Weekly Commentary (12/8/25) - Let’s Go Fed!

Wall Street wrapped up the week with modest gains as investors grew increasingly confident that recent economic data gives the Federal Reserve room to reduce interest rates.
The S&P 500 advanced 0.19%, the Dow Jones Industrial Average gained 0.22%, and the Nasdaq Composite added 0.31%. Small-cap stocks (Russell 2000) outperformed with a 0.8% gain. International equities also rallied—developed markets (EAFE) rose 1.3%, and emerging markets climbed 1.4%. Oil prices advanced 2.8% to $60.17 per barrel, while gold slipped 0.2%.
Economic Highlights
The week’s key report came from the Bureau of Economic Analysis, which showed the Personal Consumption Expenditures (PCE) Index—the Fed’s preferred inflation measured 0.3% in September, and 2.8% year-over-year, matching expectations and signaling steady progress toward the Fed’s 2% target.
Meanwhile, the Labor Department reported that initial jobless claims fell sharply to 191,000, the lowest level since 2022, an encouraging sign for labor market resilience. Consumer sentiment, as measured by the University of Michigan, improved 2.3 points to 53.3, reflecting cautious optimism among households.
Fixed Income
Bond prices declined modestly as yields rose. The 10-year Treasury yield climbed 12 basis points to 4.14%, while the 30-year reached 4.79%, its highest level in three months.
With improving inflation data, solid employment figures, and stable consumer sentiment, markets are positioning for what could be a constructive end to the year; especially if the Fed signals a softer stance on rates.
Looking Ahead
As we approach year-end, it’s a good time for investors to:
•    Review asset allocations to ensure portfolios remain aligned with goals and risk tolerance.
•    Evaluate tax-loss harvesting opportunities before December 31.
•    Plan for 2026 cash needs and manage capital gain thresholds proactively.
“The stock market and the economy are two different things.”
— Milton Friedman