US stocks end 2025 with a record high…and a decisive week for the Fed

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US stocks end 2025 with a record high…and a decisive week for the Fed

Investors in US stock markets are looking forward to ending the last week of 2025 on a high, after stocks recently reached record levels.

Expectations indicate that Major US indicesare on track to end December on a high after shaking off the turmoil seen earlier in the month, which was caused by weakness in technology stocks due to concerns related to spending on artificial intelligence.

The Standard & Poor’s 500 index recorded a record close, before the Christmas holiday on Thursday, and was about 1% away from reaching the 7,000 level for the first time. It is now on track to achieve gains for the eighth month in a row, which will represent its longest streak of monthly gains since 2017-2018.

Two signals from the Fed

With the advent of the new year, investors are keenly focused on when to cut Interest rates by the Federal Reserve, after reducing the benchmark interest rate by 75 basis points during its last three meetings of 2025 to reach the current level between 3.50% and 3.75%.

But the last vote of the Federal Reserve on December 9 and 10 was divided, while the expectations of monetary policymakers varied greatly regarding interest rates in the coming year. The minutes of that meeting, scheduled to be published next Tuesday, will be useful in understanding some of the arguments surrounding it.

Investors are also waiting for President Donald Trump to nominate Chairman of the Federal Reserve to replace Jerome Powell, whose term ends in May, and any hint of Trump’s decision could impact markets next week.

With just a few trading sessions left in 2025, the S&P 500 is up nearly 18% for the year, while the Nasdaq Composite index of technology companies is up 22%.