Friday, December 26, 2025
It was last week when President Trump signed an executive order to declare both Wednesday, December 24th (Christmas Eve) and today federal holidays, giving a five-day weekend to federal employees, while the stock market remained open for a half-day Wednesday and a full session today.
Pre-market activity is flat today on very low volume, quite as expected. The past five trading days have been favorable among the major indexes, between +1.5% (Russell 2000) and +2.4% (Nasdaq). Year to date, in order of success, the Nasdaq is +22% — above +20% for the third straight year (with four trading days left in 2025) — the S&P 500 +17.6%, the blue-chip Dow +14.3% and the small-cap Russell 2000 +13.8%.
Because it is a federal holiday today, we won’t see new economic data from the U.S. government. But this is a quiet time of year for such activity anyway; we do have a few reports scheduled for next week, but we’re also looking at a shortened trading week with next Thursday closed for New Year’s Day. New Year’s Eve, however, is slated for a full session — at least for now.
What to Expect from the Market Next Week
We expect holiday trading volume to remain at low levels next week, though we will see a few key data points. These include a new Case-Shiller Home Price Index for October (not due to the government shutdown; Case-Shiller numbers are always a couple months in arrears) and Pending Home Sales for November. Wednesday will bring us Weekly Jobless Claims a day early, same as this week.
Next Tuesday, the official minutes from the December Federal Open Market Committee (FOMC) report will come out, allowing analysts to closer parse the discussions regarding the -25 basis-point (bps) cut which brought the Fed funds rate to a range of 3.50-3.75% for the first time in three years. We saw three dissents, in opposite directions: Fed Governor Stephen Miran voted for a -50 bps cut, while Fed Presidents Goolsbee (Chicago) and Schmid (Kansas City) voted for no change to interest rates.
Currently, the odds of another interest rate cut in late January are quite low. Economic reports following the government shutdown have been delayed and/or incomplete — for one example, in last week’s Consumer Price Index (CPI) report, it registered Owners Equivalent Rent from October to November as 0. That will likely be revised higher, which may have an impact on the initial +2.7% Inflation Rate reported. Thus, a majority of Fed members will likely wait for more data to arrive before moving rates lower.
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