Weekly Market Insights

Stocks trended lower last week amid signs of year-end profit-taking and some sour investor sentiment over the Fed meeting minutes.

The Standard & Poor’s 500 Index fell 1.03 percent, while the Nasdaq Composite Index lost 1.52 percent. The Dow Jones Industrial Average slid 0.67 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, ticked up 0.31 percent.^1,2

Santa Rally, Interrupted

Stocks opened lower to start the shortened holiday week with tech shares under pressure. Markets then moved sideways, but came under pressure after minutes from the December Federal Reserve meeting were released. Investors digested the details, which showed members remained divided.^3,4

Stocks recovered some ground on the first trading day of 2026. The tech sector was mixed, with AI chip stocks pushing higher, while other areas of technology, especially software companies, declined. Overall, the S&P 500 and Dow Industrials logged gains to kick off the new year, which helped pair losses from earlier in the week.^5,6

It remains to be seen whether the “Santa Claus rally”, which ends Monday, January 5, will materialize. The Santa period is the last five trading days of December through the first two trading days of the new year.

Focus on the Fed

There was little economic data last week, leaving investors to focus mostly on the minutes from the Fed’s December meeting. The minutes, released Tuesday, revealed a divided Federal Open Market Committee regarding short-term interest rates. The news unsettled investors a bit, which led to some selling pressure.⁷

A divided Fed has been a persistent theme during the second half of 2025, and investors will closely watch in 2026 to see whether the Fed’s outlook may change with the appointment of a new Fed Chair.

Footnotes And Sources

<sup>1 .WSJ.com, January 2, 2026
2. Investing.com, January 2, 2026
3. CNBC.com, December 29, 2025
4. WSJ.com, December 30, 2025
5. CNBC.com, December 31, 2025
6. CNBC.com, January 2, 2026
7. CNBC.com, December 30, 2025</sup>

Stocks delivered for investors last week as positive economic data and bullish holiday cheer powered the start of a “Santa Claus rally” past consumer bah humbug sentiment.

The Standard & Poor’s 500 Index rose 1.40 percent, while the Nasdaq Composite Index advanced 1.22 percent. Meanwhile, the Dow Jones Industrial Average gained 1.20 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, moved ahead 1.16 percent.^1,2

AI Stock Sleigh Delivers

Stocks rallied at the start of the week, riding pre-holiday momentum as artificial intelligence (AI) related technology names continued to drive gains.³

Fresh data out Tuesday initially quashed market momentum, reflecting investor concern that the stronger-than-expected Q3 economic growth might dissuade the Fed from adjusting interest rates in 2026.

But those fears appeared to subside after a Fed official said the U.S. is “way behind the curve in terms of lowering rates” compared with other central banks around the world. Those comments, combined with continued momentum and market leadership from the AI trade, boosted sentiment and lifted the S&P 500 to a record close despite a fresh consumer confidence reading that missed expectations.⁴

Christmas Eve brought more of the same, kicking off what’s known as the “Santa Claus rally” period—the last five trading days of the year and the first two trading days of the new year. The S&P hit new intraday and closing highs on Wednesday’s shortened trading day—its fifth consecutive session of gains.⁵

While stocks largely went sideways on Friday amid thin holiday volume. The S&P 500 hit another intraday high, and all three major averages posted weekly gains. It was the S&P’s fourth weekly gain in five weeks.⁶

GDP Jumps

The delayed Q3 gross domestic product report was released on Tuesday, showing that the economy grew at an annualized 4.3 percent rate. That number beat expectations by more than a full percentage point and marked the strongest economic growth in two years.⁷

While it didn’t garner many headlines, another metric released on the same day told a similar story. Industrial production grew 2.5 percent year over year in November—the highest annualized increase since September 2022 and nearly triple what it was at the start of 2025.⁸

Footnotes And Sources

1. <sup>WSJ.com, December 26, 2025
   2. Investing.com, December 26, 2025
   3. CNBC.com, December 22, 2025
   4. CNBC.com, December 23, 2025
   5. CNBC.com, December 24, 2025
   6. CNBC.com, December 26, 2025
   7. WSJ.com, December 23, 2025
   8. KPMG.com, December 23, 2025</sup>

Heightened volatility was on Wall Street’s mind last week, as investors continued to focus on valuations of artificial intelligence (AI) stocks.

