New York time check: Friday, December 26, 2025, 5:03 p.m. ET.
With the closing bell already behind us, Wall Street wrapped up a quiet, post-Christmas session near record territory—then shifted quickly back into “year-end positioning” mode. The S&P 500 finished fractionally lower at 6,929.94, while the Dow Jones Industrial Average ended at 48,710.97 and the Nasdaq Composite closed at 23,593.10—all moves of roughly a tenth of a percent or less. [1]
The lack of fireworks wasn’t the point. What matters heading into the final three trading days of 2025 is why stocks are still hovering near all-time highs, where leadership is shifting, and which catalysts could break the market’s holiday calm—starting with the next major macro headline: the Federal Reserve’s December meeting minutes on Tuesday (Dec. 30) at 2:00 p.m. ET. [2]
Market recap: A muted close near record highs as liquidity dries up
Friday’s price action read like a classic holiday session: narrow ranges, lighter volume, and a market that feels “held up” rather than “pushed up.”
- S&P 500: 6,929.94 (down 2.11 points, <0.1%)
- Dow: 48,710.97 (down 20.19 points, <0.1%)
- Nasdaq: 23,593.10 (down 20.21 points, ~0.1%) [3]
The key context is participation. With many institutional desks effectively done for the year, trading conditions can become deceptively calm—then suddenly jumpy—because even modest orders can move prices more than usual. The Associated Press described trading as “extremely light,” noting institutional investors had largely closed out positions. [4]
Reuters made a similar point, emphasizing that thin year-end volumes can amplify day-to-day swings even when the underlying narrative hasn’t changed. [5]
The bigger 2025 picture: S&P 500 near 7,000, and a rotation story investors can’t ignore
Even after Friday’s tiny dip, the market is closing out 2025 with momentum:
- The S&P 500 is up nearly 18% in 2025, according to AP. [6]
- Reuters noted the S&P 500 is about 1% away from 7,000 and on pace for an eighth straight monthly gain—its longest streak since 2017–2018. [7]
But the late-year story isn’t just “stocks up.” It’s leadership broadening beyond mega-cap tech.
Reuters highlighted that while technology has been the market’s long-running engine, financials, transports, healthcare, and small caps have shown relative strength recently—suggesting a rotation into areas with more moderate valuations. Ameriprise’s Anthony Saglimbene framed it as investors buying into the idea that the economy has stayed on “pretty solid footing.” [8]
That rotation matters for investors because it can change what “works” in 2026: the top-performing names and sectors of the past cycle don’t always lead the next one.
“Santa Claus rally” watch: Seasonal strength meets a very expensive market
Year-end has a reputation for strength, and December 26 has historically been an unusually consistent up day. MarketWatch, citing Bespoke Investment Group, reported that December 26 has been the S&P 500’s most consistently positive trading day over a long historical sample, and it also falls within the “Santa Claus rally” window (last five trading days of the year plus first two of January). [9]
But “seasonality” is not a catalyst by itself. It’s more like a tailwind—useful for framing sentiment, not for replacing fundamentals. And fundamentals are exactly what investors are debating right now: earnings growth, Fed policy, and whether the AI-driven capex cycle is sustainable.
Reuters’ Paul Nolte (Murphy & Sylvest) summed up the market’s current posture succinctly: “Momentum is certainly on the side of the bulls.” [10]
Rates and the Fed: The next macro catalyst hits Tuesday at 2 p.m. ET
The dominant macro lens into year-end is still the Fed.
Reuters reported the Fed cut rates by 75 basis points across its last three meetings of 2025, bringing the benchmark range to 3.50%–3.75%. [11]
What investors want now is clarity on how fast—and how far—cuts continue in 2026.
