Closing Recap 

U.S. stocks finished lower for a third straight day on Tuesday as the market digested minutes from the Federal Reserve’s December meeting, which revealed a more divided and cautious committee than investors had hoped. The S&P 500 and Dow both slipped in a low-volume session, with the market lacking a clear catalyst as it heads into the final days of the year. The minutes showed several participants were concerned about entrenched inflation and favored pausing the rate-cut cycle, a hawkish tilt that weighed on sentiment and provided a modest lift to the U.S. dollar. A rotation was evident, with defensive sectors like Energy and Utilities outperforming, while growth-oriented sectors like Technology and Consumer Discretionary lagged. 

Key Takeaways 

• S&P 500 Falls for 3rd Straight Day: U.S. stocks continued their year-end slide, with the S&P 500 posting its third consecutive loss as hawkish-leaning Fed minutes soured the mood. 
• Hawkish Fed Minutes Spook Markets: The December FOMC minutes revealed growing divisions, with several members concerned about inflation and favoring a pause on rate cuts, pushing back against the market’s dovish expectations. 
• Defensive Rotation Continues: The market saw another day of defensive rotation, with value outperforming growth as investors favored sectors like Energy and Utilities over Technology and Discretionary. 
• Fed Minutes Reinforce “Hawkish Pause”: The FOMC’s December meeting minutes revealed deep divisions, with “several participants” concerned about inflation, reinforcing Chair Powell’s cautious tone and tempering hopes for aggressive rate cuts in early 2026. 
• Dollar Firms as Fed Cut Bets Ease: The U.S. Dollar is firming, with the DXY index climbing back towards 98.50 as the market continues to pare back expectations for near-term rate cuts following the hawkish-leaning Fed minutes.
•  Gold and Silver See Massive Year-End Profit-Taking: The historic rallies in precious metals have hit a wall of profit-taking. Gold has pulled back sharply, and Silver has also seen a brutal reversal, with the CME Group hiking margin requirements for a second time to curb speculation. 
• A Rollercoaster End to a Record Year for Metals: Despite the sharp correction, Gold and Silver are closing out 2025 with their best annual gains since 1979, up approximately 60% and 130% respectively, with Goldman Sachs targeting $4,900 for gold in 2026.
• End of an Era: Warren Buffett Retires: Legendary investor Warren Buffett officially stepped down as CEO of Berkshire Hathaway today, marking the end of an era for the investing world after a staggering 3,950,000% return in the stock. 
• CME Hikes Precious Metals Margins: In a bid to curb speculative froth, the CME Group announced another significant margin requirement hike for gold and silver, effective today, which could increase volatility. 
• Bitcoin Ends a Brutal Year, Erasing All 2025 Gains: The cryptocurrency market is closing out a dismal 2025. Bitcoin has plunged over 30% from its October all-time high, wiping out all of its year-to-date gains and entering a confirmed bear market.
• Oil Set for Worst Year Since 2020: Crude oil is on track for its biggest annual decline since the pandemic, with WTI down nearly 20% in 2025 on persistent fears of a supply glut. 
• Goldman’s 2026 Outlook: Long Gold, Short Oil: Goldman Sachs released its 2026 commodity outlook, calling for gold to rally to $4,900/oz while predicting Brent crude will average just $56 a barrel. 
• A Year of Divergence: Asian Stocks Outperform S&P 500: In a notable divergence, Asian markets have had a stellar year, with Japan’s Nikkei up 26% and South Korea’s KOSPI up 75%, significantly outperforming the S&P 500.

Market Overview 

The final trading days of 2025 are proving to be a slog for the bulls. Tuesday’s session saw U.S. stocks continue their modest pullback, with the S&P 500 now down for three consecutive days. The main catalyst for the cautious mood was the release of the minutes from the Federal Reserve’s December meeting. While the Fed did cut rates at that meeting, the minutes painted a picture of a deeply divided committee. The revelation that “several participants” were concerned about entrenched inflation and favored pausing the rate-cut cycle was a hawkish surprise for a market that has been aggressively pricing in further easing. This has provided a modest bid for the U.S. dollar and put a damper on the “Santa Claus Rally” narrative. The price action reflects a clear defensive rotation, with investors selling the year’s winners in tech and discretionary and moving into more stable sectors like utilities. 

Index	Up/Down	%	Last
DJ Industrials	-94.87	-0.002	48367
S&P 500	-9.5	-0.0014	6896
Nasdaq	-55.27	-0.0024	23419
Russell 2000	-16.33	-0.0065	2503

As the market closes the book on a stellar year for Asian equities and a rollercoaster year for precious metals, the focus is now squarely on the 2026 outlook. While Wall Street remains broadly bullish, the Fed’s internal divisions and persistent inflation concerns are a stark reminder that the path forward may not be as smooth as the market currently expects. Today also marks a historic moment in the investing world, as Warren Buffett officially retires as CEO of Berkshire Hathaway after an unparalleled career.

