Equity markets ended December with modest volatility and mixed performance. The S&P 500 Index declined slightly by 0.05%, while global equities posted moderate gains, with the MSCI World Index rising 0.73%. Value-oriented equities generally outperformed growth, as investors continued to rotate away from higher-multiple technology stocks. The NASDAQ 100 fell 0.73%, reflecting ongoing weakness in AI-related and large-cap technology names. Precious metals emerged as one of the strongest-performing segments during the month, while energy and technology were among the weakest sectors.
Economic conditions softened further. Overall activity was largely stagnant or slightly declining, with consumer spending weakening—particularly in non-luxury categories—while higher-end retail spending remained comparatively resilient. Manufacturing activity increased modestly despite continued tariff-related pressures on input costs. Labor market conditions weakened slightly, as employment declined and firms increasingly relied on hiring freezes and attrition rather than layoffs. Housing market performance was mixed, with several regions reporting declines in residential construction.
Monetary policy became more accommodative as the Federal Reserve lowered the federal funds rate target range to 3.50%–3.75%. Policymakers cited elevated economic uncertainty and continued to monitor inflation, growth, and labor market indicators closely. Overall, December reflected a cautious market environment marked by slowing growth, persistent uncertainty, and selective areas of resilience, underscoring the importance of disciplined positioning and long-term perspective amid ongoing volatility.
