Market Update – December 1st, 2025
Financial Markets
Stocks rose during the shortened holiday week as economic concerns eased, tech-bubble worries faded, and confidence grew around a potential rate cut at the December FOMC meeting. Markets ended the month on a strong note, with the Nasdaq Composite up 4.91%, the S&P 500 up 3.73%, and the Dow Jones Industrial Average up 3.18% last week.
Market News
Retail Sales. September’s retail sales were slightly softer than expected, rising 0.2% for the month. The modest headline gain was held back by a 0.3% decline in auto-related sales, which offset strength across several other categories.
On an annual basis, retail sales increased 4.3%, outpacing inflation and indicating that consumer demand remains relatively resilient. Non-store retailers, largely reflecting online shopping, rose 6% year over year, while food and drinking places increased 6.7%, underscoring continued strength in discretionary spending.
Source: US Census Bureau
Consumer Confidence
US consumer confidence declined sharply in November, falling to its lowest level since April after several months of more stable readings. The pullback was broad based, with respondents reporting reduced confidence in job availability, income prospects, and overall financial conditions, both currently and looking ahead.
By demographic group, confidence improved slightly among individuals under age 35 but declined across all other age brackets. Among income groups, those earning less than $15,000 annually were the only cohort to see an improvement, although they remained the least optimistic overall. By politics, confidence was down across the spectrum, falling for Republicans, Democrats, and most sharply for Independents.
The report highlights a continued disconnect in consumer behavior, as sentiment has softened while spending remains resilient, suggesting that consumers continue to act more confidently than they feel.
Source: The Conference Board
September Wholesale Inflation
The September PPI report, released last week after the shutdown-related delay, showed that headline producer inflation rose 2.7% year over year and core PPI increased 2.9%. Both measures held at the same annual pace as in August, indicating steady but not accelerating wholesale inflation.
On a monthly basis, wholesale prices rose 0.3%. Core wholesale prices, which exclude food and energy, increased 0.1% for the month. Food and energy were the primary drivers of the monthly headline increase, as food prices rose 1.1% and energy prices rose 3.5% from August to September.
Goods prices increased 0.9% in September, though nearly all of the gain came from higher food and energy prices. Excluding those categories, goods prices rose a much more modest 0.2%. Services prices were flat for the month and likely would have posted a decline, if not for the energy-related increase in transportation costs, which were up 0.8% in September.
Overall, the report reflected another month of stable producer inflation. The pace of improvement remained slower than what the Federal Reserve and many businesses and consumers would have hoped to see, but the data stayed within a manageable range and supported the case for the central bank to potentially entertain a December rate cut.
Source: Bureau of Labor Statistics
Initial Claims
Initial jobless claims moved lower over the past two months after the temporary spike seen in early September. For the week ending November 22nd, claims were reported at 216,000, a level that remained historically low and better than economists had expected.
As shutdown-delayed data continues to be released, the report offered further confirmation of a stable labor market and did not reveal any unexpected signs of weakness.
Source: FRED
Summary
Stocks moved higher during the shortened holiday week as economic data helped ease broader concerns. Inflation continued to present modestly, retail sales were steady, and weekly initial jobless claims remained historically stable, however consumer confidence softened. Even with mixed signals from consumers, expectations for a potential December rate cut supported market sentiment and helped the market recover from its mid-month pullback.
We appreciate your continued trust.
Thank you,
Joseph M. Maas,
CFA, CFP®, ChFC, CLU®, MSFS, CCIM, CVA, ABAR, CM&AA
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