- Reuters’ Michael Reynolds (Glenmede) noted markets are intensely focused on “handicapping how many rate cuts” are coming next year. [12]
- Reuters’ broader market wrap added that traders were pricing at least two cuts in 2026, but not expecting the Fed to move before June (as of Friday). [13]
The next scheduled Fed headline
The Federal Reserve Board’s calendar lists the release of the FOMC minutes (Dec. 9–10 meeting) for Tuesday, Dec. 30 at 2:00 p.m. ET. [14]
Minutes can move markets when they shift expectations around:
- the Fed’s “reaction function” (what it needs to see to cut again),
- internal disagreement,
- how officials view growth/inflation risks.
And because trading conditions are still seasonally thin, even a modest surprise in the tone of the minutes can produce an outsized move.
Policy uncertainty: The Fed chair decision becomes a market variable
In addition to data and rates, personnel risk is back in the spotlight.
Reuters reported investors are watching for President Donald Trump’s decision on a new Fed chair to replace Jerome Powell when Powell’s term ends in May—and that any signal of the choice could sway markets. [15]
Even without immediate action, markets can reprice on perception: who gets nominated can influence expectations around future policy bias.
Commodities steal the spotlight: Silver and gold hit records as oil slides
While equities barely moved, precious metals were anything but quiet.
Reuters reported:
- Silver hit an all-time high around $77.4/oz, driven by supply deficits and safe-haven demand (and Reuters also noted the metal’s designation as a U.S. critical mineral). [16]
- Gold touched a record around $4,549/oz before easing slightly, supported by rate-cut expectations and a weaker dollar. [17]
- MUFG commodities analyst Soojin Kim said the rally could continue, supported by physical demand and persistent geopolitical/monetary uncertainty. [18]
The Associated Press similarly highlighted silver’s surge (up nearly 8% on the day) and tied the broader move to safe-haven demand and expectations for additional Fed easing. [19]
Meanwhile, oil prices fell more than 2%, with AP reporting U.S. crude down 2.8% and Brent down 2.6% on the day. [20]
The session is closed now: what investors should know before the next open
Because it’s after 4:00 p.m. ET, the regular session on NYSE and Nasdaq is closed. The NYSE lists its Core Trading Session as 9:30 a.m. to 4:00 p.m. ET. [21]
Nasdaq also lists standard market hours as 9:30 a.m. to 4:00 p.m. ET, while noting extended-hours sessions exist. [22]
Next regular session
The next regular trading day is Monday, December 29, 2025, with the market opening at 9:30 a.m. ET (barring unexpected exchange announcements). [23]
What tends to matter most in the final week of the year
- Liquidity and spreads
Thin trading can mean wider bid-ask spreads and more “air pockets,” especially in smaller-cap names. This is one reason pros often prefer limit orders over market orders in holiday week conditions. - Year-end positioning and rebalancing flows
Fund rebalancing, tax-related selling, and window dressing can move individual stocks and sectors—even when the index barely budges. - Macro calendar catalysts (still light, but not empty)
The New York Fed’s economic calendar shows notable items for Monday, Dec. 29, including:- Advance International Trade in Goods (8:30 a.m. ET)
- NAR Pending Home Sales Index (10:00 a.m. ET)
- Dallas Fed Manufacturing Survey (10:30 a.m. ET) [24]
- Headline risk is elevated
With fewer participants, markets can react more sharply to surprise geopolitical or policy headlines (including Fed leadership signals). [26]
Outlook and forecasts: what strategists are projecting for 2026—and the risks they fear
Wall Street’s base case for 2026 is still broadly constructive—but far from unanimous.
The “moderate upside” camp
Investopedia reported that as of mid-December, an LPL Financial analysis put the average 2026 year-end S&P 500 target at 7,269—roughly mid-single-digit upside from late-2025 record levels. LPL CIO Mark Zabicki warned investors should remain prepared for periodic volatility, citing policy uncertainty and high market concentration. [27]
Reuters also reported (separately) that a Reuters poll saw the benchmark rising to about 7,490 by end-2026, with strategists pointing to AI momentum and Fed cuts—but warning that valuations, inflation, and tariff tensions could still trigger corrections. [28]
And Reuters reported Citi’s year-end 2026 S&P 500 target of 7,700, with a bull case of 8,300 and a bear case of 5,700, citing earnings strength and AI as a continuing theme. [29]
The “bull market isn’t done” framing (but expect bumps)
Morgan Stanley Investment Management’s Andrew Slimmon argued in a 2026 equity outlook that the bull market could continue, supported by rate cuts and policy dynamics (while acknowledging late-cycle features). [30]
J.P. Morgan’s 2026 market outlook also emphasized concentration and crowding risks—describing a “winner-takes-all” dynamic—suggesting investors may need to be more selective rather than simply riding the index beta. [31]
The caution camp: “returns could disappoint”
Not everyone thinks 2026 will be another smooth up year.
