Daily market snapshot

Monday, 12/15/2025 p.m.

• Stocks stumble – Following a bright start, we saw major equity indexes sell off over the course of Monday, adding to the declines seen at the end of last week*. In the large-cap space, weakness was concentrated in some large technology names, with further declines in Oracle and Broadcom adding to those seen after last week's third-quarter earnings reports*. These dynamics weighed on the technology-sensitive Nasdaq index, which fell 0.6% over the day and is now down 2.2% over December so far*. Small-cap stocks, which have generally outperformed in recent weeks, also struggled, with the Russell 2000 index down 0.7%*. Still, this benchmark remains up 1.3% month-to-date, benefiting from a rotation away from large-cap technology stocks*. Shorter-dated government bonds rallied, with the yield on the 2-year U.S. Treasury note down 2 basis points (0.02%), although 10-year yields were flat and remain close to the middle of the 4%-4.5% range seen through much of 2025*. Gold was a touch higher, with prices approaching the record highs seen in October, while oil continues to drift lower, with WTI trading at $57 per barrel, a 2025 low*.
   
• More data at last – This week will bring some long-awaited economic data after a record-breaking government shutdown of the major statistics agencies. The BLS will release the delayed October and November nonfarm payrolls report and October retail-sales data tomorrow, and the November CPI report on Wednesday (October inflation data will not be released). We need to treat these reports with a touch of caution, in our view, with the quality of these data likely lower than normal due to missed data collection and sampling. Still, following a prolonged data blackout, we think these indicators should help provide some sense of how the economy has been faring in recent months. Economists expect the labor data to show sluggish hiring trends, with the consensus looking for a 50,000 gain in November payrolls, but critically few signs of distress*.
   
• Dollar drifting lower toward the end of the year – The U.S. dollar has had a difficult year. Following a prolonged bull run which pushed the currency to multi-decade highs, we have seen a correction in the greenback*. This has pushed the dollar down 9.4% against a trade-weighted basket of international currencies, and the dollar has been drifting lower through December*. We think that part of the U.S. dollar success story in recent years has related to a perceived U.S. exceptionalism, with higher growth, interest rates and equity returns compared to other parts of the world all helping create demand for dollar-denominated assets. Aspects of this story appear to have moderated in 2025, with U.S. growth slowing, the Fed cutting interest rates, and some international markets delivering robust returns. In part, we think the performance of the dollar in 2026 will depend on how many more interest-rate cuts we might see from the Fed. We think there is scope for one or two more moves, broadly in line with market pricing*, but a more aggressive easing could add to dollar downside, in our view. 
   

James McCann;
Investment Strategy

^{Sources: *Bloomberg}

Friday, 12/12/2025 p.m.

• Stocks drop amid tech weakness - Major indexes retreated from record highs as the pullback in mega-cap tech stocks weighed on the Nasdaq, which finished 1.7% lower*. Broadcom reported earnings that beat expectations, but shares fell 11% on profitability concerns and questions around AI-related growth after a 70% rally earlier this year*. A key theme as markets close out the year is a rotation out of tech and into sectors that could benefit from steady economic growth and anticipated Fed easing*. Consistent with the day’s risk-off tone, traditionally defensive sectors such as consumer staples and health care outperformed. Bonds also declined as the 10-year Treasury yield rose to 4.19%*.
   
• Fed's balanced message lands well with investors - The Fed’s two-day meeting earlier this week was the last major market catalyst before year-end, and the outcome largely met expectations. The Fed cut its benchmark rate by a quarter point to 3.5%–3.75%, marking its third straight reduction*. While officials differ on the longer-term path, they maintained projections for one cut in 2026 and another in 2027*. Solid growth and inflation still above target suggest a possible pause in January, in our view, but the easing cycle likely isn’t over. Based on comments from his press conference, Chair Powell’s optimism on productivity and tariff-driven goods inflation appeared to reinforce that view. The Fed also announced it will buy $40 billion in short-term Treasuries over the next 30 days to replace maturing bills and keep its balance sheet steady. Next week, attention likely shifts to delayed CPI and jobs reports for October and November, though in his comments Powell warned of quality issues due to data-collection distortions.
   
