2025 Year-End Market Analysis: Todd Gordon on Global Market Drivers

This report is based on Todd Gordon’s CNBC “Power Lunch” discussion [4] and year-end market data. On 2025-12-31, U.S. equities traded lower mid-session, extending a 3-session losing streak. Major indices declined: S&P 500 (-0.66%), NASDAQ (-0.67%), Dow (-0.56%), and Russell 2000 (-0.74%) [0]. Sector performance was mixed: Communication Services (+0.05%) was the only gainer, while Consumer Cyclical (-0.93%), Utilities (-0.91%), and Energy (-0.88%) lagged [0]. Global markets showed mixed trends: Asian markets were muted (Japan/Korea holiday), Australia’s S&P/ASX 200 flat, and European indices opened lower [2].

Key catalysts included:

1. Year-end profit-taking breaking the “Santa Claus rally” streak after three consecutive years of gains [1].
2. Fed December meeting minutes revealing a deep policy split: 6 of 19 officials favored keeping rates at 3.75-4%, with 2026 rate cut projections ranging widely (7 see no cuts, 8 see 2+ cuts) [3].
3. NVIDIA (NVDA) underperforming (-1.28%), reflecting rotation out of 2025’s AI-fueled leading stocks [0].

1. The Fed’s policy split amplified risk-off sentiment, impacting both U.S. and global markets amid limited liquidity from Asian holiday closures [2][3].
2. NVIDIA’s decline highlighted profit-taking in high-flying tech/AI stocks, a notable shift from 2025’s rally momentum [0].
3. Communication Services’ resilience indicated defensive positioning by investors seeking stability amid uncertainty [0].
4. Global markets demonstrated interconnectedness: U.S. Fed news influenced European markets despite holiday disruptions [2].

: Fed policy uncertainty (wide 2026 rate projections), valuation concerns after prolonged gains, geopolitical risks, and uneven AI demand across regions [2][3].
: Defensive sectors like Communication Services showing relative strength [0]; potential market support levels if losses stabilize into 2026.

• U.S. indices down on year-end profit-taking, with small-cap Russell 2000 underperforming [0].
• Tech sector led by NVIDIA declined, cyclical sectors hit hardest [0].
• Fed minutes revealed deep divisions on 2026 monetary policy, driving market uncertainty [3].
• Global markets mixed: Europe down slightly, Asia muted due to holidays [2].
• Markets closed January 1, 2026; 2026 themes include Fed policy, valuations, and AI demand dynamics [2].