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IT hardware stocks, including Western Digital which fell 4.76%, declined after a Morgan Stanley report on December 17, 2025, warned of cyclical challenges for the sector in 2026.
Western Digital reported its non-GAAP gross margin expanded 660 basis points year-over-year to 43.9% in Q1 fiscal 2026, driven by strong AI-related demand for its high-capacity hard drives.
Seagate's stock rose 118.3% in six months, driven by strong data center demand for its high-capacity storage solutions as the AI market expands.
The U.S. Federal Reserve enacted its third interest rate cut of 2025, moving the benchmark rate to a 3.50%-3.75% range. However, guidance suggesting only one additional cut in 2026 has introduced uncertainty, prompting varied and complex reactions across financial markets as investors reposition for a new monetary policy environment.
Zacks Investment Research has added five new companies to its coveted Zacks Rank #1 (Strong Buy) list, signaling a bullish outlook based on positive revisions to their earnings estimates. This move comes as the market weighs the continued dominance of AI against a potential boom in cyclical sectors.
Zacks Investment Research designated JOYY (YY), Seagate Technology (STX), and Roku (ROK) as #1 Strong Buy stocks, presenting them as income opportunities. This classification favors technology and growth-oriented firms, a notable departure from traditional income investments which are typically stable, high-dividend companies.
The U.S. Securities and Exchange Commission has stopped the approval of exchange-traded funds offering more than 2x daily leverage, citing non-compliance with derivatives regulations. This impacts product issuers and signals a stricter stance on complex retail-focused products.
Alnylam Pharmaceuticals (ALNY) will be added to the Nasdaq-100 Index on December 22, 2025. This significant event provides a strong institutional buying catalyst, directly countering recent market concerns about near-term growth headwinds and a lack of late-stage pipeline news.
Seagate Technology (STX) stock has demonstrated significant outperformance against the Nasdaq index, fueled by robust first-quarter earnings and surging demand for data storage solutions. This reflects a broader market re-evaluation of companies providing critical infrastructure for the AI-driven data economy.