Wall Street Edges Higher as Weak ADP Jobs Report Fuels Fed Rate Cut Hopes
- Why Did Wall Street Rally Despite the Jobs Miss?
- Marvell’s AI Bet Pays Off
- Retailers Shine with Upbeat Guidance
- Economic Data: Mixed Signals
- Rivian’s Safety Recall Casts Shadow
- FAQs: Your Burning Questions Answered
U.S. markets ticked upward on December 4, 2025, as investors digested a surprising ADP report showing a loss of 32,000 private-sector jobs in November—far worse than the expected 5,000 gain. The data bolstered expectations of a Federal Reserve rate cut next week. Chipmaker Marvell Technology surged 4.2% after raising its data center revenue forecast and announcing a $5.5 billion acquisition of AI startup Celestial AI. Meanwhile, retailers like American Eagle and Macy’s outperformed earnings estimates. Here’s a DEEP dive into the day’s market-moving events.
Why Did Wall Street Rally Despite the Jobs Miss?
Odd as it sounds, bad news was good news for traders. The ADP report’s unexpected job losses (32,000 vs. +5,000 expected) reinforced bets that the Fed will pivot to rate cuts at its December meeting. "Markets are pricing in a 70% chance of a 25-basis-point cut," noted a BTCC analyst. The Dow rose 0.4% to 47,664, while the Nasdaq eked out a 0.06% gain to 23,427. Even softer PMI (54.1 vs. 55 expected) and ISM services (52.6) data added fuel to the dovish narrative.
Marvell’s AI Bet Pays Off
Marvell Technology (MRVL) stole the spotlight, jumping 4.2% to $96.80 after boosting its data center revenue growth forecast to "over 25%" for FY2026—up from 18% in September. The chipmaker also unveiled plans to acquire optical interconnect specialist Celestial AI for up to $5.5 billion. CEO Matt Murphy touted the deal as a "game-changer for AI infrastructure," citing synergies with Marvell’s existing cloud and hyperscaler partnerships. Remember their $2.5 billion Infineon deal in August? That divestiture already padded their balance sheet with a $1.8 billion pre-tax gain.
Retailers Shine with Upbeat Guidance
Three retailers made waves in pre-market trading:
- American Eagle (AEO): Soared 12.9% after raising full-year comparable sales guidance to "low-single-digit growth" from flat. Q3 comps hit 4%, crushing the 2.4% estimate.
- Dollar Tree (DLTR): Lifted annual EPS forecast to $5.60-$5.80 (vs. $5.32-$5.72) following a Q3 beat ($1.21 EPS vs. $1.09 expected).
- Macy’s (M): Revised sales targets upward for the second time this year, now projecting $21.5B-$21.6B in annual revenue and $2.00-$2.20 EPS.
Economic Data: Mixed Signals
Beyond the ADP shocker:
| Metric | November 2025 | Expectation |
|---|---|---|
| ISM Non-Manufacturing | 52.6 | 52.0 |
| Industrial Production (MoM) | +0.1% | +0.1% |
| Oil Inventories | +0.57M barrels | -1.9M barrels |
Fun fact: The "stable" import price index spared traders from inflation jitters—for now.
Rivian’s Safety Recall Casts Shadow
Not all headlines were rosy. EV maker Rivian (RIVN) announced a recall of 35,000 vehicles due to faulty seatbelt anchors—a costly setback as it battles Tesla’s Cybertruck rollout. NHTSA warned the defect could "increase injury risk during collisions." Shares dipped 1.8% in after-hours trading.
FAQs: Your Burning Questions Answered
How does weak jobs data lead to stock gains?
Paradoxically, negative economic indicators can boost markets by increasing odds of Fed stimulus. Lower rates = cheaper borrowing = higher corporate profits.
Why is Marvell’s AI acquisition significant?
Celestial AI’s optical tech could revolutionize data center efficiency—key for AI workloads. The $5.5B price tag reflects Marvell’s "go big or go home" AI strategy.
Should I buy retail stocks after their earnings pop?
This article does not constitute investment advice. That said, Macy’s 2025 guidance suggests consumer resilience, but watch holiday sales data.
