Stock Market Today, Dec. 19: AI Optimism and Inflation Data Buoys Stocks

The S&P 500 (SNPINDEX:^GSPC) rose 0.88% to 6,834.50, the Nasdaq Composite (NASDAQINDEX:^IXIC) gained 1.31% to 23,307.62 on tech strength, and the Dow Jones Industrial Average (DJINDEX: ^DJI) added 0.38% to 48,134.89, all navigating volatile quad‑witching flows.

Market movers

AI‑linked and broader tech names led market gains today. Strength in Oracle (NYSE:ORCL) and Micron Technology (NASDAQ:MU) bouyed prices while consumer stocks lagged. Nike (NYSE:NKE) and Lamb Weston (NYSE:LW) slid on underwhelming earnings and guidance, weighing on retail and staples.

What this means for investors

Quadruple witching is something that happens four times a year, and today -- the third Friday of December -- was one. It's when stock index futures, stock index options, stock options, and single stock futures all expire at the same time. These are often days with high trading volumes and a lot of volatility, which was borne out by today's choppy swings.

This week's reports of cooling inflation and a softer labor market have reinforced expectations that the Fed will cut rates again early next year. However, Apollo Global Management warned that stagflation is a major risk next year, especially if AI does not deliver.

Meanwhile, mixed results from Nike and Lamb Weston underscore challenges in consumer-facing sectors. Nike beat analyst earnings and revenue estimates, but the stock fell due to investor concern over profits and sales in China. On a related note, the University of Michigan revised its December consumer sentiment expectations downwards due to high prices and weak hiring.

Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike and Oracle. The Motley Fool has a disclosure policy.