On Monday, pending home sale data was made public, and over the past month, there was an increase of 3.3 percent in those sales. This may be due to mortgage rates falling to levels not seen in recent years, which has caused buyers to pounce while they have a chance to keep their payments at an affordable level. There has also been a slowdown in home price increases in several parts of the country, which had created more flexibility in the market.
An increase in home sales is a good sign for the economy because it generally means a series of additional consumer purchases are on the way. For instance, a homeowner will likely buy furniture, appliances or materials to upgrade their property. This can also be good news for contractors and other service providers who help maintain or improve homes.
On Tuesday, the main event of the week came in the form of the FOMC meeting minutes for December. During that meeting, the Federal Reserve decided to cut interest rates by 25 basis points, and the minutes from that gathering show that there are likely to be more cuts in the future. However, the minutes also showed that voting members were torn as to how many cuts should occur and when they may take place.
This is partially because there are two schools of thought as it relates to inflation caused by our current tariff policy. There are also questions about the quality of the data that is being distributed as impacts are still being felt from the government shutdown in late 2025.
Fortunately, there was no question about the accuracy of the final weekly unemployment claims for 2025. The last week of December saw 199,000 requests for benefits, which was about 20,000 fewer than expected and about 15,000 fewer than reported last week.
Trading was relatively slow this week, but the markets were open and did make some moves over the final days of 2025. The S&P 500 was down 0.72 percent to finish the week at 6,858. For the week, the index made a high of 6,911 on Monday morning and a low of 6,858 on Friday.
The Dow was down about 0.6 percent this week, which was a loss of 290 points. This week, the index made a high of 48,640 on the open of Monday’s session and a low of 47,917 on Friday morning.
Finally, the Nasdaq was down 1.55 percent this week to finish at 25,206, which was a loss of 397 points. Over the last five trading days, the index opened the week at its high of 25,590 and made a low of 25,109 on Friday.
Next week will be a jobs report Friday as the Bureau of Labor Statistics (BLS) announces the employment figures for December. The ADP version of this report will come out on Wednesday. The BLS projects that the economy added 57,000 jobs in the final month of 2025. The University of Michigan will be releasing consumer sentiment and inflation expectation data on Friday as well. Finally, the ISM Manufacturing PMI and ISM Services PMI will also be released next week.