Into the Home Stretch of 2025
December 1, 2025
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We hope you had a wonderful Thanksgiving holiday with family and friends. Risk markets broadly closed November on solid ground Friday, following a mid-month sell-off driven by persistent inflation concerns, uncertainty over the Federal Reserve’s (Fed) next move and tech valuations.1 The government shutdown, which ended on Nov. 12, seemingly had little effect on markets. Meanwhile, the Chicago Board Options Exchange Volatility Index (VIX) retreated from an elevated level of over 26 to 16 by month’s end, and Treasuries rallied with the 10-year note yield down almost 15 basis points to 4.01%.2,3 U.S. investment-grade and high-yield corporate credit market spreads also traded better into month end, remaining near multi-decade tight levels.4
December is opening on a somewhat cautious note. Hawkish comments from the Bank of Japan and Bitcoin’s drop below $86,000 initially led the S&P 500 Index lower, with tech names leading the way.5
Corporate credit markets are also slightly weaker at the open but appear positioned for spreads to slowly grind tighter into year-end, despite lofty levels as the primary calendar hits a seasonal slowdown. Investors, however, will be closely watching for any sign of increased clarity regarding the Fed’s rate action next week. The market is currently pricing in greater than an 80% chance of a rate cut.6 The Federal Open Market Committee participants are now in their blackout period; therefore, any market expectations on rate action will be primarily driven by economic data. While jobless claims and employment data will draw attention this week, the most anticipated release is likely the Personal Consumption Expenditures (PCE) Index, a commonly referenced measure for the Fed.7 This may also provide insight on the state of the consumer and whether their resilience is likely to continue. The coming weeks could certainly set the tone for risk markets into the close of 2025.
Sources:
1,6CNBC – Nasdaq closes higher, but notches losing month despite Thanksgiving week rally; 11/28/25
2-4Bloomberg
5Yahoo! Finance – Bitcoin Plunges to Below $85,000 in Risk-Off Start to December; 12/1/25
7MarketWatch – U.S. Economic Calendar; as of 12/1/25
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