Before traders and investors could put a bow on 2025, the overhang of the last Federal Reserve meeting of the year had to be addressed. That was accomplished last week, and it helped set the path to the end of the year and position things for beginning of 2026- at least until everything gets tossed around with a new Fed chair. The Fed cut rates as expected. Equities rallied post-meeting and the day after, but sold off on Friday. With the Fed out of the way, we turned to the "return" of key economic data this week in the CPI. But the lack of content in the report led investors to highly discount the decline in inflation it registered. We then moved to the big options expiration and index rebalances to close the week. The S&P reclaimed key moving averages in getting back above 6800. The market-weight index finished slightly positive, while the equal-weight was down modestly. Small caps flipped from last week as the Russell finished down 1% despite a rally on Friday. Overall, equities closed with a solid performance on Friday's opex, which saw about three billion shares trade in the closing auction.

Fittingly as we approach Christmas, Consumer Discretionary was the best performing sector this week, led by the Travel and Leisure group. Healthcare was another leader with biopharma mostly higher while Med Tech and managed care traded mixed. Materials was also higher. Mining names rose as metals continued their run higher. On the other hand, Energy was down about 3% with oil trading lower. Consumer Staples lagged on weakness in beverage names and mixed performance from the giant retailers. Tech needed a sharp gain on Friday, led by semis, to get into the green.

As we close out the year, watch out for the Santa Claus rally (or lack thereof)- the last 5 trading days of this year and the first two days next year. Economic data in the US for anyone who’s watching will include the 2nd estimate for Q3 GDP, Industrial Production, New and Existing Home Sales, weekly jobless claims and the weekly ADP employment report, as well as the minutes from the latest FOMC meeting. The Supreme Court’s ruling on the legality of the administration’s tariffs could potentially come before year-end, as can President Trump’s nomination of a new Fed Chair. And of course, there’s Christmas and New Years!