Daily market snapshot

Thursday, 12/18/2025 p.m.

• Markets close higher on cool inflation report – Equity markets finished higher on Thursday following the CPI report showing that headline inflation eased to 2.7% through November, below estimates to hold steady at 3.0%. Consumer discretionary and communication stocks led gains, while the energy sector lagged. Bond yields dipped, with the 10-year Treasury yield at 4.12%. Internationally, Europe traded broadly higher after the European Central Bank held its policy rate at 2.0% and the Bank of England cut rates to 3.75%, from 4.0%, both in line with expectations*. The U.S. dollar strengthened against major currencies. In commodities, WTI oil traded higher, as markets weigh a potential U.S. blockade of sanctioned Venezuelan oil tankers*.
   
• CPI inflation cooler than expected – Consumer price index (CPI) inflation slowed to 2.7% annualized in November, below forecasts to hold steady at 3.0%*. Core CPI, excluding more-volatile food and energy prices, dipped further to 2.6% year-over-year, compared with estimates to remain unchanged at 3.0%. Shelter inflation eased to 3.0%, down from 3.6% through September, providing a key driver of the moderation*. While these readings are based on surveys missing some key data because of the government shutdown, if confirmed by other data, they suggest inflation is starting to cool. This should keep the Fed on track for more rate cuts in 2026, though likely pausing early in the year to assess further signs of easing price pressures. Bond markets are pricing in expectations for two additional Fed rate cuts next year**.
   
• Jobless claims mixed – Initial jobless claims fell to 224,000 this past week, above estimates calling for a sharper drop to 200,000*. Continuing claims, which measure the total number of people receiving benefits, edged higher to 1.9 million, below forecasts for 1.95 million*. We believe this signals the labor market continues to soften but is not collapsing. While the unemployment rate has risen in recent months to 4.6%, job openings expanded in October to 7.7 million, slightly below unemployment of 7.8 million*. In our view, wage gains should continue to outpace inflation, providing positive real wages to support consumer spending and the broader economy. 

Brian Therien, CFA;
Investment Strategy

^{Sources: *FactSet **CME FedWatch}

Wednesday, 12/17/2025 p.m.

• Stocks fall amid tech weakness – U.S. equity markets closed lower on Wednesday, with weakness in mega-cap technology weighing on markets.* The pullback in tech was sparked by reports that one of Oracle's data center projects could potentially be in jeopardy after the company’s financing agreement fell through, driving a 1.8% loss for the NASDAQ.* The energy sector was an outperformer, rising by around 2% and supported by a jump in oil prices following President Trump’s announcement of a blockade of Venezuelan-sanctioned oil tankers.* It was a quiet day on the economic calendar, but key data is on the horizon as investors await tomorrow’s CPI inflation report for November. Overseas, Asian markets moved higher overnight after better-than-expected export data from Japan, while European markets finished mixed following cooler-than-expected November inflation in the U.K.* Bond yields were little changed, with the 10-year Treasury yield closing around 4.15%.*
   
• Broadening earnings growth expected in 2026 – 2025 has been another strong year for equity markets, with the S&P 500 on pace to notch its third consecutive annual gain of more than 15% including dividends.* From a leadership perspective, it’s been familiar faces at the top, as the technology and communication services sectors have led the way, each up over 20% in 2025.* Unsurprisingly, these two sectors have also posted the strongest earnings growth this year, with profits on track to rise more than 15% in both sectors.* Looking ahead to 2026, earnings growth is expected to remain robust in technology and communication services, with both sectors projected to deliver another year of double-digit profit gains.* Importantly, all eleven sectors of the S&P 500 are expected to see positive earnings growth in 2026, with value-oriented sectors such as industrials and materials forecasted to grow earnings by more than 14%.* In our view, this could lead to a broadening of market leadership beyond mega-cap tech, reinforcing the case for diversification. As part of our opportunistic equity sector guidance, we recommend overweight positions in consumer discretionary, industrials, and health care, offset by underweights in utilities and consumer staples, while maintaining neutral exposure to all other sectors. To read more about our views for the year ahead, check out our 2026 outlook.  
   
• Bonds on pace for another year of positive returns – After posting a 13% decline in 2022—the worst year on record for the Bloomberg U.S. Aggregate Bond Index—U.S. investment-grade bonds are on pace for a third consecutive year of positive returns, up roughly 7% year to date, aided by a decline in yields over the course of 2025.* Credit-sensitive segments of fixed income have also delivered strong performance, with U.S. high-yield bonds gaining 8% in 2025 and emerging-market debt rising nearly 11%.* Based on our outlook for steady economic and corporate profit growth, we believe equity markets offer more attractive opportunities relative to fixed income as part of our opportunistic asset allocation guidance. However, bonds continue to play a valuable role in a portfolio by providing diversification benefits and generating income, in our view. 

Brock Weimer, CFA;
Investment Strategy

^{Sources: *FactSet}

Tuesday, 12/16/2025 p.m.

• Stocks finish mixed on Tuesday – U.S. equity markets finished mixed on Tuesday, as investors digested the latest employment data, which showed nonfarm payrolls increased 64,000 in November while the unemployment rate rose to 4.6%.* Growth-oriented sectors such as technology and consumer discretionary outperformed, leading to a modest gain for the Nasdaq on the day, while value-oriented sectors such as health care and energy were among the laggards, each falling by more than 1% and weighing on the Dow.* Overseas, stocks in Asia were lower overnight, while European markets closed lower as well despite economic sentiment in Germany rising to a five-month high.* Bond yields finished slightly lower, with the 10-year Treasury yield falling to around 4.15%.* In commodity markets, oil prices fell over 2% amid hopes for a Russia-Ukraine peace deal.*
   
• Mixed data in the rearview mirror – Today brought a wave of economic data which had been delayed due to the government shutdown. On the consumer side, headline retail sales were little changed in October, as expected.* However, control-group retail sales—which exclude more volatile categories such as gas stations, motor vehicle and parts dealers, and building materials and garden equipment stores—rose a solid 0.85%, beating expectations for a 0.35% gain.* On the employment front, nonfarm payrolls increased by 64,000 in November, above the 50,000 forecast, though the unemployment rate climbed to 4.6%, the highest since October 2021.* The rise in unemployment largely reflects an expanding labor force rather than falling employment,* suggesting new entrants may be struggling to secure jobs, in our view. In 2026, we expect the labor market to remain in the slow lane, with payroll growth averaging 50,000–100,000 per month. Even so, economic conditions should stay broadly supportive, in our view, aided by monetary and fiscal easing, strong tech and AI investment trends, and a year with potentially less political uncertainty. Under this backdrop we see real GDP settling near 2% in 2026. To read more about our outlook for the year ahead, check out our 2026 outlook.  
   
• Inflation data on the horizon – Inflation will be in focus this week, with November consumer price index (CPI) data due Thursday. Expectations call for headline and core CPI to rise 3.1% year-over-year, following September’s 3% annual gain.* The October CPI report will not be released due to the government shutdown. In 2026, we expect inflation to remain in the 2.5%–3% range, as rising goods prices are likely partially offset by gradually moderating services inflation, which makes up the bulk of the CPI basket. While inflation is likely to stay above the Fed’s 2% target, we believe the Fed can deliver one or two additional rate cuts in 2026 as labor-market conditions cool. In our view, the combination of further monetary easing and modest fiscal support should underpin steady economic growth in 2026.

Brock Weimer, CFA;
Investment Strategy

^{Sources: *FactSet}

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}