Market Update – December 15th, 2025

Sound Planning Group Team

Financial Markets

Tech stocks weighed on markets last week, driven in part by Oracle’s lackluster earnings results and renewed concerns about overinvestment without a clear path to AI monetization. As of Friday, December 12th, the value-heavy Dow Jones Industrial Average rose 1.05%, while the S&P 500 declined 0.63% and the Nasdaq Composite fell 1.62%.

Market News

Federal Reserve Meeting. The Federal Reserve held its final policy meeting of the year last week and delivered the widely anticipated 25 basis-point rate cut, bringing the federal funds target range to 3.50% to 3.75%.

Chair Jerome Powell noted that economic activity continues to expand at a moderate pace, although job gains have slowed and the unemployment rate has edged higher. He also highlighted that inflation has risen from earlier in the year and remains somewhat elevated, reinforcing the Fed’s continued focus on balancing both labor-market stability with price stability under its dual mandate.

Equity markets initially reacted positively, though momentum faded Wednesday evening into Thursday morning as investor sentiment was weighed down by softer than expected quarterly earnings and high capex spending from Oracle.

Summary of Economic Projections

With the rate decision largely expected, the most meaningful new information came from the central bank’s quarterly Summary of Economic Projections. The projections were relatively stable compared with the prior quarter, though they included a few incremental adjustments.

GDP growth expectations were revised up slightly over the next three years, unemployment forecasts remained unchanged, and inflation expectations edged slightly lower for year-end and for 2026.

Importantly, the Fed’s interest-rate path, the portion of the SEP most directly under its control, was left unchanged, with policymakers still anticipating one rate cut next year. Markets generally viewed both the meeting and the updated projections as positive developments, offering reassurance that policy is gradually shifting toward a more accommodative stance while balancing economic growth and inflation risks.

Market Expectations for Monetary Policy

With the Federal Reserve projecting one rate cut next year in its updated Summary of Economic Projections, it’s helpful to compare that outlook with how markets are currently positioned. Currently, futures markets are pricing in the most likely scenario of two or more rate cuts next year, diverging from the Fed’s single-cut projection.

The probability of one or no cuts stands at 27.4%, while markets are assigning roughly a 15% chance to cumulative cuts of 100 bps or more in 2026, a scenario that would likely reflect a more pronounced slowdown or recession. Expectations remain highly dispersed and subject to sizable shifts as new data emerges, but futures markets still provide a useful snapshot of how investors are pricing interest rate expectations heading into the new year.

Source: CME Group FedWatch, as of 12/15/25

Leading Indicators

The Conference Board’s Leading Economic Index declined again in September, continuing a slow softening trend. Strength in equity markets and an improvement in the Leading Credit Index helped cushion the decline, while weaker consumer expectations for business conditions and a drop in new orders weighed on the index.

Even with the latest decline, the LEI’s six-month rate of change has improved enough that the index no longer signals an outright recession, instead pointing to a more moderate outlook marked by slower economic momentum but not a clear indication of contraction.

Source: The Conference Board

Initial Claims Normalize

After hitting a three-year low the prior week, initial jobless claims moved back toward more typical levels. For the week ending December 6th, claims rose to 236,000, an increase of 44,000 from the previous week’s upwardly revised 192,000. The data series is historically volatile, and the sharp rebound indicates that the earlier low was more likely a statistical outlier than a meaningful shift in labor market conditions.

The latest reading brings claims back in line with their recent range and points to a labor market that remains broadly steady, though not immune to short-term fluctuations.

Source: Bureau of Labor Statistics

Big Week Ahead

With the Christmas holiday approaching, the coming week features a heavy slate of economic data, including several releases that were delayed by the federal shutdown.

On Tuesday, markets will receive updates on the unemployment rate, nonfarm payrolls, average hourly earnings, and retail sales. Thursday brings CPI, leading indicators, and initial jobless claims. Friday rounds out the week with another GDP estimate, PCE inflation, and data on personal income, spending, and saving.

Together, these releases create multiple potential catalysts for markets. Softer inflation combined with steady growth could support further upside, while inflation surprises or clearer signs of labor market weakness would pose near-term risks.

Summary

Markets were mixed last week as weakness in large technology stocks weighed on broader indexes, while value-oriented sectors supported gains in the Dow. The Federal Reserve delivered an expected rate cut and maintained a cautious but supportive policy outlook, which markets generally viewed as constructive, even as futures continued to price in more easing than the Fed currently projects. Economic data remained mixed, with leading indicators and jobless claims pointing to slower but stable growth, setting the stage for a data-heavy week ahead that could shape near-term market direction.

We appreciate your continued trust.

Thank you,

Joseph M. Maas,
CFA, CFP®, ChFC, CLU®, MSFS, CCIM, CVA, ABAR, CM&AA

The information contained herein is general in nature. It does not take into account your particular investment objectives, financial situation, or needs. It is provided for illustrative or informational purposes only, and should not be construed as advice. Our advisors can meet with you to discuss your retirement plan.

Content is used with the permission of Synergy Asset Management. This information is being provided to you as it has been determined by SPG Advisors LLC to be suitable in relation to your portfolio, needs, objectives, and other considerations. SPG Advisors, LLC and Synergy Asset Management are affiliated. All such information is provided solely for convenience, educational, and informational purposes only. Past performance does not guarantee future results. All investing comes with risk, including risk of loss. No investment strategy can guarantee a profit or protect against loss in periods of declining values. All rights reserved. No part of this publication may be reproduced, distributed or transmitted in any form without the prior written permission of the publisher.

Read More:

• Market Update – January 12th, 2025
• Market Cycle Update – December 2025
• U.S. Strike on Venezuela
• Market Update – December 22nd, 2025
• Market Update – December 15th, 2025