2025-12-29 Market Analysis: Jay Pelosky’s Economic Comments, 2026 Risks, and Early Trading Trends

The pre-market session on December 29, 2025 (08:22 EST) was shaped by comments from TPW Advisory’s Jay Pelosky, who stated the U.S. economy is “running hot” and 2025 represents the start of a structural shift in global equities, ahead of his full 2026 market risk outlook [2][3]. Early regular trading (as of 14:12 ET) shows major U.S. indices slightly negative: S&P 500 (-0.47%), Nasdaq Composite (-0.69%), and Dow Jones Industrial Average (-0.54%) [0].

Sector performance is split, with Energy (+0.47%) and Basic Materials (+0.42%) in positive territory, while Healthcare (-0.55%) and Consumer Cyclical (-0.43%) lag [0]. The Healthcare decline is driven by a sharp biotech selloff: Ultragenyx Pharmaceutical (RARE) dropped 44.43% and Mereo BioPharma (MREO) fell 87.94% following failed trial results for setrusumab, a brittle-bone treatment [1][0].

Broader 2026 macro risks are also in focus, including market overpricing of Fed rate cuts, Supreme Court scrutiny of President Trump’s tariffs, and elevated inflation and labor market weaknesses [4][5].

1. Pre-market comments by high-profile analysts (like Pelosky) can set market narratives, but sector-specific catalysts (biotech trial failures) can have more immediate and pronounced trading impacts.
2. The split in sector performance (Energy/Basic Materials up, Healthcare down) reflects ongoing market tension between cyclical opportunities (potentially driven by a commodities super cycle teased by Pelosky) and idiosyncratic sector risks.
3. Pelosky’s “hot economy” assessment contrasts with early market weakness, highlighting potential investor uncertainty as they weigh conflicting signals: near-term biotech setbacks vs. longer-term economic and equities shift narratives.

• Biotech sector volatility:
  Clinical trial failures can lead to sharp, company-specific declines that spill over to the broader Healthcare sector, as seen with RARE and MREO [1][0].
• 2026 macro uncertainties:
  Market underpricing of Fed policy shifts, legal challenges to tariffs, and persistent inflation/labor market weaknesses could increase market volatility in the coming year [4][5].

• Energy and Basic Materials resilience:
  These sectors show strength amid early market weakness, potentially benefiting from a commodities super cycle narrative teased by Pelosky [2][3].

On December 29, 2025, pre-market comments by Jay Pelosky established a narrative of a “hot” U.S. economy and impending global equities shift. However, early trading was dominated by a biotech sector selloff from failed trial results, leading to mixed sector performance and slightly lower major indices. Broader 2026 macro risks (Fed policy, tariffs) remain under scrutiny, creating a complex market environment.

All analysis is based on available data as of 2025-12-29 14:12 ET and does not constitute investment advice.