Power Off. Tech stocks dropped on Monday, dragging the three major indexes down with them as investors prepare for another wave of delayed economic data.

The tech-heavy Nasdaq Composite fell 0.6%, while the Dow Jones Industrial Average fell 0.1% and the S&P 500 dropped 0.2%.

Some investors were likely taking profits in AI stocks after years of outperformance. Bond yields also had a lot to do with it. Yields across the Treasury curve rose Monday. My colleague Jacob Sonenshine explains that higher long-dated yields hurt tech stocks the most because they’re valued on profits and cash flow that are far into the future.

But investors were also likely nervous about the latest reads on both the labor market and consumer spending that we’re getting tomorrow morning.

“This week’s jobs data could be more important for equities’ perception of interest rate policy going forward than last week’s FOMC meeting,” writes Mike Wilson, Morgan Stanley’s chief U.S. equity strategist.

In a perfect world, the jobs and retail sales reports would paint the picture of an economy that isn’t running too hot or too cold.

From a labor market front, that means ongoing jobs growth and a stable unemployment rate—but not stable enough to dissuade the Federal Reserve from cutting rates a few more times. The same goes for spending: Investors would love to see that consumers are spending enough to keep the economy growing but not so much that would spark fears about inflation reigniting.

But it isn’t a perfect world. And even before the release is out, economists are warning that the data will be hard to interpret and may not offer as much insight as the market would like.

“Extraordinary factors from the government shutdown to sweeping federal workforce restructuring will distort headline figures and mask the true underlying pace of job growth,” writes Lydia Boussour, senior economist at EY-Parthenon.

The retail sales release will be easier to interpret, but the data—from October—will be slightly stale. Economists expect the results will show that while consumers kept spending throughout the fall, they pulled back on certain categories as they did in September.

The Hot Stock: Gartner +5.3%
The Biggest Loser: ServiceNow -11.5%

Best Sector: Healthcare +1.3%
Worst Sector: Information Technology -1%

…about the appeal of self-driving cars.

As someone who hates driving, I’m all here for the self-driving car revolution.

Alphabet’s Waymo robo-taxis have been navigating this brave new world for a while (successfully, for the most part). And now Tesla may be catching up.

Al Root, our resident car expert, recently took Tesla’s highest-level driver assistance product, Full Self-Driving (FSD), for a spin. His conclusion is set to make Tesla investors happy: the technology is improving.

In September 2023—the first time Al reviewed FSD—the drive felt like a “mash of a teenager with a learner’s permit and an octogenarian.” This time around, he says, the system was smoother and less jerky. He understands why CEO Elon Musk is convinced that anyone who tries the software won’t be able to live without it.

“It just might be the better driver,” Al wrote.

FSD’s improvements carry big implications for Tesla stock. Investors believe that AI-trained self-driving cars will convince hundreds of thousands of Tesla drivers to sign up for driver assistance and kick-start the expansion of Tesla’s new robo-taxi platform. The company launched a robo-taxi service in Austin in June. Until recently, safety monitors had to sit in the front passenger seat, but on Sunday, Musk announced that “testing is under way with no occupants in the car.”

Those efforts could unlock a new era of earnings growth that could justify the company’s $1.5 trillion valuation and 222 price-to-earnings ratio.

Read more about Al’s test drive here.

Lennar reports fourth-quarter fiscal-2025 results tomorrow.

The Bureau of Labor Statistics releases the jobs report for November, along with partial October data that was delayed by the record-long government shutdown. Economists forecast a 40,000 increase in nonfarm payrolls, after a 119,000 gain in September. The unemployment rate is expected to remain unchanged at 4.4%.

The Census Bureau reports retail sales statistics for October. Consensus estimate is for a 0.1% month-over-month increase, which would match September’s rise.

S&P Global releases both its Manufacturing and Services Purchasing Managers’ Indexes for December.

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