U.S. equities are heading into the final stretch of 2025 with strong momentum. The S&P 500 is up nearly 18% YTD and sits just ~1% away from the historic 7,000 mark, after posting a fresh record close before Christmas. If December ends higher, it would mark the index’s 8th consecutive monthly gain — the longest streak since 2017–2018.
🔹 Key drivers
- Fed has cut rates 75 bps in 2025, now at 3.50%–3.75%
- Markets are focused on how many cuts come in 2026
- Fed meeting minutes next week may clarify internal policy debates
- Rotation underway: money flowing from mega-cap tech into financials, healthcare, transports, and small caps
🔹 Market snapshot
- Nasdaq: +22% YTD
- Tech sector: down >3% since early November
- Non-tech sectors: showing renewed strength as valuations normalize
Bottom line: With rate-cut expectations, solid economic resilience, and sector rotation supporting breadth, investors are positioning for a constructive year-end — and potentially a strong setup heading into 2026.