Weekly Economic Update – 12/22/2025

The Week on Wall Street

Stocks posted a slight gain last week as mixed jobs data triggered some selling pressure before a cooling inflation report helped stocks recover.

The Standard & Poor’s 500 Index inched ahead 0.10 percent, while the Nasdaq Composite Index advanced 0.48 percent. The Dow Jones Industrial Average slipped 0.67 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 0.21 percent.1,2

Round Trip for Stocks

A mixed jobs report on Tuesday created some concerns about the economy, leading the S&P 500 and Dow Industrials to modest declines. However, the tech-heavy Nasdaq posted a modest gain.3,4

Stocks continued their retreat on Wednesday with a handful of AI-related names leading the decline.5

Markets then staged a rebound as a fresh inflation report came in cooler than expected for November, raising investor hopes that interest rates may trend lower. The S&P 500 and Dow Industrials broke four-day losing streaks, while the Nasdaq rebounded 1.4 percent on Thursday alone.6

Megacap tech stocks rebounded on the last trading day of the week, lifting the broader market. Investors appeared to look past a disappointing report on consumer sentiment.7

The Push & Pull of Jobs & Inflation

The Bureau of Labor Statistics combined its October and November employment data into one report. However, the October report only contained partial data due to the shutdown, while the November numbers reflected full data.

While November saw an unexpected increase (+64,000 versus economist expectations of +45,000), the October report showed employers cut 105,000 jobs. The unemployment rate ticked up to 4.6 percent.8

The Consumer Price Index’s (CPI) 2.7 percent year-over-year pace for November was slower than the 3.1 percent economists expected, and slower than September’s 3.0 percent pace. Market gains were tempered, however, as economists cautioned that shutdown-related gaps may have influenced some of the data.9

Weekly Riddle

It has a thumb and four fingers, but isn’t alive. What could it be?

Last Week’s Riddle: It usually loses a head by noon, but that same head often returns by midnight. What is it?

Answer: A pillow.

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
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