• Sector rotation underscores case for diversification in '26 - The Magnificent 7 group of mega-cap companies slipped this week after shares of both Oracle and Broadcom declined post-earnings*. Broadcom's results that were released last night exceeded expectations, but the company's CEO held off on giving an annual revenue forecast, which fed to the recent skepticism around lofty AI targets*. While tech takes a breather, investors appear to be rotating into areas with lower valuations and support from Fed easing, like small-caps and cyclicals. Both the equal-weight S&P 500 and Russell 2000 hit new highs before today's pullback, even as the tech-heavy Nasdaq remained below its late-October peak*. Looking ahead, AI should remain a major driver in 2026, in our view, but markets look to be broadening—within tech and beyond—with solid earnings across sectors and regions*. This can create opportunities for diversification, which we believe is key to building portfolio resilience.

Angelo Kourkafas, CFA;
Investment Strategy

^{Sources: *FactSet} 

Thursday, 12/11/2025 p.m.

• Markets finish higher following Fed rate cut – Equity markets closed higher on Thursday, led by gains in materials and financial stocks that reversed an early pullback. Communication and technology stocks lagged as cloud-computing leader Oracle fell sharply after reporting disappointing second-quarter revenue and continued heavy capital expenditures*. Overseas, Asia dipped overnight, while European stocks traded broadly higher as Switzerland's central bank held its policy rate steady at 0%, in line with estimates*. The U.S. dollar weakened against major currencies. In commodities, WTI oil declined as markets weighed the implications of the U.S. seizure of a sanctioned oil tanker off the coast of Venezuela*.
   
• Jobless claims mixed – Initial jobless claims rose to 236,000 this past week, above estimates of 213,000 and marking the highest reading in three months*. Continuing claims, which track the total number of people receiving benefits, fell to 1.84 million from 1.94 million, coming in below forecasts to hold roughly steady*. We believe this data confirms that the labor market continues to cool but is not collapsing. The unemployment rate remains modest at 4.4%, while job openings expanded in October to 7.7 million, slightly above unemployment of 7.6 million*. In our view, wage gains should continue to outpace inflation, providing positive real wages to sustain consumer spending and the broader economy.
   
• Bond yields edge higher – Bond yields ticked up, with the 10-year Treasury yield at 4.15%. Following yesterday's Fed rate cut, bond markets are pricing in expectations for two additional cuts to the fed funds rate next year** — exceeding the Fed's own forecast for one cut***. Lower interest rates should reduce borrowing costs for consumers and businesses, which we believe will support the economy and corporate profitability.
   

Brian Therien, CFA;
Investment Strategy

^{Sources: *FactSet **CME FedWatch ***U.S. Federal Reserve}

Wednesday, 12/10/2025 p.m.

• Markets rally to new record highs after Fed meeting – U.S. equity markets delivered strong gains this afternoon after the Fed cut interest rates, as widely expected, and provided less hawkish signals than the market had seemingly feared around the path for future policy*. The S&P 500 index was up 0.8%, but the biggest gains were seen in small-cap equity markets, with the interest-rate-sensitive Russell 2000 index up close to 2% over the day*. We also saw a rally in government bond markets after the meeting, bringing the yield on the 10-year U.S. Treasury note down 4 basis points (0.04%) to 4.14% over the session*. Against this backdrop the dollar struggled, falling close to 0.5% against a trade-weighted basket of international currencies*. Conversely, lower interest rates helped push gold prices nearly 1% higher over the day*.  
   
