December 2025 Market Outlook, The Historic Government Shutdown Is Still Haunting Stock Markets
- Stock futures opened flat as investors await a backlog of key economic data delayed by the recent 43-day government shutdown.
- OPEC+ confirmed a production hike pause for Q1 2026 which immediately pushed US crude oil futures up 1.6% to $59.
- November ended with the S&P 500 and Dow extending winning streaks while the Nasdaq rallied late to trim deeper mid-month losses.
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| Photo by Jon Tyson on Unsplash |
Wall Street is bracing for a hectic start to the final month of 2025. Stock futures remained largely flat on Sunday evening as traders prepared for a week defined by a deluge of economic reports. These critical data points were backlogged during the historic 43-day government shutdown that finally ended in mid-November. Investors are now flying blind no longer but they face a sudden influx of information that could dictate the market's trajectory into 2026.
The trading session kicked off with a whisper rather than a shout. Dow Jones Industrial Average and S&P 500 futures dipped a marginal 0.1% shortly after electronic trading began. Nasdaq Composite futures held steady. This caution is understandable given the volatility we witnessed in early November before the late-month rally took hold. The market is currently pricing in an aggressive 87% chance of a Federal Reserve rate cut at the upcoming December 9-10 meeting. That optimism has been the primary fuel for the recent recovery.
Energy markets provided the first real spark of the week following a major announcement from OPEC+. The cartel and its allies confirmed a pause on planned production hikes for the first quarter of 2026. This decision effectively keeps supply tight in the face of projected weaker seasonal demand. The move was widely interpreted as a defensive play to put a floor under crude prices. West Texas Intermediate futures responded immediately by climbing 1.6% to trade near $59 a barrel.
The economic calendar this week is unusually packed due to the "data dump" effect from the shutdown. The Bureau of Economic Analysis is finally set to release delayed export and import price data for September on Wednesday. This will be followed closely by the ADP National Employment Report for November. Friday brings the heavy hitters with the Bureau of Labor Statistics releasing the September Personal Consumption Expenditures (PCE) price index and the University of Michigan unveiling its preliminary Consumer Sentiment Index for December.
November proved to be a resilient month for equities despite the political chaos in Washington. The Dow Jones Industrial Average clawed back losses to finish up 0.3% for the month. This marked its seventh consecutive month of gains and its longest winning streak since early 2018. The S&P 500 mirrored this resilience with a 0.1% monthly gain. It has now successfully navigated seven straight months of positive returns.
The tech-heavy Nasdaq Composite tells a slightly different story. It snapped its own seven-month winning streak by finishing November down 1.5%. However this headline figure masks a dramatic intramonth turnaround. The index had been down as much as 7% before the "AI trade" reignited. Heavyweights like Alphabet and Broadcom rallied late in the month to pull the index back from the brink. The sector remains sensitive to interest rate expectations and the broader economic health of the consumer.
Retail performance remains the final variable in this year-end equation. Early Black Friday numbers were mixed and the SPDR S&P Retail ETF slipped 0.1% to close out the week. Investors are watching closely to see if the American consumer has enough firepower to sustain spending through the holiday season. A strong December for stocks is historically common but this year it hinges entirely on whether the incoming flood of economic data confirms that the economy successfully weathered the government shutdown storm.