Market Insights Summary - Edward Jones
Daily Market Snapshot (December 26, 2025)
U.S. equity markets experienced little change amid thin trading volumes at the end of a holiday-shortened week. The S&P 500 finished just below its record high, while the Nasdaq index remained broadly unchanged. The Russell 2000 small-cap index saw a slight decline of 0.5%. This stability follows a positive trend in U.S. equity markets, with investors anticipating a potential "Santa Claus" rally as the year concludes.
International equity markets were similarly quiet, with many exchanges in Australia, Hong Kong, and Europe closed for the holidays. Shorter-dated U.S. government bonds rallied, with the yield on the 2-year Treasury note decreasing by 2 basis points, while the 10-year note remained flat at 4.13%. Gold and silver prices continued to rise, supported by geopolitical tensions and a weaker dollar, with gold on track for its best annual performance since 1979.
Oil Prices and Geopolitical Reactions
Recent U.S. military strikes in Nigeria against Islamic State targets have influenced oil prices, which were initially set for their largest weekly gain since late October. However, optimism regarding a potential peace agreement in Ukraine and easing Russian oil sanctions led to a decline in prices, settling at $57 per barrel. Current oil prices are providing some relief to U.S. consumers facing inflation rates above the Federal Reserve's 2% target for nearly five years. The VIX index, indicating expected volatility, is trading near a low for 2025, suggesting that markets are not overly concerned about late-year geopolitical developments.
Investment Performance in 2025
The year 2025 has been favorable for diversified investors, with both global equity and bond markets yielding positive returns. International stocks, particularly the MSCI AC World ex US Index, have surged over 30%, marking the strongest annual gain since 2009. Domestically, the S&P 500 has achieved 39 new all-time highs and is on track for a third consecutive year of gains exceeding 15%. In fixed income, credit-sensitive assets like U.S. high-yield bonds and emerging-market debt have outperformed, each up more than 8%. U.S. investment-grade bonds are also expected to deliver solid returns, with gains projected above 7%. This performance highlights the importance of maintaining a well-diversified portfolio aligned with individual financial goals.
Looking ahead, expectations for 2026 remain optimistic for equities, with further insights available in the upcoming 2026 outlook.