Investment Update December 2, 2025

Last Week on Wall Street

On a short holiday week, economic data included gains in retail sales and durable goods orders, as well as higher producer price readings, decelerating home prices, and continued weak consumer confidence. However, the recent government reopening meant some data released was fairly stale at this point.

Equities rebounded into gains last week, led by the U.S. over international. Bonds also fared well as interest rates fell back amidst Fed member dovishness. Commodities also saw gains, mostly in metals.

U.S. stocks recovered back into positive territory last week, following negative performance the week prior, and wrapping up a more volatile November where the S&P 500 only gained 0.2%, but continued a string of seven straight positive months. Stocks gained sharply early in the week as odds of a December Fed rate cut were further absorbed by markets.

Every sector saw positive results last week, led by over 5% gains in communications (Meta and Alphabet) and consumer discretionary (Tesla and Amazon), followed by technology. Laggards included energy and more defensive areas of health care and consumer staples, which still saw nearly 2% gains. Real estate also gained just under 2% for the week. Within the closely-watched AI segment of technology, the prior week’s announcement by Google that it’s developed a fast and less energy-intensive in-house chip specifically for AI boosted that company’s sentiment, while it caused enthusiasm for Nvidia to waver a bit (whose chips remain the industry standard for general AI purposes).

Foreign stocks slightly underperformed U.S. last week, despite the tailwind of a weaker U.S. dollar. Results were largely similar, with Europe slightly outperforming other segments, as inflation reports in Europe came in cooler than expected. Within Emerging Markets, Brazil, Taiwan, and Mexico outperformed other groups.

Bonds gained as interest rates ticked down across the U.S. Treasury yield curve, as investors interpreted Fed comments in regard to future rate cuts. Investment-grade, high yield, and floating rate corporate bonds all outperformed Treasuries slightly for the week, while foreign bonds generally benefited from a weaker U.S. dollar.

Commodities saw gains in all categories last week, led by precious metals and industrial metals. Crude oil rose 2% for the week to $59/barrel, as the trading range has fallen to around $55-65 from a higher range during the summer. Supplies remain high, with demand not quite keeping up to offset it.

(Source LSAConnect)

Fact of the Week

The positive return of the S&P 500 during this year's Thanksgiving week was one of the strongest in history. While markets can do anything, historically a strong Thanksgiving week has resulted in strong equity returns over the following thirteen months.