Resilient Markets, Cooling Growth, and a Deepening Russia - Ukraine Standoff

Weekly Market Commentary | Week of Dec 1^st, 2025

A Recap of Economic and Financial Trends from the Prior Week

By: Khadija Farooqi, The Quinnipiac University Global Economics Research Team

Last Week in Review

• U.S. data softened, with slower retail sales, easing producer inflation, mixed labor signals, and a sharp drop in consumer confidence.

• Markets rallied on growing expectations for a December Fed rate cut, while silver spiked on severe supply shortages.

• Geopolitical risks rose as Russia escalated attacks, peace talks advanced unevenly, and political turmoil intensified in Kyiv.

Economic Recap

Delayed U.S. data pointed to softer momentum during Q4, as September retail sales rose just 0.2%, down from 0.6% in August, with sales excluding autos and gas up only 0.1% and control group sales slipping 0.1% month over month. Wholesale price pressures also eased, with PPI up 0.3% and core PPI rising a “lower-than-expected 0.1%,” according to the BLS. Labor indicators were mixed: initial jobless claims fell to 216,000, the lowest reading since April, even as continuing claims climbed to 1.96 million, just shy of this year’s peak. Consumer confidence weakened sharply, with The Conference Board reporting that the index dropped to 88.7 as “all five components of the overall index flagged or remained weak,” and respondents cited “prices and inflation, tariffs and trade, and politics” as key concerns. The Fed’s Beige Book noted that “employment declined slightly” and prices “rose moderately,” with tariff-related cost pressures “widespread in manufacturing and retail.” Abroad, eurozone inflation remained subdued across France, Spain, and Italy, while the U.K.’s budget introduced roughly GBP 26 billion in new taxes as the OBR (Office for Budget Responsibility)projected the tax burden rising to 38% of GDP by 2030–2031. Japan’s latest data stayed firm alongside 2.8% Tokyo core inflation, and in China, industrial profits fell 5.5% year over year while producer prices remained in deflation for a 37th month.

Market Recap

Source: JPMorgan Asset Management, “Weekly Market Recap” (December 1^st, 2025). (Chart © JPMorgan Asset Management. Chart used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)

Markets ended the holiday-shortened week higher as expectations for a December Fed rate cut boosted risk sentiment across equities and credit. The S&P 500 gained 3.74%, the Dow Jones added 3.20%, and the Nasdaq led major indexes with a 4.91% weekly rise. Small caps outperformed strongly, with the Russell 2000 up 5.55%, while the Russell 1000 Growth and Value indexes rose 4.22% and 3.39%, respectively. International equities followed the U.S. rally, with the MSCI EAFE advancing 3.26% and MSCI Emerging Markets up 2.49% for the week. In fixed income, Treasury yields declined across most maturities, producing modest gains, while municipal bonds advanced amid light issuances. Investment-grade and high-yield corporates outperformed Treasuries on improved risk appetite.

Precious metals also strengthened sharply, led by silver, which surged more than 12% for the week to a record $58.81 per ounce. Prices jumped as traders realized there simply wasn’t enough metal to meet demand: inventories in Shanghai have fallen to their lowest levels in nearly a decade, last month’s squeeze in London made it harder and more expensive to source physical silver, and worries about future shortages pushed investors to buy now rather than wait. That scramble for limited supply drew in fast-money traders, adding a speculative layer on top of the supply tightness and amplifying the move higher. Speculative bets became so aggressive that the spread between call and put options widened to its highest level since 2022, a sign that traders were paying up for upside exposure as momentum accelerated. Expectations for a December Fed cut and potential tariff risks on critical minerals further contributed to the rally.

Calendar Events

Economic Data:

• Dec. 1 (Mon): Final U.S. Manufacturing PMI (Nov.); ISM Manufacturing (Nov.)

• Dec. 3 (Wed): ADP Employment (Nov.); Import Prices (Sept., delayed); Industrial Production (Sept., delayed); Final Services PMI (Nov.); ISM Services (Nov.); NATO Summit

• Dec. 4 (Thurs): Initial Jobless Claims (Nov. 29); Bowman speaks.

• Dec. 5 (Fri): Personal Income/Spending/PCE & Core PCE (Sept., delayed); Consumer Sentiment (Dec. prelim); Consumer Credit (Oct.)

