Market Pulse: Wednesday, December 31, 2025

Wednesday’s year-end session looked like a quiet index pullback with a loud internal message. Major benchmarks slipped less than 1%, but participation was extremely one-sided.

The S&P 500 fell 0.74%, the Nasdaq dropped 0.76%, and small caps also slid (Russell 2000 -0.75%). Under the surface, the tape was decisively negative: 17 advancers vs 482 decliners (a 0.04 A/D ratio) with advancing volume near 6.7%. The VIX rose to 14.95, higher on the day, but still consistent with a low-volatility regime.

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Market Breadth: A Broad Selloff Under a Modest Index Move

Metric	Today (Dec 31)	Tuesday (Dec 30)
Advance/Decline Ratio	0.04	0.63
Advances	17	192
Declines	482	305
Advancing Volume	6.7%	41.5%
Stocks Near 52-Week Highs	2	8
Stocks Near 52-Week Lows	4	0
% Above 20-Day MA	41.9%	63.5%
% Above 50-Day MA	55.3%	61.9%
% Above 200-Day MA	58.9%	61.7%

What the Numbers Say

• A/D collapsing to 0.04 is a classic “risk-off breadth” print, almost everything was red even though the headline index move was still contained.
• Advancing volume at ~6.7% confirms this was not just a count issue, capital flow skewed heavily toward declining names.
• The longer-term trend gauge remains more resilient (~59% above the 200-day), but short-term participation weakened sharply (~42% above the 20-day).

Explore the full dashboard: Market breadth.

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Market Performance: Third Straight Down Day Into Year-End

Index	Close	Change	% Change
S&P 500	6,845.50	-50.74	-0.74%
Dow Jones	48,063.29	-303.77	-0.63%
Nasdaq	23,241.99	-177.09	-0.76%
Russell 2000	2,481.91	-18.68	-0.75%

A quick three-session context:

• Dec 29: S&P 500 -0.35%, Dow -0.51%, Nasdaq -0.50%, Russell -0.57%
• Dec 30: S&P 500 -0.14%, Dow -0.20%, Nasdaq -0.24%, Russell -0.76%
• Dec 31: S&P 500 -0.74%, Dow -0.63%, Nasdaq -0.76%, Russell -0.75%

Explore the full dashboard: Market snapshot.

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Sector View: Nothing Green, But Leadership Still Tells a Story

With all 11 sector ETFs down, the key takeaway is relative strength, not absolute gains.

• Leaders (least down): Communication Services (XLC -0.48%), Energy (XLE -0.56%), Health Care (XLV -0.57%), Consumer Staples (XLP -0.60%), Utilities (XLU -0.63%)
• Laggards (most down): Technology (XLK -0.99%), Real Estate (XLRE -0.91%), Materials (XLB -0.83%), Industrials (XLI -0.83%), Consumer Discretionary (XLY -0.79%)

When defensives and energy hold up best on a broad down day, it often points to short-term caution rather than a single “problem sector.”

Explore the full dashboard: Sector performance.

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Volatility: Up on the Day, Still a Low-Regime Backdrop

Metric	Today (Dec 31)	Tuesday (Dec 30)
VIX Level	14.95	14.33

A quick three-session context:

• Dec 29: 14.20
• Dec 30: 14.33
• Dec 31: 14.95

Index ETF implied volatility remained in a low regime:

• SPY IV: 8.96% (Low)
• QQQ IV: 12.79% (Low)
• IWM IV: 13.51% (Low)
• DIA IV: 10.30% (Low)

This mix, weak breadth with still-low IV, is often what “orderly de-risking” looks like. It becomes more concerning if VIX and IV start trending higher while breadth remains pinned.

Explore the full dashboard: Volatility.

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Headlines Moving Markets

A few storylines worth keeping on the radar heading into the first session of 2026:

• FOMC minutes from the December meeting (Federal Reserve) — Rate-path language matters most when markets are already leaning cautious.
• Major economic indicators latest numbers (BLS) — The dashboard summarizes unemployment and payroll changes, helpful context for the soft-landing vs slowdown debate.
• China manufacturing activity expands for the first time since March (CNBC) — A firmer global growth signal can shift sector leadership expectations early in the new year.
• Economist Mark Zandi discusses a potential path to rate cuts in early 2026 (CNBC) — Expectations can move quickly, especially if data surprises begin to cluster.

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Technical Snapshot (SPY)

SPY remains above key trend markers:

• 20-day SMA: 682.54
• 50-day SMA: 676.57
• 200-day SMA: 622.89

Near-term pivot structure (based on the prior session reference levels, Dec 30):

• Resistance: 688.13 (R1), then 689.32 (R2)
• Pivot: 687.35
• Support: 686.16 (S1), then 685.38 (S2)

In a low-volatility tape, these levels tend to matter most when breadth diverges from price.

Explore the full dashboard: Support & Resistance levels.

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What to Watch Next

A short checklist for the first session of 2026:

• Breadth stabilization: Does A/D recover off extreme lows, with advancing volume back above 50%?
• Leadership reset: Do cyclicals (XLY/XLK/XLI) regain traction, or do defensives keep leading?
• Volatility follow-through: Does VIX stay in the mid-teens, or start stepping higher on weak breadth?
• Small-cap confirmation: Can IWM participate on the next up day, or does the lag persist?

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Bottom Line

Wednesday’s close looked like a controlled pullback with an unusually weak internal profile. The index declines were modest, but participation was broadly negative and short-term trend measures softened.

The key tell is what happens when the market tries to bounce. If the next up day brings breadth back, today may read as year-end repositioning. If breadth stays pinned while volatility trends higher, risk appetite can fade even without a dramatic index drawdown.

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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.