Economic Calendar 

With U.S. markets closing early for New Year’s Eve, today is the last full trading session of the year. The calendar is light on fresh U.S. data, with the focus on international releases and positioning into the year-end. 

Data Released Yesterday / Overnight: 

• FOMC December Meeting Minutes: Revealed a divided committee, with several members favoring a pause on rate cuts due to inflation concerns. 
• U.S. Redbook Retail Sales (Dec 27): Showed strong year-over-year growth of +7.6%. 
• U.S. Case-Shiller Home Price Index (Oct): Rose a slightly stronger-than-expected +1.31% y/y. 
• China December PMIs: Official and Caixin PMIs both showed an unexpected improvement, returning to expansion territory and providing a modestly constructive signal for the Chinese economy. 

Today’s Economic Calendar: 

• U.S. Markets Close Early at 2:00 PM ET for New Year’s Eve. (Closed Thursday) 
• U.S. Session: The key release is the weekly U.S. Jobless Claims report. 
• Many global markets are either closed or have early closes.

Asset Class Spotlight: FX, Commodities, Bonds & Crypto

After a rollercoaster end to a blockbuster year, precious metals are finding a bid. The big story is the brutal, year-end profit-taking in precious metals. Gold has been hammered, with futures plunging 4.6% and Silver crashing 14.3% on Monday after a CME margin hike triggered a violent unwinding of leveraged positions. Gold is trading higher, settling above $4,386 an ounce as investors digest the hawkish Fed minutes. However, a second CME margin hike in three days, effective today, is a clear attempt to curb speculative excess and could lead to further volatility. Crude oil prices are largely unchanged, on track for their steepest annual decline since 2020 as persistent supply glut concerns have dominated the narrative in 2025.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.13	-0.0022	57.95
Gold	42.7	0.0098	4386.3
EUR/USD	-0.0026	-0.0022	1.175
USD/JPY	0.408	0.0026	156.437
Bitcoin	1,200+	1.4%+	88709
10-Year Note Yield	0.014	0.0034	0.0413

The U.S. dollar is extending its gains after the hawkish-leaning Fed minutes provided a tailwind for the greenback. 

• EUR/USD: The pair is softening below 1.1750 as the dollar firms. The pair, which has been the best-performing major currency in 2025 (up 14%), is facing headwinds from the firmer U.S. Dollar. Having gained an impressive 14% in 2025, the euro is seeing some profit-taking into the year’s end. 
• GBP/USD: After a strong 8% gain for the year, the pound is also consolidating its gains, trading in a tight range as the market weighs divergent central bank expectations for 2026. 
• USD/JPY: The pair is trading with a bullish bias near 156.60. The yen’s fundamental weakness, driven by low interest rates, is being reasserted after the hawkish Fed minutes. 

Cryptocurrencies: The crypto market is attempting to find its footing after a brutal Q4. Bitcoin is trading modestly higher, around $88,700, but is on track to be the first-ever negative post-halving year if it closes 2025 below $96,900. U.S. Treasury yields are slightly higher as the market digests the hawkish tilt in the FOMC minutes. The benchmark 10-year yield is holding steady around 4.13%. 

Looking Ahead 

Today marks the final full trading session of 2025. With U.S. markets closing early and many global markets already closed, liquidity will be extremely thin. Any significant price action will likely be driven by year-end positioning and rebalancing flows rather than fundamental news. The main focus for investors will be on closing out the year and preparing for 2026, where the debate between a soft landing and a potential recession, and the divergence between precious metals and oil, is likely to intensify.

What to Watch

• The Year-End Positioning: Today is all about final positioning and window dressing. Expect thin liquidity and the potential for some erratic moves as books are closed for the year. 
• The FOMC Minutes Fallout: The market is still digesting the hawkish tilt from the Fed minutes. This is a key headwind for risk assets heading into 2026 and has put a damper on the “Santa Claus Rally.” 
• The Precious Metals Unwind: The sharp, violent correction in Gold and Silver is a major technical event. Traders will be watching to see if dip-buyers emerge in the new year or if the unwinding of leveraged positions leads to a deeper correction. 
• The Yen’s Short-Squeeze Risk: The extreme short positioning in the Yen is a major vulnerability. Any catalyst—such as a hawkish BoJ surprise or a “risk-off” shock—could trigger a massive and violent short-covering rally in the new year. 
• The “AI Bubble” Debate: This will be a central theme for 2026. With major banks like BofA warning of “bubble-like behavior” and prominent investors like Michael Burry sounding the alarm, the market will be hyper-sensitive to any signs of weakness in the tech sector.