The Standard & Poor’s 500 Index fell 1.95 percent, while the Nasdaq Composite Index declined 2.74 percent. The Dow Jones Industrial Average slid 1.91 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slumped 3.25 percent.^1,2

AI Valuation Worries 

Stocks slid over the first half of the week as anticipation continued to build for Q3 results from one of the largest AI megacap tech stocks, due out midweek.

While the decline was led by megacap tech stocks, which typically drag down both the Nasdaq and S&P 500, the Dow Industrials also fell. With the government still playing catch-up on a backlog of economic reports following the shutdown, investors kept a close eye on big consumer-related stocks for insights into the economy.³

Then midweek, all three major averages rebounded, with the S&P snapping a four-day losing streak. Sentiment improved as investors turned more positive about another AI firm’s quarterly report due out after Wednesday’s closing bell.⁴

That firm’s results helped boost stocks after the opening bell on Thursday, but prices retreated quickly as investor anxiety built over whether the Fed would adjust rates next month. The Fed’s October meeting minutes revealed divisions among the Committee’s voting members. Additionally, the Labor Department’s September jobs report painted a mixed employment picture, which might complicate the Fed’s decision.⁵

Stocks rebounded on Friday after New York Fed President John Williams seemed to reassure investors that a rate adjustment at the Fed’s December meeting was still a possibility. The bounce was jagged, as the rebound had to battle through disappointing economic data on consumer sentiment and manufacturing activity.⁶

More Jobs, but Higher Jobless Rate

The delayed September jobs report came out last week, and showed employers added 119,000 jobs—the strongest monthly gain since April and a rebound from August’s loss of 4,000 jobs (which was later revised to a 22,000 gain). The jobs report was among the first post-shutdown reports to be published by the Labor Department.

The unemployment rate in September rose to 4.4 percent, higher than the 4.3 percent economists expected. It was the highest number in four years.

This was the Labor Department’s last monthly employment report before the Federal Reserve’s next meeting on December 9-10.⁷

Footnotes and Sources

1. ^{WSJ.com, November 21, 2025}
2. ^{Investing.com, November 21, 2025}
3. ^{CNBC.com, November 18, 2025}
4. ^{CNBC.com, November 19, 2025}  
5. ^{WSJ.com, November 20, 2025}
6. ^{CNBC.com, November 21, 2025}
7. ^{WSJ.com, November 20, 2025}

Stocks ended mixed after a nail-biting week for investors, who grew anxious over megacap tech valuations and interest rates as the government shutdown came to an end.

The Standard & Poor’s 500 Index edged up 0.08 percent, while the Nasdaq Composite Index slipped 0.45 percent. The Dow Jones Industrial Average rose 0.34 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, advanced 1.63 percent.^1,2

Rotating into Value

The week began with stocks rising, fueled by hopes that the longest-ever government shutdown could soon end as a federal funding bill moved closer to Congressional approval. Building on these early gains, the Nasdaq advanced more than 2 percent and the S&P 500 added 1½ percent.³

Stocks rose at the opening bell on Tuesday following news that the Senate had passed a bill to end the shutdown, but sentiment quickly turned as tech stocks pulled down the Nasdaq and S&P. Meanwhile, the Dow rose modestly. However, by midday, sentiment shifted positively, and the Dow and S&P 500 closed in the green.⁴

Midweek, growing conviction that the government would reopen continued to push the Dow Industrials higher. As a result, the Dow achieved its first record close above 48,000, with the S&P remaining flat and the Nasdaq slipping. Once the government reopened Thursday morning, attention quickly turned to tech valuations and an earnings miss from a large entertainment conglomerate. This shift also prompted investors to worry whether the Fed would adjust interest rates next month. Despite a brief dip as the week concluded, markets stabilized, with the Nasdaq and S&P recovering near the flatline, while the Dow lagged slightly.^5,6,7

Restarting the Data Engine

It takes time to get a tanker ship up and running again after a full stop. That’s what the Bureau of Labor Statistics (BLS) is doing now, as the government stats engine resumes.

Using the last government shutdown (in 2013) as a baseline, about half of the BLS reports that have not yet been published could be ready by the Federal Reserve’s next meeting on December 9-10. The remainder of the backlogged reports (including October reports) are estimated to be published on a rolling basis through mid-January.⁸

Footnotes and Sources

1. ^{WSJ.com, November 14, 2025}
2. ^{Investing.com, November 14, 2025}
3. ^{CNBC.com, November 10, 2025}  
4. ^{CNBC.com, November 11, 2025} 
5. ^{CNBC.com, November 12, 2025}
6. ^{WSJ.com, November 13, 2025}
7. ^{CNBC.com, November 14, 2025}
8. ^{MarketWatch.com, November 11, 2025}

Stocks hit a rough patch last week as fresh labor market data, low consumer sentiment, and the ongoing government shutdown unnerved investors.

