Next Day Prep: Small Caps Soar Fed Boosts Bulls, Sparks Record Highs
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
Welcome to Next Day Prep – What We Are Watching Tomorrow! A massive session unfolded on Wednesday, December 10th, 2025. The Fed’s decision led to a bullish market mood, particularly favoring small caps that surged to record highs. The risk-on sentiment has returned, indicating a shift in market character.
Overnight Headlines
- Fed Announcement: The Fed’s 25 basis point cut and data-driven stance fueled market optimism.
- Market Reaction: S&P 500 up 0.7%, Dow up over 1%, Russell 2000 soared 1.3%.
- Liquidity Boost: Fed announced $40 billion Treasury bills purchase monthly.
Economic Announcements
Summary of Economic Projections revealed upgraded real GDP growth to 2.3% and lower inflation forecasts, painting a Goldilocks scenario for the economy.
Earnings Highlights
GE Vernova (ticker GEV) stole the show with a 15% rally to all-time highs on strong data center demand. Consumer giants like Amazon and Tesla also marked positive gains.
Top Movers
- Industrial Renaissance: Industrials surged 1.8%, led by GE Vernova’s monumental rally.
- Consumer Discretionary: Amazon, Tesla, and JPMorgan posted notable gains.
Quick Trade Ideas
- Semiconductor Plays: Watch Western Digital (WDC) and Pure Storage (PSTG) for breakout opportunities.
- Industrial Strength: Keep an eye on Eaton Corp (ETN) and United Airlines (UAL) for potential blue-sky breakout setups.
Key Takeaway
For tomorrow’s trading session, monitor the opening half-hour range closely. Maintain focus on continuation plays in sectors showing strength like storage, electrical infrastructure, and airlines. Stay tactical and respond to market signals with a watchlist prepared for potential breakouts.