A look back
- U.S. equities continued higher as small caps led for the second straight week. The S&P 500, advancing just 0.4%, finished the week 0.5% from its all-time high reached at the end of October.
- U.S. Treasury yields rose sharply at medium- to long-term maturities, while shorter maturity yields fell as markets priced in a Federal Reserve (Fed) rate cut next week. The 10-year climbed 0.12% to 4.14%.
- The September reading of the Fed’s preferred inflation gauge, Core Personal Consumption Expenditures (PCE), showed modest improvement, ticking lower to 2.8% from 2.9%. The preliminary December U. of Michigan Consumer Sentiment Survey signaled a modest rebound from cycle lows.
A look ahead
- It’s been a waiting game in recent weeks as markets have been repricing the probability of a rate cut at this week’s rate setting meeting. All eyes will be on the Federal Open Market Committee’s (FOMC) interest rate decision Wednesday afternoon, followed by Chair Powell’s press conference.
- Few other notable economic releases are scheduled for the week ahead, but many investors will be paying close attention to a handful of tech and consumer heavyweights reporting earnings.
- Economic releases: Nov. Small Business Optimism, Oct. JOLTS Job Openings, 3Q25 Labor Productivity, FOMC Summary of Economic Projections.
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