Market Data as of Week Ending: 12/26/2025 unless noted otherwise.
Equities advanced last week with major indices reaching record highs during the holiday-shortened trading period. Strong GDP data and improving AI-related sentiment supported markets despite low trading volumes. Large-cap stocks extended their year-to-date outperformance versus mid and small-caps, while growth modestly outpaced value. Market breadth improved as all 11 S&P 500 sectors finished higher, led narrowly by cyclicals. Precious metals continued to rally, with gold ending the week above $4,500 per ounce. International equities also moved higher, with both developed and emerging markets posting gains.
Bonds traded higher as Treasury yields ended the week modestly lower within a range-bound environment. The 2-Year Treasury yield declined to 3.46% while the 10-Year fell to 4.14%, leaving the 2-10yr slope unchanged at 0.68%. Long-duration bonds slightly outperformed short-duration bonds, while corporate bonds outpaced both government and high-yield debt. Credit spreads were little changed and remain historically tight. Investment-grade and high-yield corporate yields continued to drift lower, ending the week at 4.81% and 7.10%, respectively.
Economic data releases were limited during the holiday week, but investor focus centered on Q3 GDP, which expanded at its fastest pace in two years. The initial estimate showed 4.3% growth, well above expectations of 3.3%. Growth was driven by resilient consumer demand and a favorable trade balance supported by higher exports. Other economic indicators were mixed. Industrial production rose 0.2% in November, while capacity utilization was largely unchanged at 76%. Durable goods orders declined 2.2% in October but showed modest growth when excluding volatile components. The Conference Board reported that the Consumer Confidence Index fell 3.8 points in December to 89.1, driven by a 9.5 point decline in the Present Situation Index as consumers grew more pessimistic about current business conditions and the labor market.