The Standard & Poor’s 500 Index declined 1.63 percent, while the Nasdaq Composite Index dropped 3.04 percent. The Dow Jones Industrial Average fell 1.21 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, edged down 0.83 percent.^1,2

Nasdaq’s Toughest Week Since April

Stocks started the week mixed. The S&P 500 and Nasdaq each rose modestly, while the Dow Industrials fell.^3,4

Markets stabilized midweek after an ADP jobs report showed stronger-than-expected hiring by private employers in October. The report buoyed investor sentiment, pushing all three major averages higher.⁵

However, stocks fell as investor concerns over stock valuations persisted, particularly among companies related to AI. Following a well-known outplacement firm’s report of a steep increase in corporate layoffs, selling pressure intensified as investors continued to react to data updates from alternative sources in the absence of official government data.

Stocks slid again on Friday after news that consumer sentiment hit its lowest level in three years. The survey data appeared to exacerbate investor nerves about the reading’s connection to a fragile labor market and the impacts of the government shutdown.

But all three major averages then began a recovery rally midday Friday, with the S&P and Dow Industrials climbing back into the green and the Nasdaq regaining nearly all of its losses by the closing bell.⁶

Labor Market Paradox

Payroll processing company ADP’s monthly employment report has become a prominent alternative source for jobs data in the wake of the government shutdown. However, it doesn’t always tell the whole story.

ADP’s latest jobs report showed private employers hired at a much stronger pace than expected in October. U.S. companies added 42,000 jobs in October, nearly double the 22,000 new jobs economists expected. Given that 29,000 jobs went away in September, the October figure was welcome news for investors; it was also the first increase in three months. The bulk of the job gains came from the trade, transportation, utilities, education, and health sectors.⁷

Other data out last week told a different story. Another report showed layoff announcements in October hit a 22-year high for the month, making this year the worst for layoffs since 2009.^8,9

Footnotes and Sources

1. ^{WSJ.com, November 7, 2025}
2. ^{Investing.com, November 7, 2025}
3. ^{CNBC.com, November 3, 2025}  
4. ^{CNBC.com, November 4, 2025} 
5. ^{WSJ.com, November 5, 2025}
6. ^{CNBC.com, November 7, 2025}
7. ^{WSJ.com, November 5, 2025}
8. ^{CNBC.com, November 6, 2025}
9. ^{CNBC.com, November 7, 2025}

Stocks rose last week as trade developments, positive Q3 corporate results, and momentum in megacap tech drove another rally, despite some cautious comments from the Fed.

The Standard & Poor’s 500 Index gained 0.71 percent, while the tech-heavy Nasdaq Composite Index picked up 2.24 percent. The Dow Jones Industrial Average rose 0.75 percent. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, fell 0.55 percent.^1,2

Stocks Up for Third Straight Week

Stocks rose over the first half of the week on news that Chinese and U.S. officials were working on a trade deal. Meanwhile, a rise in AI-related tech names lifted the broader market ahead of the Federal Open Market Committee (FOMC) meeting. All three major averages notched record closing highs for the first two days of the week, including the S&P 500 closing above 6800 for the first time.^3,4

Stocks continued their rise Wednesday morning as the AI trade continued to fuel momentum. But markets wobbled following the FOMC’s decision to cut interest rates by a quarter percentage point. Chair Powell’s comments that the Fed may not adjust rates in December cut short the market’s rally.^5,6

Stocks bounced out of the gate on Friday, with the Nasdaq leading gains for all three major averages as several megacap tech companies rallied on upbeat Q3 results and other corporate news.⁷

‘Not a Foregone Conclusion’

As widely expected, the Federal Reserve cut short-term interest rates by 0.25 percent. But as often happens for those trying to read the Fed tea leaves, it was the finer messaging points that moved the markets.

