Monthly Market Wrap: December 2025
Welcome back to YCharts’ Monthly Market Wrap, your data-driven recap of market trends shaping portfolios and client conversations. In December, markets finished 2025 with diverging performance as investors repositioned portfolios and set expectations for 2026. Delayed economic data began to resume, restoring visibility into labor and inflation trends. Treasury yields showed renewed movement across the curve, while cryptocurrencies remained under pressure. Policy, growth, and inflation dynamics now take center stage as markets enter 2026.
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Market Summary: Financial Sector Leads, Inflation Data Resumes as Rate Cuts Continue in 2025
Markets were split in December as international markets finished 2025 the strongest. Emerging markets led the way, up 3% for the month, as the S&P 500 ended virtually flat. The Russell 2000 posted the worst December of all indices, down 0.6%.
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%.
Jump to Fixed Income Performance
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Off the YCharts! The Volatile Path to a 16.4% Growth Year
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.
Those concerns escalated into early April, when investor anxiety spiked, and the VIX surged above 52. Volatility spiked to such extremes that three of the worst trading days and the single best trading day of the year all occurred within the same week.
- April 3, 2025: down 4.84%
- April 4, 2025: down 5.97%
- April 9, 2025: up 9.52%
- April 10, 2025: down 3.46%
Markets demonstrated how quickly sentiment could reverse, leading to momentum that carried into May, making it the strongest month of the year. 2025 highlights how sharp drawdowns are a natural part of market cycles, even during prolonged periods of substantial capital appreciation.
Visualizing these swings in YCharts helps advisors contextualize volatility for clients and reinforce why staying invested through turbulent periods remains critical to long-term outcomes.
Equity Performance: International Markets Lead, Value Keeps Shining, Utilities and Real Estate Lag
Major Indices
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| Index | 1 Month Total Returns | 3 Month Total Returns | 6 Month Total Returns | 1 Year Total Returns |
|---|---|---|---|---|
| MSCI Emerging Markets | 3.0% | 4.8% | 16.3% | 34.4% |
| MSCI EAFE | 3.0% | 4.9% | 10.0% | 31.9% |
| Dow Jones Industrial Average | 0.9% | 4.0% | 9.9% | 14.9% |
| S&P 500 | 0.1% | 2.7% | 11.0% | 17.9% |
| Russell 1000 | 0.0% | 2.4% | 10.6% | 17.4% |
| Nasdaq Composite | -0.5% | 2.7% | 14.4% | 21.1% |
| Russell 2000 | -0.6% | 2.2% | 14.9% | 12.8% |
Value vs. Growth Performance
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| Ticker | Name | 1 Month Total Returns | 3 Month Total Returns | 6 Month Total Returns | 1 Year Total Returns |
|---|---|---|---|---|---|
| IWD | iShares Russell 1000 Value ETF | 0.7% | 3.8% | 9.3% | 15.7% |
| IWN | iShares Russell 2000 Value ETF | 0.0% | 3.1% | 16.1% | 12.4% |
| IWF | iShares Russell 1000 Growth | -0.6% | 1.1% | 11.7% | 18.3% |
| IWO | iShares Russell 2000 Growth ETF | -1.3% | 1.2% | 13.4% | 12.9% |
US Sector Movement
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| Ticker | Sector | 1 Month Total Returns | 3 Month Total Returns | 6 Month Total Returns | 1 Year Total Returns |
|---|---|---|---|---|---|
| XLF | Financial | 3.1% | 2.0% | 5.3% | 14.9% |
| XLC | Com Svc | 2.3% | -0.2% | 9.2% | 23.1% |
| XLB | Materials | 2.0% | 1.7% | 4.3% | 9.9% |
| XLI | Industrial | 1.3% | 0.9% | 5.9% | 19.3% |
| XLY | Cons Disc Sel Sect SPDR Income ETF | 1.2% | -0.1% | 10.3% | 7.4% |
| XLK | Technology | 0.8% | 2.3% | 14.0% | 24.6% |
| XLE | Energy | -0.3% | 0.9% | 7.2% | 7.9% |
| XLP | Cons Staples | -1.3% | -0.1% | -2.6% | 1.5% |
| XLV | Health Care | -1.4% | 11.7% | 15.9% | 14.5% |
| XLRE | Real Estate | -2.1% | -3.2% | -0.8% | 2.6% |
| XLU | Utilities | -5.1% | -1.4% | 6.0% | 16.0% |
Hot Stocks: Top 10 S&P 500 Performers of December 2025
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| Symbol | Name | 1 Month Price Returns | YTD Price Returns | Industry | Sector |
|---|---|---|---|---|---|
| DG | Dollar General Corp. | 21.3% | 75.1% | Consumer Staples Distribution & Retail | Consumer Staples |
| NCLH | Norwegian Cruise Line Holdings Ltd. | 20.9% | -13.3% | Hotels, Restaurants & Leisure | Consumer Discretionary |
| MU | Micron Technology, Inc. | 20.7% | 239.1% | Semiconductors & Semiconductor Equipment | Information Technology |
| WBD | Warner Bros. Discovery, Inc. | 20.1% | 172.7% | Entertainment | Communication Services |
| MCHP | Microchip Technology, Inc. | 18.9% | 11.1% | Semiconductors & Semiconductor Equipment | Information Technology |
| LUV | Southwest Airlines Co. | 18.7% | 22.9% | Passenger Airlines | Industrials |
| CCL | Carnival Corp. | 18.5% | 22.6% | Hotels, Restaurants & Leisure | Consumer Discretionary |
| FCX | Freeport-McMoRan, Inc. | 18.2% | 33.4% | Metals & Mining | Materials |
| DECK | Deckers Outdoor Corp. | 17.8% | -49.0% | Textiles, Apparel & Luxury Goods | Consumer Discretionary |
| MOH | Molina Healthcare, Inc. | 17.1% | -40.4% | Health Care Providers & Services | Health Care |
