Markets started the week on shaky footing, opening Monday with sharp declines after news of DOJ subpoenas involving the Federal Reserve Chairman. Sentiment quickly improved, however, as bipartisan opposition to political interference at the Fed helped reassure investors. By the end of the session, stocks had recovered and closed higher.
Investors also continued to weigh the outlook for interest rates, particularly whether the Fed will move toward cuts while inflation remains above its long-term target. Adding another layer to market activity was the kickoff of fourth-quarter earnings season, which is expected to provide fresh insight into corporate health and economic momentum.
By week’s end, performance was mixed across major indices. Small-cap stocks led the way, with the Russell 2000 posting the strongest gain, while the Nasdaq 100 experienced the largest decline.
On the fiscal front, the Treasury Department reported that the December budget deficit rose 67% compared to the same month last year. Treasury officials noted that much of the increase was due to timing differences in benefit payments and receipts rather than a fundamental shift in spending trends.
Treasury Yields (higher on the week)
- 30-year Treasury: 4.834%
- 10-year Treasury: 4.200%
Mortgage Rates
- Average 30-year fixed (Freddie Mac): 6.06% (lower)
Commodities & Currency
- Crude oil: $59.39 per barrel (higher)
- Natural gas: $2.701 (higher)
- U.S. dollar index: 99.34 (higher)
- Gold: $4,589.00 per ounce (higher)
China reported a record global trade surplus of $1.2TN in 2025 despite U.S. tariffs. China has focused on markets other than the U.S. for export growth.
Federal Reserve (December and 2025)
- Industrial Production +0.4%, +2.0%
- Manufacturing +0.2%, +2.0%
- Mining (Including oil and gas) -0.7%, +1.7%
- Utilities +2.6%, +2.3%
National Association of Realtors (December and 2025)
- Existing home sales +5.1%, 1.4%
- Inventory of Unsold Homes -18.1%, 3.5%
- December median sales price $405,400, +0.4% 2025
Treasury Department December Statement
- Receipts $484BN
- Outlays $629BN
- Deficit $145BN
- Fiscal YTD Deficit $602BN (since October 1st)
Source: U.S. Treasury
Commerce Department
New Home Sales – October
- -0.1% Month
- +18.7% from last October
Retail Sales – November (not adjusted for inflation)
- +0.6% and 3.3% year over year.
Labor Department
Consumer Price Index (December)
- December +0.3%
- Food +0.7%
- Energy +0.3%
- Utility (piped) gas service +4.4%
- Used cars and trucks -1.1%.
- Past 12 months +2.7%, same as November.
- Excluding volatile food and energy +0.2% December and 2.6% 2025.
Producer Price Index (December)
- +0.2% and 3.0% year over year
- Goods +0.9%
- Services 0.00%
- Excluding volatile food, energy and trade services +0.2%
Source: U.S. Department of Labor
Import Prices (Does not include tariffs)
- +0.4% (October/November)
- +0.1% (1 year)
Export Prices
- +0.5% (October/November)
- +3.3% (1 year)
Jobless Claims (prior week)
- New Claims 198,000 (lower)
- 4-week Moving Average 208,000 (lower)
- Total Claims 1,884,000 (lower)
Energy & Industry Data
Energy Information Administration
- Weekly Oil Production 13.753million barrels. (decrease)
- Natural Gas Storage – 71 billion CuFt and is above the average level for this time of year.
Baker Hughes Rig Count
- Oil rigs: +1 to 410
- Gas rigs: -2 to 122
Q4 Corporate Earnings
- With 7% of S&P 500 companies reporting the blended earnings growth rate year over year is 8.2%.
If you have questions about the markets or your financial plan, we’re always here to help.
Loren Rex – Emeritus
Erik A Smith, AIF® – President & C.E.O.
Nicholas Acri, CFP® – Partner & Wealth Advisor
Dylan Thomas, CFP® – Partner & Wealth Advisor
Jack Zeeb – Wealth Advisor
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).
Sources:
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
https://ir.eia.gov/ngs/ngs.html
https://www.freddiemac.com/pmms
https://www.wsj.com/market-data?mod=nav_top_subsection
https://bakerhughesrigcount.gcs-web.com/na-rig-count
https://www.census.gov/economic-indicators
