Forty-eight hours after the digital dust settled on Cyber Monday 2025, the numbers tell a story of fragile exuberance. While the headlines scream about a record-breaking $14.25 billion in online spending—a 7.1% jump from last year—the investigative reality is buried in the fine print of payment processing. This is not a rally fueled by surplus cash; it is a rally floating on a sea of Buy Now, Pay Later (BNPL) vouchers. Per Adobe Analytics, BNPL usage spiked to $1.03 billion on Monday alone, as American households hit a psychological and financial ceiling.
The Nvidia Paradox and the Burry Bet
Wall Street is currently grappling with a divergence that generic analysts are ignoring. On November 19, Nvidia (NVDA) delivered what should have been a knockout blow to the bears: $57.01 billion in revenue and a 60.5% earnings-per-share growth. Yet, the stock has struggled to maintain its late-summer momentum, closing yesterday around $190. The reason? A massive shift in institutional positioning. We have confirmed through recent filings that SEC 13F data shows Peter Thiel’s Macro Fund has exited its entire Nvidia position. More troubling for the bulls is the resurgence of Michael Burry, who has reportedly placed significant bearish bets via put options on both Nvidia and Palantir as of the third quarter.
This institutional cooling is occurring just as the S&P 500 sits at 6,837.21, down slightly from its late November peak. The liquidity that drove the index up 16% year-to-date is thinning. The 10-year Treasury yield is currently hovering at 4.09%, a level that historically acts as a gravity well for tech valuations. If the yield breaks 4.2% before the year ends, the projected Santa Claus rally could transform into a liquidity trap.
Federal Reserve Roulette on December Tenth
The market is now pricing in an 80% probability that Jerome Powell will announce a 25-basis-point rate cut at the FOMC meeting on December 10, 2025. This would bring the federal funds rate down to a range of 3.5% to 3.75%. However, the internal dissent at the Fed is reaching a fever pitch. According to CME FedWatch data, at least two regional presidents are advocating for a total pause, citing the inflationary pressure of the recently proposed tariff structures.
Investors are misinterpreting the Fed’s recent dovishness as a green light for risk. In reality, the Fed is reacting to a labor market that is cooling faster than official reports suggest. While the unemployment rate remains at 4.6%, the underemployment figures have crept up to their highest level since 2022. Retailers like Walmart and Target have already signaled that while the volume of transactions is high, the margin on those sales is being cannibalized by aggressive discounting required to move inventory.
The Sector Divergence Strategy
Success in this final stretch of 2025 requires looking past the ‘Magnificent Seven’ fatigue. While Apple and Tesla are struggling with hardware saturation and regulatory headwinds, the mid-cap infrastructure sector is seeing a massive capital influx. The following table highlights the divergence in year-to-date returns as of December 1, 2025:
| Sector/Asset | YTD Return (%) | Implied Volatility (VIX) |
|---|---|---|
| S&P 500 (SPX) | +16.2% | 14.8 |
| Nvidia (NVDA) | +43.9% | 72.0 |
| Retail (XRT) | +3.2% | 22.5 |
| Utilities (XLU) | +11.5% | 12.1 |
Watch the Credit Cliff
The structural risk for the next 30 days is the consumer credit cliff. Total holiday online spending is projected to hit $253.4 billion by December 31. If the BNPL share continues to track at its current 11% growth rate, we are looking at $20 billion in short-term, high-interest consumer debt entering 2026. This is the ‘Debt Wall’ that could turn January into a month of forced deleveraging.
Traders should ignore the ‘seasonal goodwill’ narrative. The hard data from Cyber Week suggests a consumer that is maxed out, relying on AI-powered price comparison tools to find the bottom of the market. AI-linked traffic to retail sites increased by 670% this year, according to industry trackers, indicating that shoppers are more price-sensitive than ever before.
All eyes now move to the December 10 FOMC decision. The true test of this market will not be the rate cut itself, but the ‘dot plot’ projections for the first quarter. Watch the 10-year yield for any sign of a spike toward 4.25%—that is the tripwire for a year-end reversal.
