Market Insights Summary - Edward Jones
Daily Market Snapshot (Published Dec. 22, 2025)
The holiday-shortened week began positively, with stocks gaining ground, particularly in small-cap and value-style investments, as optimism for a year-end rally builds. Trading volumes are expected to be lighter due to early market closures for Christmas. Positive sentiment in the tech sector was bolstered by Micron's strong earnings and reports of improving margins in OpenAI's products. However, cyclical sectors like financials, energy, and materials outperformed by the end of the day.
In commodities, oil prices rose approximately 2.5% to around $58, influenced by geopolitical tensions following the U.S. blockade on Venezuela. Precious metals also saw significant gains, with gold and silver reaching record highs and on track for their best annual performance since 1979.
Tech Sector Outlook
Since early November, there has been a shift away from large-cap technology stocks that previously led the market. However, recent sentiment has improved, with the S&P 500 tech sector recovering its December losses. AI is expected to remain a long-term growth driver, although concerns about spending and rising debt may arise periodically. Looking ahead to 2026, a broader market expansion is anticipated across various sectors, supported by solid earnings growth.
Portfolio Recommendations for 2026
As we approach the new year, the market environment suggests a slightly looser Federal Reserve policy, modest fiscal stimulus from a new tax bill, and steady economic growth. Here are four recommended actions for investors:
- Maintain exposure to innovation and AI while diversifying risk.
- Expand investment opportunities to include mid-caps, cyclicals, and international equities.
- Utilize bonds for attractive income and portfolio stability.
- Review cash allocations as yields decline with potential Fed rate cuts.