U.S. Stock Market’s Shaky December Start Amid Post-Thanksgiving Hangover

On December 1, 2025 (12:37 EST), the U.S. stock market launched December with a shaky start, attributed to a “post-Thanksgiving hangover” after a strong rally the previous week [1]. Final market data shows mixed performance across major indices: Dow Jones Industrial Average closed down 0.61%, S&P 500 nearly flat (+0.00%), and NASDAQ Composite rose 0.45% [0]. Sector performance reflected a rotation: defensive sectors Real Estate (-1.34%), Healthcare (-1.29%), and Utilities (-0.97%) led losses, while growth-focused Communication Services (+0.70%), Consumer Cyclical (+0.56%), and Technology (+0.52%) posted gains [0].

Volatility increased, with the CBOE Volatility Index (VIX) rising 5.44% to 17.24 [2]. A notable development was the breakdown in the traditional bond-stock safe-haven relationship: the iShares 20+ Year Treasury Bond ETF (TLT) fell 1.61%, diverging from historical trends where bonds rise during stock declines [2]. External factors driving this included a 17-year high in Japanese bond yields (spurred by hawkish Bank of Japan comments) and increased corporate bond supply [2].

1. Sector Rotation Signal
   : The divergence between defensive (down) and growth (up) sectors suggests shifting investor sentiment, potentially reflecting expectations for economic growth or risk appetite adjustments [0].
2. Global Spillover Risk
   : The impact of Japanese bond yield volatility on U.S. markets highlights increasing global financial interconnectedness, especially in fixed-income markets [2].
3. Data Timing Discrepancy
   : Preliminary intraday data from sources like Barron’s showed steeper losses, but final closing data from internal tools corrected this to mixed results, emphasizing the importance of real-time data verification [0], [2].
4. Diversification Challenge
   : The breakdown in bond-stock correlation reduces traditional portfolio diversification benefits, requiring investors to reassess risk management strategies [2].

• Volatility Risk
  : The VIX rise and warnings from BTIG’s Jonathan Krinsky indicate potential continued volatility in December despite historical year-end gains [2].
• Bond Market Risk
  : Elevated U.S. bond yields (linked to Japanese yield spikes) could pressure equity valuations, particularly in rate-sensitive sectors [2].
• Earnings Uncertainty
  : Upcoming reports from Salesforce (CRM), Snowflake (SNOW), Marvell Technology (MRVL), and retail giants (Dollar Tree DLTR, Dollar General DG) may introduce market volatility depending on results [2].

• Historical December Trends
  : Over the past century, the Dow Jones has averaged 1.46% gains in December, with a 74.2% chance of positive returns in post-election Decembers [2].
• Growth Sector Momentum
  : The Technology, Communication Services, and Consumer Cyclical sectors showed resilience, suggesting potential leadership in short-term market movements [0].

The U.S. stock market began December 2025 with mixed performance, driven by post-Thanksgiving hangover sentiment and external factors like Japanese bond yield spikes and corporate bond supply [1], [2]. Final index closes were: Dow (-0.61%), S&P 500 (flat), NASDAQ (+0.45%) [0]. Defensive sectors underperformed while growth sectors gained [0]. Volatility increased, and the bond-stock safe-haven relationship broke down [2]. This summary provides factual context and risk/opportunity considerations for decision-making, without making specific investment recommendations.