WEEKLY MARKET RECAP – DECEMBER 5, 2025

Major U.S. stock indexes eked out modest weekly gains, leaving the S&P 500 and Dow within about one percentage point of their record highs set in late October and mid-November, respectively. The NASDAQ also moved closer to its peak, ending the week less than 2% below its all-time high.

With official employment data still delayed after the government shutdown, a private payroll report added to evidence that labor conditions are softening. ADP estimated that private employers cut 32,000 jobs in November, reversing October’s gain of 47,000. The government’s November jobs report is scheduled for December 16, more than two weeks later than usual.

In rates markets, pricing continued to favor a quarter-point cut at the Federal Reserve meeting that concludes Wednesday, December 10. By Friday’s close, fed funds futures implied an 87% chance of a cut and a 13% probability of no change, according to CME FedWatch.

Inflation data also provided some support for easing expectations. The Fed’s preferred measure, the Personal Consumption Expenditures Index, showed core inflation running at a 2.8% annual rate in September, slightly cooler than August’s 2.9%, though still above the Fed’s 2.0% long-term objective.

Treasuries sold off in the intermediate and long end of the curve, driving yields higher. The 10-year Treasury yield ended the week at 4.14%, up from 4.02% the prior week, while the 30-year yield rose to 4.79%, its highest level in three months.

Consumer sentiment improved modestly. The University of Michigan’s preliminary December reading rose to 53.3 from November’s final 51.0, a small rebound after several months of declines tied to weakening job growth.

Corporate earnings remained a bright spot. FactSet reported that S&P 500 companies delivered average year-over-year earnings growth of 13.4% for the third quarter, the fourth straight quarter of double-digit gains. Information technology led all sectors with a 29.0% increase.

Even after recent volatility in mega-cap tech, tech-oriented groups continued to outperform heading into the final weeks of 2025. As of Friday’s close, communication services led all sectors with a 36% gain for the year, followed by information technology up 26%.