US Stock Market Today: Dow, S&P 500 and Nasdaq Edge Higher as Fed Rate-Cut Bets Solidify (December 5, 2025)

Wall Street finished modestly higher after the closing bell on Friday, with all three major US stock indexes hovering near record territory as fresh—but delayed—inflation and spending data kept expectations for a Federal Reserve rate cut next week firmly in place. The session was dominated by macro headlines and a blockbuster Netflix–Warner Bros. deal that jolted media stocks and helped extend the market’s year-end rally. ^[1]

Market recap: indexes close just shy of records

By the end of trading on Friday, December 5, 2025:

S&P 500 rose 13.28 points (≈0.2%) to 6,870.40
Dow Jones Industrial Average added 104.05 points (≈0.2%) to 47,954.99
Nasdaq Composite gained 72.99 points (≈0.3%) to 23,578.13
Russell 2000 small-cap index slipped 0.4% to 2,521.48 ^[2]

The moves capped a relatively calm but constructive week for US equities. The S&P 500 advanced about 0.3% for the week, the Dow 0.5%, and the Nasdaq nearly 0.9%, marking a second straight weekly gain for all three benchmarks. ^[3]

On a year‑to‑date basis, Wall Street’s rally is robust: the S&P 500 is now up roughly 16.8% in 2025, the Dow 12.7%, and the Nasdaq a powerful 22.1%, while the Russell 2000 has climbed about 13.1%. ^[4]

Taken together, Friday’s action leaves the S&P 500 “at the edge” of its all‑time closing high set in October, and investors are increasingly treating minor dips as consolidation rather than the start of a deeper correction. ^[5]

Inflation and spending data: Dovish, stale, and market-friendly

The key macro story driving trading today was the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, released with a long delay after this year’s record government shutdown.

Headline PCE rose 0.3% month-on-month in September and 2.8% year-on-year, roughly matching economists’ expectations.
Core PCE, which strips out food and energy, gained 0.2% month-on-month and 2.8% year-on-year, signaling a gradual cooling rather than a re‑acceleration of price pressures. ^[6]

On the growth side, Commerce Department data showed personal spending rising 0.3% in September, while personal income increased 0.4%, suggesting the US consumer is slowing but not stalling. ^[7]

Because these figures are several months old, strategists describe them as “stale but reassuring.” Analysts at Wells Fargo noted that the delayed data confirm inflation and consumer momentum were already fading at the end of the third quarter—before the shutdown added an extra drag—contributing to what they see as a “soft patch” rather than a full‑blown downturn. ^[8]

More real‑time sentiment data from the University of Michigan showed consumer confidence ticking higher in early December, helped in part by younger households, even as many respondents still complained about high prices. ^[9]

For equity traders, the takeaway was simple: inflation is not hot enough to derail easing hopes, and growth is not weak enough to scream “recession.”

Fed expectations: Markets almost fully price a December rate cut

Following the data, Fed futures markets are now pricing roughly an 87–90% probability that the Federal Reserve will cut its policy rate by 25 basis points at next week’s meeting—up sharply from under 30% just two weeks ago. ^[10]

According to CME’s FedWatch tool, traders see a very high chance of a quarter‑point cut on Wednesday. ^[11]
A weekly market update from the Federal Home Loan Bank of New York similarly highlights that rate‑cut odds rebounded to around 90% after wobbling late last month. ^[12]

RBC Economics argues that “dovish” September data will likely steer the Fed toward easing, even though the central bank is operating in what it calls a “foggy” environment with key October and November inflation reports still missing. Their economists now expect a 25‑basis‑point cut, which would lower the federal funds target range to 3.50–3.75%, noting that core PCE running around 2.8% year‑over‑year and an unemployment rate of 4.4% give policymakers room to prioritize the labor side of their mandate. ^[13]

At the same time, RBC emphasizes that there is “no risk‑free path” for the Fed: cut too aggressively and inflation could reignite; stay on hold and a weakening job market could tip the economy into recession. ^[14]

The FHLBNY update paints a similar picture of mixed but softening labor data:

ADP private payrolls showed a net loss of 32,000 jobs in the latest reading, the fourth decline in six months.
Challenger data revealed a 23.5% year‑over‑year jump in announced job cuts.
Initial jobless claims dipped to a three‑year low of 191,000, but continuing claims remain elevated, suggesting it is getting harder for laid‑off workers to find new positions. ^[15]

That tug‑of‑war between cooling inflation and a fragile labor market is exactly what equities are trading on heading into next week.

Netflix’s $72 billion Warner Bros deal reshapes media stocks

Today’s biggest corporate story—and one of the year’s largest deals—came from Hollywood.

Netflix agreed to acquire Warner Bros. Discovery’s film studio and streaming operations in a cash‑and‑stock deal valued at about $72 billion, or roughly $27.75 per WBD share, ending a weeks‑long bidding war. ^[16]

Market reaction was split:

Warner Bros Discovery (WBD) jumped about 6.3%
Netflix (NFLX) fell roughly 2.9%
Rival bidder Paramount Skydance (PSKY) slumped nearly 9.8% ^[17]

The transaction will give Netflix control of high‑profile intellectual property including DC Comics, HBO’s prestige series and the Warner Bros film library, while WBD plans to spin off its traditional cable networks into a separate entity. The deal includes a multi‑billion‑dollar breakup fee if regulators block it and is expected to close sometime in 2026, pending approvals. ^[18]

Investors cheered the tie‑up for WBD but worried about integration risk and regulatory scrutiny for Netflix, which helps explain the opposite stock moves. In a call with analysts, Netflix’s leadership portrayed the purchase as a “rare opportunity” to accelerate its global content ambitions rather than a shift away from the company’s historically organic growth strategy. ^[19]

The communication services sector, home to many media and internet names, ended the day as the best‑performing S&P 500 group, gaining close to 1% and notching a record closing high. ^[20]

Ulta Beauty tops the S&P 500; SoFi and healthcare fade

Outside of media, the standout winner on Friday was Ulta Beauty.

