FINANCIAL BLOG

There have been plenty of catalysts supporting the broader market’s recovery from the correction lows set last month. Oversold conditions fueled by indiscriminate selling left the S&P 500 with washed-out market breadth and a hard reset of its lofty valuation. First quarter earnings season came in much better than feared, and most companies unexpectedly did not pull forward guidance.

Our 2026 fixed income outlook calls for a rangebound rate environment, cautious Fed policy, and a modest increase in spreads within corporate credit markets. Markets expect the Fed to lower the fed funds rate to around 3%, likely keeping the 10-year Treasury yield between 3.75% and 4.25%. Inflation remains above target, limiting aggressive cuts, so returns may be income-driven.

LPL Research provides its Weekly Market Performance for the week of December 15, 2025. U.S. stocks faced another week of choppy trading over the final full week of trading and major catalysts for the year.