This week’s 7 Market Movers brings us updates from the Federal Reserve as they wrapped up their final meeting of 2025. Aya Yoshioka breaks down the latest rate cut and why both policymakers and markets are still navigating a “data fog” after months of delayed economic reports. Aya also covers fresh signals from the labor market, shifting Treasury yields, and the slow resurgence of a dot-com era heavyweight.

Watch the full video here:

TRANSCRIPT:

My name is Aya Yoshioka, Portfolio Consulting Director and Senior Investment Strategist here at Wealth Enhancement. Welcome to another edition of 7 Market Movers, where we cover a variety of topics that impact markets. So let's get started. Well, this week was Fed Week, and it's always a big market mover when we hear from our central bank. And it was the last meeting of 2025. The FOMC delivered its third 25-basis point rate cut of the year, but the vote was not unanimous, and we had three dissenters on this vote. 

The Fed also guided to one additional rate cut for 2026, at least that's what was communicated through their dot plot. But the market's still pricing in about 2 rate cuts, just given the overall macro backdrop. During the press conference, Chairman Powell noted that the economy had made good progress on non tariff related inflation, but that it wouldn't hurt to wait and see if there might still be some lingering impacts in the early months of 2026. He noted that he felt that the labor market had cooled a bit faster than they had expected. 

But remember, everybody's been in a bit of a data fog just given the government shutdown that lasted a lot longer than everybody had anticipated. So everybody's flying a bit blind when it comes to economic data. However, on point today, we received data on unemployment claims or initial jobless claims. And that showed that 236,000 people filed for jobless claims or claiming unemployment. And that was a bit higher than the 220,000 that economists had expected. There are job openings and those have actually risen. We saw this week on Tuesday that the JOLTS report or the Job Openings and Labor Turnover Survey showed that job openings were around 7.7 million, steady from last year's level and up slightly from the 7.2 million that we saw back in March. 

The Fed wasn't done just with the cut. They also announced that they will be buying treasury bills. And this is not a restart of quantitative easing, but they said that they would be buying treasury bills in order to maintain ample reserves, aiming to support liquidity in the bond market. So the bond market reacted to all of this with bond yields drifting lower. 

Overall, we've seen a slight steepening in the yield curve as the two year treasury yield was at 3.62% prior to the meeting, and it drifted down about 10 basis points to 3.52% percent. The 10-year on the other hand was at 4.2% before the Fed meeting and drifted down about 6-basis points to 4.14%. US equity markets on the other hand are still hovering near all time highs that were set back in October. We've had some strong returns in equity markets with the S&P 500 up nearly 17% on a year to date basis. 

This week, we had a few earnings reports, a little few stragglers. Earnings season has been concluded for quite some time, but there are a few that are on different fiscal, years. And those were Oracle, Costco, and Broadcom. Oracle results missed expectations, and the stock has really pulled back pretty significantly from its September highs as investors remain concerned about their spending trajectory and the duration of negative free cash flow. Meanwhile, Broadcom and Costco beat street estimates and were trending higher, at least in the aftermarket this afternoon. 

Lastly, an interesting fact crossed my desk. We know that AI has been in hot debate and there's a lot of bubble talk relating back to the dot com era and the bubble bursting from the internet in 2000. Well, a little factoid, Cisco, poster child of the dot com era, actually closed at a record high on Wednesday, December 10th, finally closing above its March 2000. Wow. 

In another tale of two narratives, commodities have seen areas of strength in precious metals such as gold. We all have seen the strong rise in gold up over 60% this year. But crude oil has languished, as oversupply concerns remain an issue. Lower crude prices have helped consumers battle inflation, and the higher price of gold really reflects that inflation remains a concern for many consumers. 

As we close out 2025, markets have really been resilient. And despite tariff issues, a government shutdown, AI bubble debates, and more, we have witnessed really strong returns in equity markets, not just here in the US, but across the globe, with international markets and emerging markets up substantially as well. 

We encourage investors to stay disciplined with their financial plan, favoring diversification over precision timing as we all think about how we should be positioned going into 2026. If you would like to discuss your portfolio, please reach out to your financial advisor here at Wealth Enhancement, and we'd be happy to discuss markets with you. 

Until next time, I wish you all the very happiest of holidays and the best in 2026. Thanks so much.

This information is not intended as a recommendation. The opinions are subject to change at any time and no forecasts can be guaranteed. Investment decisions should always be made based on an investor's specific circumstances. Investing involves risk, including possible loss of principal. 

There is no guarantee that asset allocation or diversification will enhance overall returns, outperform a non-diversified portfolio, nor ensure a profit or protect against a loss.

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