Weekly Market Insights
December 5, 2025 Volume 12 Issue 49
Global equities posted modest gains this week, with the S&P 500, Nasdaq, and Dow Jones Industrial Average rising. Small caps outperformed large caps, and international markets were mixed but still positive. Sector performance was uneven: Energy led, while Healthcare and Utilities declined. Commodities generally strengthened, led by natural gas and silver, while Bitcoin dipped, continuing its recent weakness.
Economic conditions remain influenced by liquidity flows and policy uncertainty. Treasury settlement day saw $25 billion accessed through the Fed’s Standing Repo Facility, the second highest on record, highlighting ongoing funding pressures despite recent rate cuts. The market predicts the Fed will implement another 25-basis-point cut at its December meeting, with futures pricing in an 87% likelihood of that occurring. Similarly, two additional cuts are expected in 2026. Public comments indicate a closely balanced decision in December, with some officials advocating caution on inflation and others signaling room to cut; the minutes and speeches revealed a wide range of long-term rate opinions. Early signaling of a favored successor could create a “shadow chair” dynamic that complicates communication; markets intermittently price more aggressive 2026 easing paths than were projected in previous Summary of Economic Projections (SEPs).
Housing affordability remains a key challenge. Even though mortgage rates have fallen, supply constraints persist, and the gap between the cost of new and existing homes has narrowed to its lowest level in years. This difference between prices and supply highlights why monetary policy alone probably won’t solve affordability issues. The near-term focus is the Dec 9-10 FOMC rate decision and the catch-up releases of Labor statistics.
Have a great weekend!
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*All economic release data referenced from public sources believed to be accurate. *The source of data for all charts/graphs included in this presentation is Bloomberg LP. *Figures quoted represent monthly changes (m/m) and are seasonally adjusted.