Equities Advance in the First of Two Holiday-Shortened Trading Weeks to Close the Year

Equities Advance in the First of Two Holiday-Shortened Trading Weeks to Close the Year

Stocks finished higher in the first of a two-week stretch of holiday-shortened trading to wrap up 2025. Global equities, as measured by the MSCI ACWI, gained 1.44% for the week, while domestic large-cap stocks, measured by the S&P 500, rose 1.41%. Emerging markets were the best-performing asset class, returning 2.14% for the week.

U.S. GDP Growing

The U.S. economy expanded at its fastest pace in two years in the third quarter, according to preliminary data from the Bureau of Economic Analysis, with real GDP growing at a 4.3% annualized rate, accelerating from 3.8% in the second quarter and coming in well above expectations near 3%, driven largely by a pickup in consumer spending.

U.S. Consumer Confidence Falling

On Tuesday, the Conference Board reported that U.S. consumer confidence declined for a fifth consecutive month in December, with the Consumer Confidence Index falling to 89.1 from November’s upwardly revised 92.9 and below expectations near 91.5. The weakness was broad-based, as four of five components declined, consumers’ views on current business conditions turned negative for the first time since September 2024, and concerns about employment prospects and household income weighed on sentiment.

Labor Market Update

Elsewhere, the Labor Department reported that initial applications for unemployment benefits totaled 214,000 for the week ended December 20, down 10,000 from the prior week and below expectations near 231,000, while continuing claims increased by 38,000 to 1.923 million.

Looking Ahead

For the week ahead, the economic calendar is relatively light due to the New Year’s holiday, with housing data in focus early as pending home sales from the National Association of Realtors and the Case-Shiller 20-City Home Price Index are released, followed midweek by the publication of minutes from the Federal Reserve’s December 9–10 meeting, while Thursday brings weekly unemployment claims and construction spending data, and financial markets remain closed on Friday in observance of the New Year’s holiday.

As Always

I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.