Sector performance was also split for the month, as Financials led, advancing 3.1%. Communication Services, Materials, and Technology were all positive in December. Utilities took the most significant hit, ending down 5.1%, followed by Real Estate, which was down 2.1%.
The government resumed most economic data releases, providing more visibility into the broader economy. Nonfarm payrolls for November came in positive once again, although unemployment continued to tick upwards. The Fed Funds Rate was cut an additional 25 basis points, leaving the target range at 3.50-3.75% to end 2025. Expectations are more muted for the January 28th FOMC meeting, at just a 16% chance of a fourth straight cut, according to CME FedWatch.
Treasury yield movement was split in December, as the short end of the curve decreased and the long end increased, with the 2-year remaining unchanged. The largest decline occurred in the 1-month, down 31 basis points to 3.74%. The 30-year had the most significant jump, up 17 basis points to 4.84%.
The S&P 500 finished 2025 up 16.4%, but that headline return masks one of the most volatile stretches of the year. March ultimately marked the index’s worst month of 2025, as selling pressure intensified amid rising uncertainty around tariffs and international trade policy.
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