Business Insider reported that GMO (co-founded by Jeremy Grantham) expects negative returns for the S&P 500 in 2026, with GMO’s Ben Inker pointing to the potential underperformance of concentrated, expensive AI-related segments and a rotation toward undervalued areas. [32]
The core debates investors are carrying into 2026
Investopedia laid out the fault lines clearly:
- Can the AI rally last?
BCA Research’s Peter Berezin warned the revenue needed to justify hyperscaler capex is enormous and suggested “these numbers are not sustainable.” [33] - Or is it more like 1998 than 2000?
Capital Group’s Chris Buchbinder argued the setup resembles the late-1990s before the final blow-off, citing big tech earnings keeping pace better than they did during the dot-com era. [34] - Earnings must do the heavy lifting
Investopedia cited FactSet expectations for S&P 500 earnings growth of about 15% next year, which is a high bar—and why valuation sensitivity is increasing. Capital Group economist Darrell Spence cautioned that optimism “doesn’t leave a lot of room for disappointment.” [35]
What this means right now: a practical checklist before Monday
With the regular session closed and the next open approaching, here’s what many long-term investors (and even active traders) typically focus on during a thin, catalyst-light week:
- Know the clock: regular hours are 9:30 a.m.–4:00 p.m. ET for NYSE/Nasdaq; extended-hours rules differ by venue and can be less liquid. [36]
- Treat year-end moves with skepticism: low volume can exaggerate price changes—up or down. [37]
- Watch the calendar: Monday’s housing/trade/manufacturing releases are modest, but the FOMC minutes Tuesday at 2 p.m. ET are the week’s cleanest macro catalyst. [38]
- Respect the rotation: leadership broadening beyond mega-cap tech can change sector performance quickly into January. [39]
- Don’t ignore cross-asset signals: record precious metals alongside soft oil can hint at shifting growth/inflation expectations and hedging behavior. [40]
Bottom line
At 5:03 p.m. ET in New York, the U.S. stock market’s regular session is closed—and it ended the day essentially flat-to-down in thin post-Christmas trading, with the S&P 500 still within striking distance of 7,000 and 2025 gains still firmly intact. [41]
The most important near-term question isn’t what happened today—it’s whether next week’s catalysts (especially Tuesday’s Fed minutes) reinforce the market’s preferred storyline: easing policy, resilient growth, and a broadening rally. If they do, the “Santa rally” narrative may remain intact. If they don’t, thin liquidity could make the reaction sharper than normal.
References
1. apnews.com, 2. www.federalreserve.gov, 3. apnews.com, 4. apnews.com, 5. www.reuters.com, 6. apnews.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.marketwatch.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.federalreserve.gov, 15. www.reuters.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.reuters.com, 19. apnews.com, 20. apnews.com, 21. www.nyse.com, 22. www.nasdaq.com, 23. www.nyse.com, 24. www.newyorkfed.org, 25. www.federalreserve.gov, 26. www.reuters.com, 27. www.investopedia.com, 28. www.reuters.com, 29. www.reuters.com, 30. www.morganstanley.com, 31. www.jpmorgan.com, 32. www.businessinsider.com, 33. www.investopedia.com, 34. www.investopedia.com, 35. www.investopedia.com, 36. www.nyse.com, 37. apnews.com, 38. www.newyorkfed.org, 39. www.reuters.com, 40. www.reuters.com, 41. apnews.com
