Tech Rebounds on AI Hopes, But Dow Lags as Investors Eye Santa Claus Rally

Technology stocks staged a comeback to close out last week, buoying the S&P 500 and Nasdaq, but a sharp drop in Nike shares dragged on the Dow Jones Industrial Average. With markets entering a holiday-shortened week, the key question for investors is whether the much-anticipated Santa Claus rally will arrive on Wall Street.

## A Tale of Two Markets

The tech sector found its footing late last week, calming recent nerves about the artificial intelligence trade. Oracle led the charge, with its shares jumping more than 6% on Friday after TikTok confirmed the software giant as a managing investor for its U.S. venture. Major AI players like Nvidia and AMD also posted gains, reinforcing the renewed confidence.

In contrast, the blue-chip Dow bucked the trend. The primary culprit was Nike, which saw its stock tumble 13% last week after reporting weak sales figures in China. This divergence has set a mixed tone as investors look for the traditional year-end market surge, which historically begins around Christmas Eve.

## Google's AI Talent Strategy: The 'Boomerang' Effect

In the race for AI dominance, Google is increasingly looking to its past. A CNBC report revealed that about one-fifth of all AI software engineers hired by the tech giant this year were “boomerangs”—former employees who have returned to the company. This strategy suggests Google values institutional knowledge as much as fresh talent in staffing its most critical teams.

Meanwhile, Alphabet's driverless ride-hailing service, Waymo, hit a snag. The company temporarily suspended its operations in the San Francisco Bay Area over the weekend following power outages, a reminder of the real-world operational risks facing even the most advanced tech ventures.

## Holiday Shelves: Wellness In, Gaming Out?

Consumer spending habits this holiday season show a clear shift. According to CNBC, wellness products are gaining significant ground, with retailers dedicating more shelf space to supplements and health-focused items. Brands like Grüns are capitalizing on the trend by launching holiday-themed products, hoping to land in stockings that once held candy bars.

On the other end of the spectrum, Microsoft's Xbox may not be a hot-ticket item this year. The gaming console is in a slump, facing headwinds from company layoffs, studio closures, and price increases. The challenges are significant enough that some are questioning the long-term viability of the Xbox brand.

## What to Watch This Week

In other news, the Justice Department on Friday released a portion of its investigative files related to sex offender Jeffrey Epstein, though the release was incomplete despite a legislative deadline. The incident, along with a growing number of anecdotes, highlights the double-edged sword of public exposure, a lesson C-suite executives are learning about the risks of maintaining an active social media presence.