Fed Chair Jerome Powell said in his post-meeting press conference that another rate adjustment in December was “not a foregone conclusion.” He added that Fed policy is “not on a pre-set course.” Part of that, he said, was due to the ongoing government shutdown and the resulting dearth of economic data—and the challenge in setting monetary policy without ongoing reports.⁸

Footnotes and Sources

1. ^{WSJ.com, October 31, 2025}
2. ^{Investing.com, October 31, 2025}
3. ^{CNBC.com, October 27, 2025}
4. ^{CNBC.com, October 28, 2025}
5. ^{WSJ.com, October 29, 2025}
6. ^{CNBC.com, October 30, 2025}
7. ^{CNBC.com, October 31, 2025}
8. ^{WSJ.com, October 29, 2025}

Stocks rose last week thanks to a full slate of upbeat third-quarter corporate results and mild inflation data, which helped soften concerns over trade tensions with China.

The Standard & Poor’s 500 Index gained 1.92 percent, while the Nasdaq Composite Index rose 2.31 percent. The Dow Jones Industrial Average advanced 2.20 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.24 percent.^1,2

S&P, Dow Set New Highs on Friday

Stocks rose out of the gate as optimism returned to markets. Strength in the tech sector—and whispers of an imminent end to the government shutdown—pushed all three market averages higher.³

But the strong start turned mixed as some pressure on megacap tech stocks pulled down the Nasdaq. But while tech stocks regrouped, attention shifted to the Dow Industrials, which hit a record intraday high of 47,000 and a record close.⁴

Sentiment soured midweek as weaker-than-expected earnings results from two megacap tech companies dragged down technology names. Markets came under further pressure following news that the administration was considering restrictions on U.S.-made software exported to China. The S&P, Dow, and Nasdaq all closed lower on Wednesday.⁵

But the mood brightened Thursday as more megacap tech companies announced strong Q3 results, and as the White House confirmed a scheduled meeting with China.

News on Friday that inflation rose more slowly than expected boosted all three averages. The S&P 500 and Dow Industrials hit all-time intraday and closing highs.⁶

Inflation Eases

The Consumer Price Index report, delayed due to the government shutdown, showed prices rose by 3.0 percent in September on an annualized basis, slightly cooler than the 3.1 percent forecast.

This news paved the way for the Fed to stick with its penciled-in rate cut at its two-day meeting, which ends on October 29.

In addition to the upbeat inflation news, Q3 corporate earnings–one of the key drivers of stock prices–have been beating expectations 80% of the time as of Friday.⁷

Footnotes and Sources

1. ^{WSJ.com, October 24, 2025}
2. ^{Investing.com, October 24, 2025}
3. ^{CNBC.com, October 20, 2025}
4. ^{CNBC.com, October 21, 2025} 
5. ^{CNBC.com, October 22, 2025}
6. ^{WSJ.com, October 24, 2025}
7. ^{WSJ.com, October 24, 2025}

Stocks pushed higher last week, buoyed by strong third-quarter results posted by several money center banks.

The Standard & Poor’s 500 Index gained 1.70 percent, while the Nasdaq Composite Index rose 2.14 percent. The Dow Jones Industrial Average advanced 1.56 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 0.74 percent.^1,2

A Bumpy Week

Stocks rose to start the week after the White House shifted tone over the weekend on trade relations with China. Gains were broad-based—4 out of 5 stocks in the S&P 500 rose—with the index posting its best day since May 27.³

Overnight, the specter of a revived trade war with China reemerged after the country placed sanctions on U.S. subsidiaries of South Korean shipbuilders in an apparent effort to increase its control over global shipping. Stocks opened sharply lower the next morning, and then quickly staged an impressive rebound—helped by mostly positive quarterly earnings results from a handful of big money center banks.⁴

Stocks rose again midweek as better-than-expected Q3 corporate results from the biggest banks continued to roll in, overpowering negative sentiment around lingering trade concerns. As the week wrapped, bank stocks and all three broad market averages pushed through jitters to end in the green.^5,6,7

Bank Stock Paradox

While trade tensions with China dominated the attention during the week, some bank news also captured investor interest.

Last week, several money center banks reported expectation-beating Q3 results, underscoring the narrative of a healthy economy and robust consumer spending.

But there was a flip side to the banking sector: a smaller regional bank reported a $50 million credit loss from two commercial loans. The loss also hit larger banks with a stake in the loss. The news rattled the markets. For investors, it evoked memories of two regional bank failures in 2023, raised questions about whether this was a broader systemic issue, and put pressure on bank stocks, both big and small.⁸

Footnotes and Sources

1. ^{WSJ.com, October 17, 2025}
2. ^{Investing.com, October 17, 2025}
3. ^{CNBC.com, October 13, 2025}
4. ^{CNBC.com, October 14, 2025}
5. ^{WSJ.com, October 15, 2025}
6. ^{CNBC.com, October 16, 2025}
7. ^{CNBC.com, October 17, 2025}
8. ^{WSJ.com, October 17, 2025}

Stocks fell last week amid concerns about trade with China, following an unsteady rally to record highs over the first half of the week.

