Weekly Market Commentary -  Dec. 15, 2025

Week In Review

The FOMC interest rate decision and post-meeting presser with Federal Reserve Chairman Jerome

Powell fostered investor optimism, but market sentiment was ultimately moved by underwhelming earnings results from a technology bellwether that revived concerns over debt-fueled AI capex. In line with expectations, the Federal Reserve reduced the benchmark federal funds rate by 25 basis points, lowering the range to 3.50% - 3.75%.

Commentary from Fed Chair Powell was also less hawkish than expected, as he diminished the notion of any near-term monetary policy tightening and instead focused on the perceived downside risks in the labor market.

Investors were reassured by the updated Fed dot plot that forecasts lower inflation, from 2.9% to 2.4%

by the end of 2026, suggesting the Fed is amenable to further policy easing if the risk shifts to slowing employment. 3 The good economic news was to no avail, as a sharp selloff in tech stocks ensued after Oracle announced a revenue shortfall and 2026 capex plans that were $15 billion above forecast, sparking an adjustment in valuation. The S&P 500 fell victim to a “sell the news” sector rotation, falling -0.6%.

This Week

The financial markets have a crowded economic and earnings calendar. Highlights include delayed reports for U.S. retail sales, nonfarm payrolls, and the Consumer Price Index. Analysts forecast an increase of 50,000 in nonfarm payrolls and headline inflation is projected to come in at 3.1%. 4 Several companies report results, including Nike, FedEx, and Conagra.5

Portfolio Themes

Interestingly, at these yield levels, bond investments provide a “cushion” when rates increase and larger gains if rates decline. 6 This is called an asymmetric payoff since the upside potential is greater than the downside risk. Simplicity offers bespoke bond portfolios, providing the potential for income generation and “equity-like” returns should interest rates decline.

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Data: Unless otherwise noted, data for charts, graphs, and tables is sourced from YCharts. Portfolio Themes idea sourced from J.P. Morgan Asset Management.

1Style box returns use various Russell indices tied to specific areas of the market cap (vertical) and style (horizontal) spectrums. Indices are not typically available for direct investment, are unmanaged, and do not incur fees or expenses.

2 Index Statistics: P/E Ratio – Displays the forecasted P/E ratio of the representative index ETF. Yield - Dividend-per-share divided by current share price. Table statistics are updated weekly. MSCI indices represent broad global and international equity markets. Indices are represented by iShares ETF proxies (IVW, IVV, IVE, ACWI, and ACWX).

3 Federal Reserve Board.

4 MarketWatch.

5 Seeking Alpha.

6 Columbia Threadneedle.

Past performance does not guarantee future results. Weekly commentary and investment advisory services are provided by Simplicity Wealth, LLC a SEC Registered Investment Adviser. Registration does not imply a certain level of skill or training. The information provided is for informational purposes only and does not constitute any form of advice or recommendation. The information contained within has been obtained from various sources and is believed to be accurate at the time of publication .