The final month of 2025 begins with optimism as stocks approach record highs, buoyed by strong momentum from last week’s rally. The S&P 500 is now less than 1% from its all-time high, while the Nasdaq Composite and Dow Jones remain within striking distance of their peaks.

Investor focus this week (Dec. 1–5) turns to the PCE inflation report, key labor market updates, and several high-profile corporate earnings. Traders are pricing in an 86.9% chance of a rate cut at the Federal Reserve’s Dec. 9–10 meeting, with President Trump expected to name a new Fed chair in the coming days.

Economic data releases will provide clues on inflation and consumer strength as the US economy adjusts after the 43-day government shutdown. Meanwhile, analysts expect continued volatility driven by AI-related market swings and speculation over whether the recent tech correction signals an AI bubble or simply profit-taking.

Top Market Themes to Watch This Week

  • PCE Inflation Report (Friday): Core PCE expected to rise 2.8% year-over-year, slightly higher than last month’s 2.7%.
  • ADP Jobs Report (Wednesday): Private payrolls forecast at 42.5K, steady from October.
  • Fed Chair Nomination: President Trump expected to announce successor to Jerome Powell, with Kevin Hassett seen as frontrunner.
  • Corporate Earnings: Focus on Salesforce (CRM), Snowflake (SNOW), and Macy’s (M) midweek.
  • AI and Tech Stocks: Watch Microsoft (MSFT), Nvidia (NVDA), and Meta (META) after a volatile November.

Despite short-term jitters, Wall Street strategists from JPMorgan, HSBC, and Deutsche Bank remain bullish for 2026, forecasting the S&P 500 to reach between 7,500 and 8,000, driven by AI-driven capital spending and productivity gains.

Investors are entering December with renewed optimism. Strong holiday spending data, easing inflation, and growing expectations for a December rate cut could help extend the market’s year-end rally, provided inflation data confirms the cooling trend.

Related: The hottest new AI company is…Google?

Economic and Earnings Calendar: December 1–5, 2025

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