Market Pulse: Friday, December 19, 2025

Yesterday we said the post-CPI rally needed follow-through, and we got it. Stocks pushed higher into the weekend with tech back in the driver’s seat and volatility continuing to cool. The Nasdaq gained 1.3%, the S&P 500 added 0.9%, and the VIX closed at 14.91, slipping below the “calm” 15 level.

The internal picture was constructive too: breadth improved to 1.31 A/D with 65.9% advancing volume. That’s the kind of tape that tends to reward staying disciplined, not over-trading every headline. If you want to track these internals daily, our Markets Dashboard is the fastest place to see breadth, sectors, and volatility in one view.

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Macro Check: Inflation Narrative Gets a Reality Check

One notable macro thread today was a reminder that inflation data can be messier than the headline suggests. NY Fed President John Williams said some “technical factors” likely distorted November’s CPI reading downward, a subtle message that markets should not get complacent about the inflation path.

What This Means for Markets

• Rate-cut expectations can stay constructive, but the Fed still wants “proof,” not one clean print.
• Lower volatility can coexist with uncertainty, especially in thin year-end liquidity.
• For long-term planning, the right move is usually to keep your process steady, not to chase every shift in the inflation narrative. Our retirement calculators can help you stress-test plans across different rate and inflation regimes.

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Market Breadth: Quietly Better Than It Looks

Metric	Today (Dec 19)	Thursday (Dec 18)	Wednesday (Dec 17)
Advance/Decline Ratio	1.31	1.12	1.05
Advances	284	264	257
Declines	217	236	244
Advancing Volume	65.9%	58.6%	39.4%
Stocks Near 52-Week Highs	20	9	8
Stocks Near 52-Week Lows	3	0	0

What the Numbers Say

Today’s 1.31 A/D ratio is not “screaming bullish,” but it’s a clean improvement and it came with a strong confirmation: advancing volume climbed to 65.9%. When you see breadth improving and volume leaning hard toward advancers, it typically means the rally is not just a handful of mega-caps doing the work.

The new-high/new-low picture also strengthened, with 20 stocks near 52-week highs versus 3 near lows. That’s not euphoric, but it’s healthy leadership.

If you’re building an allocation plan for 2026, these are exactly the kinds of “under the surface” signals worth tracking alongside your portfolio goals. Our investment tools are built to help you stay process-driven when the tape gets noisy.

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Market Performance: Tech Leads, Defensives Lag

Index	Close	Change	% Change
S&P 500	6,834.50	+59.74	+0.88%
Dow Jones	48,134.89	+183.04	+0.38%
Nasdaq	23,307.62	+301.26	+1.31%
Russell 2000	2,529.42	+21.56	+0.86%

This was another “risk-on” style session. Tech led the way, small caps kept pace, and defensives lagged. Sector performance told the same story: Technology (XLK +2.16%) led, while Utilities (XLU -1.27%) and Staples (XLP -0.52%) were the notable laggards.

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VIX and Volatility: Calm Tape, Cheaper Hedges

Metric	Today (Dec 19)	Thursday (Dec 18)	Wednesday (Dec 17)
VIX Level	14.91	16.87	17.62

The VIX slipping below 15 is the headline, it’s a classic “calm” signal. It does not mean risk is gone, but it does mean the market is pricing a smoother path into year-end.

Options markets are showing notably low implied volatility in broad index ETFs:

• SPY IV: 7.75% (low, -54% vs historical avg)
• QQQ IV: 10.41% (low, -53% vs avg)
• IWM IV: 11.46% (low, -52% vs avg)
• XLK IV: 15.72% (normal, -32% vs avg)
• XLY IV: 66.46% (extreme, +232% vs avg)

That last line is the oddball. When broad index IV is very low but select sector ETF chains show extreme readings, it’s often a mix of idiosyncratic risk, year-end positioning, and options liquidity effects. For the cleanest view, monitor our volatility dashboard alongside sector performance.

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Headlines Moving Markets

Several storylines helped shape today’s tape and where money flowed:

Fed Caution on CPI: NY Fed President Williams said “technical factors” likely distorted November’s CPI reading downward. That’s a reminder that one print rarely settles the inflation story, and it can keep the market sensitive to next data.

Drug Pricing Headlines Hit Healthcare: Reports that large pharma companies inked drug-pricing deals with President Trump added uncertainty to the healthcare complex, a sector where policy risk can change the narrative fast.

Energy Risk Premium in Focus: Oil prices were steady even as geopolitical headlines stayed hot, after Trump said he would not rule out war with Venezuela. Energy did not lead today, but those headlines can change the risk calculus quickly.

Year-End Signals and “Sell Warnings”: A Bank of America “sell signal” story circulated, with historical pullback comparisons. These kinds of year-end warnings tend to matter most when breadth deteriorates, today it didn’t.

Risk Appetite Stays Alive: High-beta stories, including a strong move in Rocket Lab, reinforced that investors are still willing to pay up for growth when volatility is easing.

Thin Liquidity Can Create Weird Prints: A sharp, confusing surge in Infosys, followed by a quick cool-off, was a good reminder that late-December liquidity can magnify odd moves.

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Technical Snapshot

The S&P 500 is pressing toward recent highs with volatility cooling. Key levels to watch:

• Resistance: 6,808 (R1), then 6,841 (R2)
• Pivot: 6,783
• Support: 6,750 (S1), then 6,726 (S2)
• Critical Support: 6,643 (S3)

The bullish case stays intact as long as pullbacks hold above first support and breadth remains positive. If you want to compare index levels, sectors, and volatility signals side by side, the market snapshot is the quickest reference.

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Looking Ahead: Monday, December 22

The calendar turns toward the final full trading week before year-end. Here are a few concrete things to watch:

• Follow-through in breadth: Can A/D push toward 1.5+ with advancing volume staying above 60%?
• Rotation watch: Does leadership stay in tech, or do defensives catch a bid?
• Volatility floor: Can VIX hold below 15, or does protection demand reappear?

Light holiday liquidity can amplify moves in either direction. The key is to separate “bigger prints” from “bigger signals,” breadth and volatility help you do that.

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Bottom Line

Today looked like a market that’s comfortable, not euphoric. Indexes rose, volatility cooled, and internals were supportive, especially advancing volume near 66%. That combination tends to reward patience.

The biggest risk into year-end is not one scary headline, it’s a slow deterioration in participation that shows up in breadth before it shows up in prices. For now, the tape is still behaving.

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Market Pulse provides daily analysis of S&P 500 market breadth, sector rotation, and volatility signals to help investors understand what’s happening beneath the surface. Data sourced from our real-time market breadth collectors. For personalized planning, explore our retirement calculators, investment tools, and FIRE planning resources.