The Standard & Poor’s 500 Index fell 2.43 percent, while the Nasdaq Composite Index declined 2.53 percent. The Dow Jones Industrial Average slid 2.73 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 1.64 percent.^1,2

Stocks Set Highs Before Friday’s Drop

Stocks began the week mostly positive. However, Monday marked Day 6 of the government shutdown, and two of the three major averages powered through any bearish sentiment. The S&P 500 and the Nasdaq each advanced to record closes on fresh enthusiasm for mergers & acquisitions activity after the announcement of two deals. By contrast, the Dow fell slightly.^3,4

Stocks pushed higher midweek as investors looked past the Fed meeting minutes from September, which revealed somewhat divided opinions on interest rates. The S&P and Nasdaq both closed at record highs.⁴

On Friday, sentiment turned negative a little over an hour into the trading session after the White House announced a tariff increase on imported goods from China. The decline, led by chip manufacturers, erased the week’s gains. It was the largest single-day decline for stocks since April.^5,6,7

China In Focus

Meanwhile, focus turned to new export controls that China imposed on so-called rare earth metals—key ingredients for AI-powered microchips and vital resources for the defense industry. Investor concern centered mostly around AI chip companies, which have exposure to China both as customers and in terms of manufacturing.⁸

The White House threatened to cancel its upcoming meeting with the Chinese president over the dispute. China controls approximately 70 percent of the global supply of rare earth metals, meaning a policy change can impact markets.⁸

Separately, the government shutdown entered its second week. Shutdowns typically don’t heavily impact markets, but the uncertainty continues to hang over trading.⁹

Footnotes and Sources

1. ^{WSJ.com, October 10, 2025}
2. ^{Investing.com, October 10, 2025}
3. ^{CNBC.com, October 6, 2025}
4. ^{CNBC.com, October 8, 2025}
5. ^{CNBC.com, October 9, 2025}
6. ^{WSJ.com, October 10, 2025}
7. ^{WSJ.com, October 10, 2025}
8. ^{WSJ.com, October 10, 2025}
9. ^{WSJ.com, October 9, 2025}

Stocks rose last week, looking past the government shutdown and apparently discounting any impact it may have on the economy.

The Standard & Poor’s 500 Index moved up 1.08 percent, while the Nasdaq Composite Index rose 1.32 percent. The Dow Jones Industrial Average advanced 1.10 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 2.53 percent.^1,2

Shutdown Talk

The S&P and Nasdaq rose out of the gate Monday morning despite the threat of a possible government shutdown hanging over investor sentiment.³

As the midnight deadline approached for Congress to pass a continuing resolution that would temporarily fund the federal government, the prospect of a shutdown dominated market sentiment. The White House discussed permanent layoffs of some federal workers, stoking fears of further slowing an already sluggish labor market.⁴

Stocks initially fell on news of the shutdown but recovered by midday, driven by growing investor expectations that the shutdown would be short-lived. The S&P closed above 6700 for the first time.⁵

Momentum tempered after Treasury Secretary Scott Bessent suggested gross domestic product (GDP) may take a hit due to the shutdown, but all three averages recovered and closed at record highs.⁶

Stocks were mixed on Friday after the Senate failed to pass dueling funding bills that would have prevented the shutdown from entering its second week.⁷

Jobs Report Delayed

Investors have looked past—but continue to be jittery about—the government shutdown and its potential impact on an otherwise resilient economy, which is experiencing a hiring slowdown.

One of the first impacts felt from the shutdown was the Bureau of Labor Statistics’ monthly employment report, scheduled for release on Friday, but delayed until the government reopens for business. However, ADP’s monthly report, released on Wednesday, showed that corporate employers shed 32,000 jobs in September, below the forecast of 45,000 new jobs.⁸

Footnotes and Sources

1. ^{WSJ.com, October 3, 2025}
2. ^{Investing.com, October 3, 2025}
3. ^{CNBC.com, September 29, 2025}
4. ^{CNBC.com, September 30, 2025}
5. ^{WSJ.com, October 1, 2025}
6. ^{CNBC.com, October 2, 2025}
7. ^{CNBC.com, October 3, 2025}
8. ^{WSJ.com, October 1, 2025}