Global Central Banks Turning Hawkish: Market Impacts on Stocks, Dollar, and AI Sector

On December 11, 2025, Michelle Gibley of Charles Schwab stated in a YouTube video [5] that global central banks are turning hawkish, discussing implications for stocks and the U.S. dollar while noting markets still cling to the AI capital expenditure (CapEx) narrative. This aligns with recent central bank actions: on December 10, the U.S. Federal Reserve cut rates by 25 bps but signaled a potential pause, a “hawkish cut” interpreted as prioritizing future inflation control [1][2]. Reuters reported major global central banks edging back toward hiking mode after prolonged easing [3].

Short-term market movements (December 11) reflected competing pressures: the Fed’s cut initially boosted sentiment, but hawkish forward guidance and an Oracle (ORCL) selloff (linked to higher-than-expected AI CapEx) dragged tech stocks [4]. The S&P 500 rose 0.13%, while the tech-heavy NASDAQ fell 0.26% [0]. AI leader NVIDIA (NVDA) declined 1.23% (extending a 3-day drop), as Oracle’s 13.41% selloff spilled over into AI equities, raising valuation sustainability concerns [0][4]. The DXY fell 0.1% to 98.667, despite hawkish signals, as markets focused on Fed Chair Jerome Powell’s labor market risk prioritization over inflation [4].

1. Competing Market Drivers
   : The Fed’s immediate rate cut (supportive of growth assets) clashed with hawkish forward guidance and AI CapEx scrutiny, creating mixed stock performance.
2. AI Sector Vulnerability
   : Oracle’s selloff and NVDA’s decline signal growing investor caution about AI sector valuations, which have driven 2025 market gains.
3. Dollar Sentiment Discrepancy
   : The DXY’s unexpected decline highlights that market sentiment prioritized the Fed’s immediate cut and labor market focus over long-term hawkish guidance.

• AI Sector Correction
  : The Oracle/NVDA selloffs signal potential profit-taking in AI stocks; a broader correction could impact major indices [0][4].
• Central Bank Policy Error
  : Aggressive tightening amid labor market weakness could slow growth or trigger recession [1][2][3].
• Dollar Volatility
  : The DXY’s decline despite hawkish signals suggests uncertainty; a sudden reversal could impact commodities and emerging markets [4].

• Non-Tech Stability
  : Sectors less sensitive to rates and AI valuations may offer relative resilience amid tech volatility [0].
• Value Investing
  : Undervalued stocks with strong fundamentals could attract capital as markets shift from AI growth stories.

• Event
  : Gibley’s analysis of hawkish global central banks and market implications [5].
• Policy Context
  : Fed’s 25 bps “hawkish cut”; global central banks edging toward hikes [1][2][3].
• December 11 Market Movements
  : S&P 500 +0.13%, NASDAQ -0.26%, NVDA -1.23%, DXY -0.1% [0][4].
• Critical Monitor Points
  : Earnings from AI infrastructure firms (Broadcom, Micron), delayed payroll data, central bank speeches, and DXY performance [4].