So Long, 2025: Stocks Down for Week, Up 17% YTD

Published as of: December 31, 2025, 9:09 a.m. ET

(Editor's note: Due to light holiday trading ahead of tomorrow's New Year's Day holiday, today's Schwab Market Update is an abbreviated version. For late-breaking market news, please tune in to the Schwab Network, which will be broadcasting today from 8 a.m. until 4:30 p.m. ET.).

(Wednesday market open) A wild but ultimately positive year on Wall Street ends today with the S&P 500 index tracking for 17% gains in 2025 and the Nasdaq 100 (NDX) up more than 21%. Today is a normal trading session for stocks and so is Friday but tomorrow is closed for New Year's Day. Treasuries close early today at 2 p.m. ET. All this means the low volume, featureless trading seen earlier this week might continue, with stocks down again ahead of the open amid a light news flow. Weekly initial jobless claims of 199,000 and continuing claims of 1.866 million released this morning both were below expectations.

Minutes yesterday from the last Federal Reserve meeting showed officials focused on stubborn inflation brought about partly by tariffs, along with rising unemployment. Still, they expect the pace of economic growth to accelerate in 2026 thanks to support from fiscal policy, easing regulations, and "somewhat favorable" financial market conditions. Even some who voted in favor of a rate cut indicated their decision was "finely balanced" and they could have supported leaving rates unchanged. Looking ahead, participants said they could support future rate cuts if inflation falls as expected, while some thought rates shouldn't be lowered again for a while to provide time for assessing the lagged effect of lower rates on the economy.

Wall Street's slow grind lower continued yesterday, with major indexes losing ground for the third day in a row but finishing not far from all-time highs posted last Thursday. The S&P 500 index will post its third straight year of double-digit gains for the first time since a stretch from 2019 through 2021. . Sector-wise, the biggest gainers this year are communication services, info tech, and industrials, while real estate lags with just a 0.6% rise. Every sector, however, is likely to finish 2025 in the green for the first time since 2021, according to S&P Global. It's a very different outcome than investors might have imagined back in April when stocks plunged on tariff fears, though their delayed impact might still be felt.

1. Peeking under the surface: Industry-wide net equity fund flows are on track for the best month of the year, so there are buyers in this market. It's likely they are repositioning some of their holdings into other sectors beyond tech. There appears to be a recent bias toward the cyclical sectors, as financials, materials, communications, discretionary, and industrials are showing the best breadth. Positioning still looks healthy with 63% of S&P 500 stocks above their 50-day moving average and 61% above the 200-day moving average as of Tuesday's close. Monday's sell-off featured three stocks declining for every two advancing, but volume was light, so take that with a grain of salt. Six of 11 S&P 500 sectors rose Tuesday despite the index's tepid performance, led by energy and communication services. Pressure on info tech and consumer discretionary continued.
    
2. Silver, copper strength factor into inflation fears: Metals prices remained volatile early today, with silver and gold back in the red. Silver futures (/SI) were down more than 8% in overnight trading but remain near all-time highs. CNBC reported today that, starting tomorrow, China might restrict silver exports, which could reduce supplies and play into market volatility. Silver and copper—also up sharply this year—are important industrial metals, so their strength could make life more difficult for major companies that depend on these materials. Tech and industrials both come to mind, with Tesla (TSLA) CEO Elon Musk calling out the trouble with high silver prices earlier this week. Higher metals prices also could ultimately be tough for the Fed if they begin factoring into producer or consumer inflation readings. The impact sometimes shows up first in producer prices, which the government will release in mid-January.
    
3. Catalysts awaited, but not until next week: With economic reports and earnings sparse between now and next week's jobs data, it might be difficult for major indexes to break out of their current ranges, barring some sort of geopolitical drama. Next week brings several readings on employment, including November job openings, but the main event is likely to be December nonfarm payrolls due January 9. Earnings season begins the week of January 12 when large U.S. banks start reporting, along with some airlines. Analysts expect solid fourth quarter S&P 500 earnings growth of around 8.3%, according to FactSet, down from 13.6% in the third quarter.

Mining stocks, including Newmont (NEM) and Hecla (HL), were back in the red this morning as silver tumbled.
 

Taiwan Semiconductor (TSM) rose 1% in early trading as Reuters reported that Nvidia (NVDA) approached the firm about increasing production of the H200 chip now allowed to be exported to China. Demand from China has jumped, sources told Reuters.
 

Warner Bros. Discovery (WBD) shares are down more than 0.5% after CNBC's report late Tuesday that the company would reject Paramount Skydance's (PSKY) bid next week. Netflix (NFLX), which has a competing bid on the company, fell slightly ahead of the open.
 

Bitcoin (/BTC) climbed more than 1% in early trading but remains below $90,000 and appears stuck in a trading range between $85,000 and $90,000.
 

Semiconductors were generally higher this morning, with TSM leading the charge but Nvidia, ASML (ASML), and Intel (INTC) also moving up.
 

Tesla fell 1% yesterday and has been volatile lately, but is still up 21% year-to-date, outpacing the S&P 500 index.
 

Nike (NKE) added 2.8% in trading ahead of the open today after a positive write-up from investment banking firm Stifel, which kept a hold rating on the stock.
 

Futures trading prices in 16% odds of a January rate cut as of early today, according to the CME FedWatch Tool.
 

China's official NBS Manufacturing PMI for December moved into expansion territory above 50 at 50.1. Analysts had expected 49.2. This represents slightly improved factory activity amid a rise in new orders, though most reflected domestic demand, not export strength.
 

The U.S. 10-year Treasury note yield ticked higher this morning after China's stronger-than-expected data and light U.S. jobless claims. Still, thanks in part to rate cuts, it's on pace to finish the year down more than 40 basis points from the end of 2024, when it closed at 4.57%.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

January 1: No major earnings or data expected. New Year's Day holiday.

January 2: November construction spending.

January 5: December ISM Manufacturing PMI.

January 6: No major data or earnings expected.

January 7: December ADP employment change, December ISM Services PMI, November Job Openings and Labor Turnover Survey (JOLTS), and expected earnings from Albertsons (ACI), Constellation Brands (STZ), Jefferies Financial Group (JEF), and Applied Digital (ADLP).