%↑ also surged on the headline, though both have already retraced a significant portion of their initial moves.
On Friday, Bloomberg reported that SoftBank was in talks to buy DigitalBridge Group DBRG 0.00%↑, sending the stock up about 45% by the close. Analysts quickly weighed in on potential valuation ranges, with Wells suggesting SoftBank would need to offer at least $18 to $20 per share, while JPMorgan outlined a possible acquisition price between $25 and $35.
There was also a wave of speculation late Friday that Elon Musk’s SpaceX is targeting an $800 billion dollar valuation alongside a potential 2026 IPO. The rumor sparked a sharp move across several related names. SATS 0.00%↑ rallied on the news given its share stake in SpaceX acquired from a recent deal, while ASTS 0.00%↑ and RKLB 0.00%↑ saw sympathy gains as publicly traded space companies. DXYZ 0.00%↑, a closed end fund with exposure to private SpaceX shares, also benefited from the headline.
Datacenters remain a key theme within the broader AI boom, and the sector continues to be one of the more closely watched areas of the market. CIFR 0.00%↑ and WULF 0.00%↑ stand out as the strongest names technically, both still maintaining clear uptrends. Among the larger incumbents, ORCL 0.00%↑ and CRWV 0.00%↑ have begun to turn off their lows following the October selloff.
Trade Highlights
PATH 0.00%↑ earnings beat breakout, along with robotics sector being hot theme after Trump admin news:
RR 0.00%↑ robotics stock breaking out of a downtrend on the executive order news:
SMR 0.00%↑ was a beaten down nuclear stock that rallied with the broader speculative stock basket on Thursday:
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Excellent catch on the SpaceX sympathy play angle. The valuation jump to $800B is obviously grabbing headlines, but what's more intresting is how this legitimizes the comercial space sector for institutional money that's been sitting on the sidelines. RKLB benefits not just from near-term momentum but from the broader narrative that private space companies can actually scale profitably. If SpaceX does go public in 2026, it essentially validates the entire sector's path to maturity, which could pull forward capital allocation into names like Rocket Lab that are already trading publicly. The timing with smallcap strength makes this setup even cleaner.