Market Data as of Week Ending: 12/12/2025 unless noted otherwise
Major stock indices briefly reached all-time highs last week following the Federal Reserve meeting on Wednesday before retreating on Friday. The S&P 500 finished the week lower but outperformed the tech-heavy NASDAQ, which was pressured by renewed concerns around AI spending. Mid and small-cap stocks maintained midweek gains and finished the week higher. Value stocks outperformed growth, narrowing the year-to-date performance gap. Cyclical sectors underperformed for the week, led lower by losses in information technology and communication services. Enterprise software company Oracle reignited AI spending concerns after reporting lower-than-expected quarterly revenue and higher forecasted capital expenditure spending. Foreign stocks continued to advance, with both developed and emerging markets trading higher.
Bonds also traded lower last week as declines in short-term Treasury yields were offset by higher long-term yields. The 2-Year Treasury yield fell to 3.52% while the 10-Year edged higher to 4.19%, widening the 2-10yr slope to 0.67%. Short and intermediate-term bonds were relatively unchanged across sectors, while longerduration bonds added to December’s losses. Government bonds narrowly outperformed high-yield and corporate bonds, where spreads remain historically tight. Investment-grade corporate yields and high-yield bond yields finished the week higher at 4.88% and 7.14%, respectively.
Economic data for the week was largely focused on interpreting policy signals from the Federal Reserve. On Wednesday, the Federal Open Market Committee decided to lower the federal funds rate by 0.25% to a target range of 3.5% to 3.75%. While the rate cut was widely expected, three dissenting votes highlighted uncertainty around the future path of monetary policy. Fed Chairman Jerome Powell acknowledged that downside risks to employment have increased, while upside risks to inflation persist, although inflationary impacts from tariffs are believed to be transitory. Outside of the Fed meeting, economic data was relatively light. Job Openings and Labor Turnover Survey (JOLTS) data for September and October showed total job openings largely unchanged at 7.67M. Separations declined in October, while the quits rate fell to 1.8%, a signal of softening worker confidence. Initial jobless claims for the prior week rose more than expected to 236K, while continuing claims declined more than forecasted.