S&P 500 Sets New Record High on Christmas Eve Before Retreating to End 2025 Up 16% on the Year

S&P 500 (Index: SPX) investors enjoyed a relatively quiet, nearly news free two weeks to end 2025. The index set a new record high of 6,932.05 just before the Christmas Day holiday, before retreating 1.2% in the next week on little-to-no significant market-moving news to close out 2025 at 6,845.50. On 2026′s first day of trading, the index rose to 6,858.47, just 1.1% below its 24 December 2025 record high close, as investors started the year with little-to-no market moving news that could meaningfully alter their outlooks for the year-to-come.

And, we might add, no indication of any impending geopolitical event with the potential to reshape expectations for a global industry.

Which is to say it is quite possible we’ll be starting the first full trading week of 2026 with a bang. Since that will be a story we cover in the next edition of the S&P 500 chaos series, let’s close out 2025 properly with the final update to the alternative futures chart for 2025-Q4.

Through Friday, 2 January 2026, we find the S&P 500′s is tracking along in the middle of the new redzone forecast range we added to the chart a week earlier, which assumes investors are focusing their forward-looking attention on the current quarter of 2026-Q1.

The thing to pay attention to in the week ahead is how the expectations for oil prices change as a consequence to the weekend’s geopolitical event. To help set that stage, here are the market-moving headlines that were setting investor expectations during the past two holiday-shortened trading weeks.

Monday, 22 December 2025

• Signs and portents for the U.S. economy:

• Oil settles higher on risk of disruptions to Venezuela, Russia supply
• Oil price gains after US interception of oil tanker off the coast of Venezuela over weekend

Fed minion sees continuing their policy targeting 3% inflation as reason to hold rates steady, another minion talks about sticking around after term ends until replaced:

• Fed’s Hammack sees inflation near 3% as case for holding rates, WSJ reports
• Fed’s Miran says he will likely stay after term ends until his seat is filled

Bigger stimulus not developing in China:

• China leaves benchmark lending rates unchanged for seventh straight month

BOJ minions / Bigger trouble developing in Japan:

• BOJ to raise interest rates to 1.5% under Ueda, ex-central bank policymaker says

Germany’s automotive exports plunged in 2025:

• German auto exports hit hard by Trump tariffs, study shows
• German exports in machinery and autos/parts to China have declined strongly

• The China shock hits Germany
• Why Germany Wants a Divorce With China

Wall Street finished higher to kick off the holiday shortened trading week

• Wall Street advances with broad gains, tech gains continue

Tuesday, 23 December 2025

• Signs and portents for the U.S. economy:

• Q3 U.S. GDP climbs 4.3%, past consensus, in BEA’s delayed initial estimate

• US economic growth accelerates in third quarter
• Robust consumer spending, rising exports fuel US economic growth in third quarter
• Q3 GDP Unexpectedly Surges To 2 Year High On Soaring Health Insurance Spending

Oil steadies as market weighs geopolitical risks against bearish fundamentals

Copper price hits record high on concerns over tariffs and shortages

Fed minions may ditch 2% inflation goal they haven’t met in years:

• Bessent signals openness to revisiting Fed’s 2% inflation goal

Bigger AI developing in China:

• Global investors turn to Chinese AI as Wall Street fears bubble

Bigger trouble developing in Japan, BOJ thinking about hiking rates sooner than expected:

• Japan’s fiscal woes may cause more yen falls, yield rises, says ex-BOJ policymaker

• Japan issues sternest intervention warning, says yen deviating from fundamentals

BOJ’s hawkish wink suggests next hike may be sooner than markets think

S&P 500 notched a record close as Wall Street ended higher after GDP data

• S&P registers record close as growth stocks advance
• Surprise asset of the year? The 30-year US Treasury bond

Wednesday, 24 December 2025

• Signs and portents for the U.S. economy:

• Oil steady on US data, geopolitical tension

Bigger trouble, stimulus developing in China:

• China’s farmers are up to their ears in milk
• Chinese capital Beijing further eases home buying curbs
• China widens foreign investment incentive list to stem falling inflows

BOJ minions maybe not so sure about rate hike plans:

• BOJ debated need to keep raising rates, October meeting minutes show

Dow and S&P 500 closed at record highs on Christmas Eve

• S&P 500, Dow hit all-time closing highs; gold, silver touch records
• AI spending, strong corporate profits, Fed rate cuts seen as key to 2026 stock market

Friday, 26 December 2025

• Signs and portents for the U.S. economy:

• Oil falls 2% on looming supply glut, hopes of Ukraine peace deal
• Copper Hits Record in China, Jumps in New York on Supply Concern

BOJ’s chief minion wants higher interest rates, bigger troubles with fiscal policy developing in Japan:

• BOJ chief sees progress in hitting price goal, signals further hikes
• Japan proposes record budget spending while curbing fresh debt

Wall Street halts five-day advance as precious metals grab the spotlight

• Wall St ends close to all-time highs in light, post-holiday session
• Silver crosses $77 mark while gold, platinum stretch record highs

• How silver is traded, from stocks and shares to coins and bars

Monday, 29 December 2025

• Signs and portents for the U.S. economy:

• US pending home sales surge to highest in nearly 3 years in November, NAR says
• US economy to ride tax cut tailwind but faces risks

• Americans in line for ‘gigantic’ tax refund early next year, says Scott Bessent

Oil settles up over 2% on dented peace hopes in Ukraine, tensions in Yemen

Bigger trouble, stimulus developing in China:

• China’s industrial profits tumble at fastest pace in over a year
• China’s finance ministry says fiscal policies will be more ‘proactive’ in 2026

BOJ minions watching yen, markets watching BOJ minions:

• BOJ debated need for more rate hikes even after December move, summary shows

• Yen strengthens after BOJ minutes, markets still eye intervention odds
• Rising Japanese Rates Are Creating New Risks For Global Markets

U.S. stocks end lower to start the New Year’s shortened week

• US stocks end down as tech shares drop ahead of New Year

Tuesday, 30 December 2025

• Signs and portents for the U.S. economy:

• Oil prices steady as Russia-Ukraine peace hopes fade, Yemen tensions rise

Fed minions thinking more rate cuts, QE-like policies ahead:

• Fed policymakers judged ‘ample’ levels of reserves warranted bill-buying, minutes show

• Fed officials showed deep divisions at December meeting, minutes show

Bigger trouble, stimulus developing in China:

• Exclusive: China mandates 50% domestic equipment rule for chipmakers

Wall Street stretches tech-led sell-off into the last days of the year

• S&P 500, Nasdaq end slightly down in holiday-thin trade, Meta gains on deal
• Wall Street closes slightly lower near the end of a banner year; gold rebounds

Wednesday, 31 December 2025

• Signs and portents for the U.S. economy:

• Oil posts biggest annual decline since 2020; Brent seen near $55 in the near term

Bigger stimulus developing in China:

• China’s Xi promises more proactive macro policies in 2026

• China approves major projects and investment plans for 2026 totalling $42 billion
• China allocates initial $8.9 billion for consumer goods trade-in scheme in 2026

China’s factory activity edges back to growth in December, private PMI shows

• China’s factory activity rebounds thanks to festive stockpiling

China imposes curbs on beef imports to protect domestic industry

• China to impose additional tariffs of 55% on some beef imports from 2026

BOJ minions look back at their success in hiking Japan’s interest rates:

• Benchmark Japan bond yields extend steepest annual surge since 1994

S&P 500 finishes with 16% gain in 2025

• Wall Street ends year’s final session lower but posts big annual gains for 2025

Friday, 2 January 2026

• Signs and portents for the U.S. economy:

• Oil prices settle lower after biggest annual loss since 2020
• US draws bulk of state-owned investment in 2025 as assets hit record $60 trillion

Bigger trouble, stimulus developing in China:

• China taxes condoms, contraceptive drugs in bid to spur birth rate

Bigger trouble developing in Japan:

• Japan business lobby chiefs urge government to tackle weak yen, media reports

Bigger trouble developing in Eurozone:

• European factory activity ends 2025 in deeper contraction

• German exporters face prolonged slump in key U.S., China markets

Nasdaq falls flat, U.S. stocks battle to recover from tech sell-off to kick off 2026

• Dow closes higher on first day of 2026, still no Santa Claus rally

The CME Group’s FedWatch Tool continues to anticipate additional quarter point rate cuts on 18 March (2026-Q1) and 29 July (2026-Q3), with no other rate cuts projected in 2026.

The Atlanta Fed’s GDPNow tool‘s first estimate of real GDP growth in the U.S. during 2025-Q4 is +3.0%. Meanwhile, the BEA’s first official estimate of GDP in the preceding quarter of 2025-Q3 came in at 4.3%, much higher than the GDPNow tool’s final projection of +3.5% growth for that long since ended quarter.

Image credit: Microsoft Copilot Designer. Prompt: “An editorial cartoon of a Wall Street bull and bear watching the New Year’s Eve ball drop to start 2026 and screaming with fear”.