• A divided Fed – As anticipated, the decision to cut rates today was contested, with two FOMC members (Schmid and Goolsbee) voting in favor of unchanged interest rates, while Miran continued to make the case for even deeper rate cuts*. This is the first time we have seen three dissents against an FOMC decision since 2019, underlining the divisions on the Fed's rate-setting committee around the path for policy*. Subtle changes to the language of the Fed's press statement that accompanied the decision today hinted that the central bank is preparing to take a pause from easing at its January meeting, following three consecutive interest-rate cuts*. Chair Jerome Powell seemed to amplify the signal that the central bank would be on hold, in the short term at least, at his press conference, but hinted that the Fed was likely to ease further by arguing it was unlikely the central bank's next step would be an interest-rate hike*.
   
• Ambiguity over 2026 – The updated "dot plot," which contains FOMC members' forecasts for interest rates in coming years, showed wide differences in views across the committee*. The median member is forecasting just one interest-rate cut next year and one further cut in 2027, but this hides a broad dispersion of views*. This caution would be consistent with the continued concerns over inflation at the central bank, with most measures remaining around 3%, above the central bank's 2% target*. Today's closely followed Employment Cost Index report showed a welcome deceleration in wages over the third quarter, indicating some further cooling in domestic price pressures*. However, uncertainty over tariff-driven inflation appears to remain high, and, in our view, the FOMC will likely be watching carefully to see the extent to which firms are passing these costs on to consumers via higher prices in 2026. We think the Fed will cut once or twice more next year, leaving interest rates in the 3%-3.5% range.
   

James McCann;
Investment Strategy

^{Source: *Bloomberg}

Tuesday, 12/9/2025 p.m.

• Stocks little changed ahead of Fed meeting – U.S. equity markets closed near the flatline on Tuesday as investors await the conclusion of the final FOMC meeting of the year tomorrow. Market expectations call for the Fed to deliver a 0.25% interest-rate cut at tomorrow’s meeting*, with much of investors’ attention likely focused on updated Fed economic projections and commentary regarding the appropriate path of monetary policy over the coming year. On the economic front, the NFIB Small Business Index edged higher in November to 99, slightly above expectations for a reading of 98.3.* Additionally, job openings for October were higher than expected, holding steady near 7.7 million and signaling steady labor demand, in our view.* Bond yields closed slightly higher, with the 10-year Treasury yield finishing around 4.18%.*
   
• Small-business optimism improves in November – The NFIB Small Business Index rose to 99 in November, a modest improvement from the prior month and slightly above the 30-year average of 98.* Encouragingly, the percentage of small businesses planning to increase employment climbed to 19% for the month—a four-point increase from October and the highest level since December 2024.* This strong employment reading points to underlying stability in the labor market, in our view, and contrasts with the ADP employment report for November, which showed small businesses shedding over 100,000 jobs.* Additionally, the percentage of small businesses expecting inflation-adjusted sales to rise over the next three months increased to 15%, the highest since January.* We expect labor-market conditions to remain stable despite slowing job growth, which should help support healthy economic activity over the coming year, with real GDP growth settling around 2% in 2026, in our view.*
   
• Dollar weakness has bolstered international stocks in 2025 – The DXY U.S. Dollar Index has come under pressure in 2025 and is on pace to decline by nearly 9% for the year—its worst performance since 2017.* Political and fiscal uncertainty, combined with a narrowing yield advantage versus other developed markets, has contributed to the dollar’s decline, in our view. For investors, the weaker U.S. dollar has boosted international returns, with the MSCI AC World ex U.S. Index up more than 30% in U.S. dollar terms but only 23% in local currency terms.* We expect currency to play a less significant role in international returns over the coming year. However, we do see potential for a flat to weaker dollar, particularly as the European Central Bank appears to be at the end of its easing cycle while the Bank of Japan is expected to continue raising rates*. This could further erode the U.S. yield advantage and put downward pressure on the dollar, in our view, helping to reinforce the case for maintaining a globally diversified portfolio.*

Brock Weimer, CFA;
Investment Strategy

^{Source: *FactSet}