Weekly Market Commentary December 8th to December 12th 2025

Several economic data releases scheduled for this week were pushed into January, including the Producer Price Inex (PPI) and Personal Consumption Expenditures (PCE) inflation for October. However, all eyes were focused on the Federal Open Market Committee (FOMC) December meeting heading into the week.

Employment data was the first noteworthy release, with ADP reporting a weekly gain of 4.8k, snapping a streak of three consecutive weekly declines. Additional employment data came from the Bureau of Labor Statistics that released the September and October Job Opening Labor Turnover Survey that unexpectedly increased to 7.7 million and a five-month high. The largest increases in opening rates were in sectors most exposed to tariffs, including trade & transportation and manufacturing. This may reflect firms preparing to take on more staff now that tariff-related uncertainty has diminished.

The most anticipated release for the week was from the FOMC who were widely expected to cut the overnight rate by 25bps and did just that, but the details show that it was a close call. The latest dot plot highlights the dispersion of opinions among Committee members. While the median forecast anticipates one additional rate cut next year, unchanged from the September forecast, seven Fed officials continue to anticipate no further reduction in policy in 2026. This suggests that without a material change in either inflation or employment, the Committee appears poised for a pause and will have a wait and see approach after 175bps of cuts since last September.

Equity markets opened the week with the S&P 500 at 6,870 and traded mostly sideways to start the week until setting a new all-time high on Thursday. However, after Broadcom released earnings after the bell, and beat on the top and bottom line on record revenue, management warned investors that its gross margin for the first quarter would be lower than the previous three months because of a “higher mix of AI revenue”. This restoked fears of lofty valuations in the IT sector and markets declining just under 1% to end the week at 6,827 with the YTD gain now at 16.1%.
U.S. Treasury yields had a mixed reaction after the FOMC, with the 2-Year Treasury yield finishing at 3.53% down slightly from 3.56% to open the week while the 10-Year Treasury yield opened the week at 4.14% and closed at 4.19%.

For this upcoming week there will be several important economic indicators including the employment and CPI inflation reports for November, as well as a number of FOMC governors speaking throughout the week.