Laggards & Losers: 10 Worst S&P 500 Performers of December 2025
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| Symbol | Name | 1 Month Price Returns | YTD Price Returns | Industry | Sector |
|---|---|---|---|---|---|
| LW | Lamb Weston Holdings, Inc. | -29.1% | -37.3% | Food Products | Consumer Staples |
| LEN | Lennar Corp. | -21.7% | -21.6% | Household Durables | Consumer Discretionary |
| COIN | Coinbase Global, Inc. | -17.1% | -8.9% | Capital Markets | Financials |
| PSKY | Paramount Skydance Corp. | -16.4% | 28.1% | Media | Communication Services |
| MPC | Marathon Petroleum Corp. | -16.1% | 16.6% | Oil, Gas & Consumable Fuels | Energy |
| BBY | Best Buy Co., Inc. | -15.6% | -22.0% | Specialty Retail | Consumer Discretionary |
| DDOG | Datadog, Inc. | -15.0% | -4.8% | Software | Information Technology |
| AZO | AutoZone, Inc. | -14.2% | 5.9% | Specialty Retail | Consumer Discretionary |
| AVGO | Broadcom Inc. | -14.1% | 49.3% | Semiconductors & Semiconductor Equipment | Information Technology |
| SMCI | Super Micro Computer, Inc. | -13.5% | -4.0% | Technology Hardware, Storage & Peripherals | Information Technology |
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Economic Data Overview: First Inflation Read Since September, Unemployment Rises, and Gold Keeps Shining
Disclaimer: Certain data in this blog is temporarily unavailable due to the federal government shutdown. For an expanded look at alternative economic indicators available during this period, visit our blog Navigating the 2025 Government Shutdown with YCharts.
Employment
The unemployment rate increased by 0.1 percentage points to 4.6%, and 64,000 jobs were added to the U.S. economy, according to the nonfarm payrolls report. This came in above the Dow Jones estimate of 45,000, marking a second consecutive month of exceeding expectations, following five straight months of missing the estimate.
Consumers and Inflation
The US inflation rate decreased to 2.68% in November, as did core inflation to 2.69%. These are the first readings since September, as October’s data was cancelled.
The CME FedWatch tool indicates just a 16% chance for a fourth consecutive rate cut when the FOMC meets next on January 28th. Despite lacking the full scope of key economic indicators, rates were cut by an additional 25 basis points in December, totaling 75 basis points for the year.
Production and Sales
The US ISM Manufacturing PMI decreased to 48.2 in November, its second consecutive monthly decrease. The Services PMI increased 0.2 points to 52.6 in November. The YoY US Producer Price Index has remained unreleased since September due to the federal shutdown, while the US Retail and Food Services Sales increased by 0.03% in October.
Housing
Existing Home Sales increased by 0.49% MoM in November, and the Median Sales Price of Existing Homes decreased to $409,200. Mortgage rates were largely unchanged in December, ending the month at 5.44% for the 15-year and 6.15% for the 30-year.
While US New Single-Family Home Sales remain unreported, the NAHB Housing Market Index can be used to measure homebuilder confidence, providing an early indication of construction sentiment and future building activity.
Commodities
The price of gold increased by 2.1% this month, and the SPDR Gold Shares ETF (GLD) is currently trading at $396.31 per share. Silver has also posted a fantastic year, up 63.9% heading into December. Oil prices decreased, with Brent crude down 1.5% for the month to $63.10 per barrel. WTI was hit a bit less, down by 1.2% to $57.89.
Cryptocurrencies
Major cryptocurrencies slipped even further in December, with Bitcoin falling 2.7% to $88,414.63 per coin. Ethereum experienced a more modest decline, falling 0.7% to $2,970.06.
Despite a record-breaking summer, both assets finished 2025 with negative returns.
Fixed Income Performance: Insights into Bond ETFs and Treasury Yields
US Treasury Yield Curve
1 Month Treasury Rate: 3.74%
3 Month Treasury Rate: 3.67%
6 Month Treasury Rate: 3.59%
1 Year Treasury Rate: 3.48%
2 Year Treasury Rate: 3.47%
3 Year Treasury Rate: 3.55%
5 Year Treasury Rate: 3.73%
10 Year Treasury Rate: 4.18%
20 Year Treasury Rate: 4.79%
30 Year Treasury Rate: 4.84%
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Bond Fund Performance
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| Ticker | Name | 1 Month Total Returns | 3 Month Total Returns | 6 Month Total Returns | 1 Year Total Returns |
|---|---|---|---|---|---|
| HYG | iShares iBoxx $ High Yield Corporate Bond ETF | 0.5% | 1.2% | 3.4% | 8.6% |
| BIL | State Street SPDR Bloomberg 1-3 Month T-Bill ETF | 0.3% | 1.0% | 2.0% | 4.1% |
| BSV | Vanguard Short-Term Bond Index Fund ETF | 0.2% | 1.2% | 2.5% | 6.0% |
| AGG | iShares Core US Aggregate Bond ETF | -0.3% | 0.9% | 3.0% | 7.2% |
| LQD | iShares iBoxx $ Inv Grade Corporate Bond ETF | -0.7% | 0.3% | 3.2% | 7.9% |
| TLT | iShares 20+ Year Treasury Bond ETF | -2.7% | -1.0% | 1.4% | 4.2% |
As 2026 gets underway, monitor the trends in markets and economic data that will determine how clients perform this year. Download the visual aids directly from YCharts, and contact us for customized access to these charts.
Have a great January! 📈
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