Your Sunday Market Brief
Opening Insight
The U.S. markets finally got a taste of holiday cheer, performing a sharp 180-degree turn from recent anxiety. After weeks of uncertainty surrounding inflation and corporate earnings, all major indices surged, fueled by the near-certainty of a December Fed rate cut. This strong sentiment shift was powerful enough to successfully shrug off last month's tech jitters and the mixed signals from consumer confidence reports. It became clear that the market’s long-term optimism about policy easing had finally trumped its short-term worries, setting the stage for a dramatic close to the year.
Market Recap
U.S. equities capped a holiday-shortened week with a powerful broad-based rally. Tech and consumer stocks drove the advance as the Nasdaq Composite surged roughly 5%, leading the S&P 500 and Dow to smaller but notable gains. The move was underpinned by mounting dovish expectations for the Federal Reserve and a resilient start to the holiday shopping season.
The benchmark index advanced, buoyed by rate-cut hopes and a rotation into economically sensitive names. Gains were supported by strength in Financials and Industrials, although a core driver remained the performance of the largest mega-cap stocks, many of which are benefiting from the continued narrative of AI infrastructure buildout.
The tech-heavy index was the clear leader for the week. The outperformance was fueled by a strong reversal in sentiment around AI leadership, particularly Alphabet's surge following positive news on its Gemini 3 model and reports of Meta seeking its AI chips, temporarily calming the bubble fears that had plagued the index earlier in the month.
Stocks That Won The Week
KOHL’S
+42%
Shares soared after reporting a surprisingly strong Q3 earnings beat and raised full-year guidance, suggesting strong consumer retail demand ahead of the holidays.
URBAN OUTFITTERS
+13%
Stock climbed on a robust earnings report and positive guidance, further boosting confidence in the discretionary consumer retail sector's near-term outlook.
ROBINHOOD
+11%
Advanced after announcing plans to acquire a stake in the crypto clearinghouse LedgerX, signaling an expansion into cryptocurrency derivatives trading.
Stocks That Lost The Week
BURLINGTON STORES
–12%
Shares collapsed after management gave soft guidance despite Q3 sales growth, citing warm weather as a dampener on traffic and sales expectations.
WORKDAY
–8%
The cloud HR software provider cut its sales outlook, specifically citing weakness in the education sector, missing analyst expectations.
DEERE & CO.
–6%
The agriculture equipment manufacturer warned of a "tough market" ahead due to tariffs and farm sector weakness, sparking an investor sell-off.
Sector Snapshot
Sector | Weekly Change | YTD Change |
|---|---|---|
Technology - $XLK | +4.12% | +22.13% |
Energy - $XLE | +2.37% | +4.74% |
Financials - $XLF | +3.13% | +9.78% |
Industrials - $XLI | +2.70% | +15.79% |
Healthcare - $XLV | +1.87% | +14.02% |
The Technology and Financials sectors led the broad-based advance, benefiting from the lower-rate optimism which typically boosts growth stocks and financial valuations. Industrials and Energy also saw solid gains, reflecting overall risk appetite. However, this growth was tempered by company-specific warnings, such as the profit caution from Deere & Co., highlighting caution in non-AI focused cyclical segments.
Get home insurance that protects what you need
Standard home insurance doesn’t cover everything—floods, earthquakes, or coverage for valuable items like jewelry and art often require separate policies or endorsements. Switching over to a more customizable policy ensures you’re paying for what you really need. Use Money’s home insurance tool to find the right coverage for you.
Crypto Recap
Digital assets surged alongside equities, marking a strong risk-on period. Bitcoin and Ethereum logged impressive gains of +5.45% and +6.97% respectively, bouncing back from earlier pressure. Major news included Robinhood's announced expansion into derivatives by acquiring a stake in LedgerX, providing a notable lift to sentiment.
Performance Overview
Asset | Weekly Change | YTD Change |
|---|---|---|
Bitcoin (BTC) | +5.45% | –2.77% |
Ethereum (ETH) | +6.97% | –10.13% |
Solana (SOL) | +5.55% | –33.27% |
XRP | +6.09% | +5.71% |
Mover Of The Week
Ethereum
Ethereum took the Mover of the Week title again, driven by its larger gain of +6.97%. This move was fueled by the general risk-on environment, increased inflows into various altcoin funds, and sustained activity in the Ethereum-linked decentralized finance (DeFi) ecosystem.
Commodities Recap
Commodities were broadly bullish, led by Copper and Silver. Gold maintained strong momentum on safe-haven demand, while Oil posted modest gains despite supply concerns. The strong performance across metals signaled both policy optimism and robust industrial demand, confirming the pervasive risk-on shift across asset classes.
Asset | Weekly Change | YTD Change | Context |
|---|---|---|---|
Gold - $XAUUSD | +3.29% | +60.60% | Lower rates boosted safe-haven policy easing demand. |
Oil - $CL1! | +0.81% | –18.51% | Supply concerns offset weak demand data reports. |
Copper - $HG1! | +5.82% | +30.79% | Chinese stimulus hopes fueled industrial demand expectations. |
Silver - $XAGUSD | +12.13% | +95.28% | Tracked gold, plus stronger industrial consumption forecasts. |
Macro Drivers
The primary driver was the market-implied probability of a Federal Reserve rate cut in December, which surged to over 80% on the CME FedWatch tool, reflecting a significant policy shift. This sentiment was fueled by softer post-shutdown economic data: September retail sales undershot expectations at +0.2%, the Producer Price Index (PPI) was cooler, and consumer confidence hit its lowest level since April. The collective narrative underscored slowing demand, forcing the market to price in aggressive dovish bets. This was reflected in the bond market, where the 10-year Treasury yield fell toward the key 4.00% level. Additionally, easing U.S.-China trade tensions provided a background boost to global industrial sentiment, directly benefiting commodities like Copper.
Crash Expert: “This Looks Like 1929” → 70,000 Hedging Here
Mark Spitznagel, who made $1B in a single day during the 2015 flash crash, warns markets are mimicking 1929. Yeah, just another oracle spouting gloom and doom, right?
Vanguard and Goldman Sachs forecast just 5% and 3% annual S&P returns respectively for the next decade (2024-2034).
Bonds? Not much better.
Enough warning signals—what’s something investors can actually do to diversify this week?
Almost no one knows this, but postwar and contemporary art appreciated 11.2% annually with near-zero correlation to equities from 1995–2024, according to Masterworks Data.
And sure… billionaires like Bezos and Gates can make headlines at auction, but what about the rest of us?
Masterworks makes it possible to invest in legendary artworks by Banksy, Basquiat, Picasso, and more – without spending millions.
23 exits. Net annualized returns like 17.6%, 17.8%, and 21.5%. $1.2 billion invested.
Shares in new offerings can sell quickly but…
*Past performance is not indicative of future returns. Important Reg A disclosures: masterworks.com/cd.
Final Take
We closed the holiday-shortened week with a market thesis that is far less complicated than the one we started with. The resilience shown by retail, the sharp rebound in tech, and the near-certainty of a Fed cut signaled that broad risk appetite is firmly back. We saw strong moves in everything from copper to tech stocks, confirming that confidence is returning across multiple asset classes.
The question now shifts from what happened to what happens next. The market needs to test if this surge is a true "Santa Claus rally" or just a temporary holiday bounce. Investors will be laser-focused on upcoming inflation reports and the final set of Fed minutes to determine if this momentum can be sustained into the new year.
If you value this detailed, weekly market analysis from Prosperiax, please consider sharing this edition with a colleague or friend!