WEEKLY MARKET RECAP – DECEMBER 26, 2025

The S&P 500 reached a new record high on Tuesday, followed by the Dow on Wednesday, as both indexes surpassed peaks set less than two weeks earlier. All three major U.S. indexes finished the holiday-shortened week with gains of more than 1%, including the NASDAQ.

A long-delayed government estimate showed that U.S. economic growth in the third quarter was far stronger than expected. Gross domestic product expanded at a 4.3% annualized rate from July through September, well above economists’ consensus forecast of 3.2%. The reading followed growth of 3.8% in the second quarter and a 0.6% contraction in the first.

Precious metals extended their rallies, with silver climbing above $77 per ounce for the first time and gold and platinum also reaching record highs. Based on Friday afternoon prices, silver was up roughly 155% year to date, while gold had gained about 70%.

Market volatility continued to ease. The Cboe Volatility Index fell to 13.6 on Wednesday, its lowest closing level in more than a year, down from a recent high of 26.4 on November 20. The index’s year-to-date peak occurred in early April, when tariff uncertainty pushed it above 50.

Oil prices posted a modest rebound during the week but remained on track for their steepest annual decline since 2020. U.S. crude traded near $57 per barrel on Friday, well below its year-end 2024 level of around $72. In 2020, oil prices fell 21%.

After three rate cuts in 2025, bond market pricing continued to favor additional easing next year. As of Friday’s close, futures markets implied a 74% probability that the Federal Reserve will deliver at least two quarter-point cuts in 2026, according to CME FedWatch. The odds of just one cut stood at 21%, with a 5% chance of no cuts.

While U.S. equities were on pace for a solid gain in 2025, domestic stocks lagged international markets. At Friday’s close, the S&P 500 had returned more than 19% for the year, compared with gains of nearly 32% for developed markets outside the U.S. and 34% for emerging markets.

Looking ahead, earnings growth expectations remain strong. FactSet reported that analysts project S&P 500 companies to deliver average earnings growth of 15.0% in 2026, marking a third consecutive year of double-digit gains. All 11 sectors are expected to post increases, led by information technology, while real estate is forecast to grow at the slowest pace.