Ulta shares soared about 12.7%, making it the top performer in the S&P 500 after the company delivered a “beat‑and‑raise” quarter. ^[21]
The beauty retailer reported stronger‑than‑expected same‑store sales growth of 6.3%, highlighted robust e‑commerce momentum and pointed to solid early trends for Black Friday and Cyber Monday. ^[22]

Analysts at UBS said the report eased fears of a near‑term sales slowdown and suggested Ulta still has room to outperform into the holiday season, pointing to its ability to gain market share while managing promotions more efficiently. ^[23]

On the downside:

SoFi Technologies dropped around 6–7% after the fintech‑turned‑bank announced a $1.5 billion stock offeringpriced at $27.50 per share, which will dilute existing shareholders even though the stock remains sharply higher for the year. ^[24]
The S&P 500 healthcare index fell after US vaccine advisers withdrew a longstanding recommendation that all newborns receive the hepatitis B vaccine at birth, a shift that sparked concerns around demand for some products in the space. ^[25]

Market breadth was slightly negative, with losers edging out winners on both the NYSE and Nasdaq, even as the major indexes closed in the green—an indication that the day’s rally was driven by a relatively narrow set of large names and sector stories. ^[26]

Big Tech and market leadership: A quieter day, but a broader rally

Mega‑cap tech, which has dominated returns for much of the year, had a mixed session:

Broadcom gained more than 2%, and Meta Platforms rose about 1%
Alphabet, Microsoft, Amazon and Tesla were modestly higher
Nvidia and Apple slipped slightly, giving back a portion of their recent rebound ^[27]

Recent analysis highlighted in Investopedia shows that the so‑called “Magnificent Seven” nearly fell into a technical correction in November amid investor worries over heavy artificial‑intelligence spending, even as other sectors—particularly healthcare and energy—quietly outperformed. Roughly 60% of S&P 500 constituents beat the index last month, suggesting leadership is broadening beyond the mega‑cap complex. ^[28]

That shift is echoed in the small‑cap space. Reuters notes that the Russell 2000 is up 0.8% this week after a 5.5% surge last week, with investors gravitating toward more cyclical, higher‑beta names that typically benefit from falling interest rates. One portfolio manager described “low‑quality, highly leveraged businesses” as some of the best performers in recent sessions—exactly the kind of risk‑on behavior often seen when markets start to price a sustained easing cycle. ^[29]

Bonds, dollar, commodities and crypto: Calm before the Fed

Outside of equities, Friday’s moves were relatively contained but tilted toward a risk‑on tone:

The 10‑year U.S. Treasury yield edged up to about 4.14%, from roughly 4.10% on Thursday, as traders adjusted positions ahead of next week’s rate decision. ^[30]
Gold futures slipped around 0.2% to $4,235 an ounce, consistent with reduced demand for safe havens. ^[31]
West Texas Intermediate (WTI) crude advanced roughly 0.7% to about $60.10 a barrel, supported by expectations of stronger demand once monetary policy begins to ease. ^[32]
Bitcoin traded near $89,700, below recent highs above $92,000 and well off its 2025 peak above $125,000, while the U.S. dollar index was essentially flat near 99. ^[33]

A separate fixed‑income analysis from the FHLBNY notes that the Treasury yield curve has been relatively stable over the past two weeks, and implied volatility in options has drifted toward multi‑year lows—another sign that markets are in a holding pattern ahead of fresh guidance from the Fed. ^[34]

Strategy and outlook: Liquidity wave vs. data fog

While attention is squarely on next week’s Fed decision, strategists are already debating what comes next for 2026:

A Fortune analysis argues that a “vast wave of incoming liquidity” from central‑bank easing and cash on the sidelines could help the S&P 500 push to new record highs, even as investors worry about frothy AI and crypto trades. ^[35]
At the same time, both RBC and FHLBNY stress that the Fed is making decisions with unusually incomplete data—October and much of November inflation and jobs statistics will only be published after the meeting—raising the risk of policy surprises and future volatility. ^[36]

Next week’s calendar is dense:

The Fed’s December meeting (decision and updated “dot plot” expected mid‑week)
JOLTS job‑openings data for both September and October
The NFIB Small Business Optimism Index
The Employment Cost Index, weekly jobless claims and delayed trade data ^[37]

How stocks trade after the bell today and into Monday’s open will likely depend on whether investors continue to treat any pullbacks as a chance to buy ahead of that catalyst cluster—or start to lock in year‑to‑date gains in case the Fed’s message is less dovish than the futures market expects.

Key takeaway after the bell

For now, “Goldilocks” remains the default narrative:

Inflation is drifting toward the Fed’s target without collapsing growth
The Fed is widely expected to cut rates next week
Corporate earnings and deal activity (exemplified by Netflix–Warner Bros and Ulta’s results) are still supporting risk appetite

But with indexes near records and liquidity expectations running high, even a small surprise from the Fed—or a negative twist in the data—could quickly test just how sturdy this late‑year rally really is.