Market Pulse: Monday, December 22, 2025

On Friday we said the year-end rally needed two things to stay “real”: follow-through in breadth and a VIX that stays pinned below 15. Monday checked both boxes.

Advancers outnumbered decliners 391 to 112 (a 3.49 A/D ratio), advancing volume ran 72.6%, and the VIX closed at 14.08. Prices moved higher, but the bigger story was participation. If you want to track these signals daily, our Markets Dashboard is the quickest way to see breadth, sectors, and volatility together.

---

Market Breadth: Participation Was the Story

Metric	Today (Dec 22)	Friday (Dec 19)
Advance/Decline Ratio	3.49	1.31
Advances	391	284
Declines	112	217
Advancing Volume	72.6%	65.9%
Stocks Near 52-Week Highs	54	20
Stocks Near 52-Week Lows	6	3

What the Numbers Say

A 3.49 A/D day is a “don’t overcomplicate it” internal. It doesn’t guarantee a straight line higher, but it does tell you money flowed broadly instead of hiding in a handful of names.

A few additional participation reads help fill in the picture:

• 62.2% of stocks above their 20-day moving average (short-term trend)
• 60.8% above their 50-day (intermediate trend)
• 61.4% above their 200-day (long-term trend)

Those aren’t euphoric readings (they’re not 80%+), but they’re consistent with a market that’s trending higher with decent internal support.

---

Market Performance: Green Across the Board

Index	Close	Change	% Change
S&P 500	6,878.49	+43.99	+0.64%
Dow Jones	48,362.68	+227.79	+0.47%
Nasdaq	23,428.83	+121.21	+0.52%
Russell 2000	2,558.78	+29.36	+1.16%

Small caps led the day, which generally pairs well with “breadth is doing the work” narratives. When the Russell is outperforming on a green tape day, it’s often a sign investors are willing to reach a little further out on the risk spectrum.

---

Sector View: Financials and Cyclicals Led

Sector leadership skewed cyclical:

• Leaders: Financials (XLF +1.23%), Materials (XLB +1.18%), Industrials (XLI +1.11%), Energy (XLE +1.04%), Real Estate (XLRE +0.74%)
• Laggard: Consumer Staples (XLP -0.35%)

This is a classic “risk-on but not reckless” mix: economically sensitive groups led, while defensives like staples trailed.

If this rotation persists, it’s constructive for the broader tape because it suggests the rally isn’t depending on just one theme.

---

Volatility: Calm Tape, Cheap Index Protection

Metric	Today (Dec 22)	Friday (Dec 19)
VIX Level	14.08	14.91

The VIX holding near 14 keeps the market in “calm” mode. That’s supportive for risk assets, but it can also breed complacency if internals start to slip later.

Index ETF implied volatility remained low versus long-run norms:

• SPY IV: 6.59% (low, about 61% below its historical average)
• QQQ IV: 9.60% (low, about 56% below average)
• IWM IV: 11.46% (low, about 52% below average)
• DIA IV: 9.21% (low, about 42% below average)

In plain English: broad-market protection was still relatively cheap today. Whether that stays true into the final stretch of the year matters, especially if participation cools.

---

Headlines Moving Markets

A few themes that stood out in the news flow:

• Consumer/retail positioning chatter stayed active, with sell-side and TV commentary highlighting setups in big consumer brands.
• AI and mega-cap narrative maintenance continued, with market talk focusing on what fresh reporting implies for major chip/AI leaders.
• Corporate transitions and governance stories were on the tape (notably around Berkshire’s looming leadership change), which can influence how investors think about “quality” and defensive exposure.
• Staples-specific worries popped up in the Costco orbit, which fits the day’s sector scoreboard (staples were the only sector in the red).

---

Technical Snapshot

The S&P 500 closed higher and remains above key pivot structure:

• Resistance: 6,852 (R1), then 6,870 (R2)
• Pivot: 6,822
• Support: 6,805 (S1), then 6,775 (S2)
• Critical Support: 6,698 (S3)

In a low-volatility tape, these levels tend to matter most when breadth diverges. If we start seeing weaker participation on up days, pay closer attention to whether pullbacks hold above first support.

---

What to Watch Tomorrow

A short checklist for Tuesday:

• Breadth follow-through: Can A/D stay above ~1.5 with advancing volume holding above 60%?
• Small-cap leadership: Does the Russell keep outperforming the S&P?
• Rotation durability: Do financials/materials/industrials keep leading, or does leadership narrow back to a few mega-caps?
• Volatility floor: Does the VIX hold below 15, or does hedging demand quietly return?

Year-end liquidity can exaggerate moves. The job is to focus on the signal (breadth + volatility) rather than the size of any single candle.

---

Bottom Line

Monday was a strong “under the surface” day: broad participation, strong up-volume, and volatility still calm. That combination usually argues for staying process-driven and avoiding the temptation to fade strength just because it’s late December.

The main risk to monitor is not a scary headline—it’s a slow cooling in participation that shows up first in breadth. For now, that’s not what the data is saying.

---

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.