As markets enter the final full week of the year, the S&P 500 reaching 7,000 is viewed as unlikely. Delayed economic releases, which filled in inflation and unemployment data missed during the government shutdown, failed to convince buyers to push prices decisively higher amid lingering skepticism and other market pressures.

Labor market: Fed Chair Powell described the current job market as "slow hire, slow fire," indicating limited hiring activity by firms. The piece notes some attribute this to AI adoption and others to elevated interest rates. The U.S. unemployment rate has moved up to 4.7% in recent months; if the rate approaches 5% or higher, the commentary warns of a recession risk in 2026.

Inflation: The latest consumer price index showed November inflation at a 2.7% annualized pace, the weakest reading since July. Several economists have indicated the November CPI may be unreliable because of how the underlying data were collected during the government shutdown.

Uncertainty about recent releases, combined with concerns over elevated AI valuations, has left markets largely confined to a trading range since late October. After a year where near-weekly record highs were common, investors are adjusting to a narrower, more selective market regime in which further upside requires confirmation from earnings, corporate guidance, and clearer macro readings rather than valuation expansion alone. This consolidation, while quiet, can set the stage for the next significant move.

• GDP Q3 Data (Tue)
• Durable Goods Orders (Tue)
• Consumer Confidence (Tue)
• Initial Jobless Claims (Wed)
• Christmas Holiday (Thu)

At a macro level the market trend remains bullish, but shorter-term and overnight price action has been weak. SPY had been in an overnight downtrend for an extended period, yet Friday's close reclaimed an upward bias, which could allow a gradual advance in the near term. A move to 700-plus appears ambitious but was noted as not impossible.

Stay Updated