Major Corporate Earnings:

• Dec. 4 (Thu): Toronto-Dominion Bank (TD) – Q4 2025 Earnings Announcement; Bank of Montreal (BMO) – Q4 2025 Earnings Announcement; The Kroger Co. (KR) – Q3 2025 Earnings Announcement

• Dec. 5 (Fri): USBC, Inc. – Q4 2025 Earnings Announcement

Market Themes:

Russia’s War on Ukraine: Escalation Continues Amid Fragile Peace Diplomacy

Russia escalated its campaign with its largest aerial assault in a month (36 missiles and roughly 600 drones) of which Ukraine intercepted 577, yet civilian and energy infrastructure across Kyiv, Dnipropetrovsk, Kherson, Donetsk, and Kharkiv still suffered heavy damage, leaving at least 15 dead and around 110 injured. Ukraine responded with record November strikes on Russian energy assets, hitting refineries at least 14 times and tightening pressure already compounded by recent U.S. and EU sanctions. Diplomacy intensified as U.S. and Ukrainian officials met in Geneva and Florida, reducing a controversial 28-point U.S. proposal to roughly 19–20 points, which will now require direct decisions by Presidents Trump and Zelenskyy; meanwhile, U.S. envoy Steve Witkoff traveled to Moscow, where President Vladimir Putin called the talks “necessary” but maintained maximalist demands, including full Ukrainian withdrawal from Donbas.

European leaders grew increasingly wary, France’s President Emmanuel Macron, one of Kyiv’s strongest supporters, warned of a potential U.S. concession on territory without firm security guarantees and urged China to back a winter moratorium on strikes against civilian infrastructure. Kyiv, however, entered talks weakened by domestic turmoil: President Zelenskyy’s powerful chief of staff Andriy Yermak resigned after raids linked to a widening corruption probe involving defense-energy funds, a dramatic fall for an unelected figure long seen as one of Ukraine’s most influential power brokers. As Ukraine braces for winter, officials warn Russia is preparing a major psychological-operations campaign to erode morale while probing new offensives around Chernihiv, Pokrovsk, and Dobropillia.

Chart of the Week

Source: Apollo Academy, “Bitcoin Disconnecting from Nasdaq,” 2025. (Chart © Apollo Academy. Used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)

Bitcoin and the Nasdaq, assets that typically move in tandem, have sharply decoupled in recent weeks, as the chart shows. Bitcoin has fallen far more aggressively, sliding 6% on Monday (and as much as 8% intraday) and posting its largest monthly dollar loss since mid-2021 after shedding more than $18,000 in November. The selloff has been amplified by record outflows from U.S. Bitcoin ETFs and nearly $1 billion in liquidations across long and short positions, which drained liquidity and accelerated downside pressure. Additional strain came from Strategy’s earnings downgrade, signaling corporate caution tied directly to Bitcoin’s weakness. Analysts note that sentiment has deteriorated across both crypto and tech, highlighting concerns about market concentration, infrastructure challenges, and stretched growth assumptions, but crypto has absorbed the brunt of the repositioning. Equities, including the Nasdaq, have only eased modestly as investors reassess lofty AI-related valuations, while Bitcoin (often treated as a leading barometer of risk appetite) has corrected much more sharply, driving the unusual decoupling now visible between the two assets.

Market Outlook

The coming week hinges on whether labor and inflation data confirm the cooling trend that has strengthened expectations for a December Fed rate cut. Slower retail sales, softening producer inflation, and weaker confidence point to moderating demand, though holiday spending is still expected to be solid. Lower yields and easing expectations continue to support risk assets, while global macro signals (subdued eurozone inflation, the U.K.’s fiscal tightening, and Japan’s path toward normalization) create a cautiously constructive backdrop. Still, geopolitical risks, commodity-market tightness, and crypto volatility argue for selective positioning as year-end approaches.

Sources

J.P. Morgan Asset Management. “Weekly Market Recap.” J.P. Morgan Asset Management, https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/weekly-market-recap/

T. Rowe Price. “Global Markets Weekly Update.” T. Rowe Price Insights, https://www.troweprice.com/personal-investing/resources/insights/global-markets-weekly-update.html

BlackRock Investment Institute. “Weekly Investment Commentary: Keys to an EU Investment Renaissance.” BlackRock, 24 Nov. 2025, https://www.blackrock.com/corporate/literature/market-commentary/weekly-investment-commentary-en-us-20251124-keys-to-an-eu-investment-renaissance.pdf

J.P. Morgan Asset Management. “Economic Update.” J.P. Morgan Asset Management, https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/economic-update/

Apollo Academy. “Bitcoin Disconnecting from Nasdaq.” Apollo Academy, https://www.apolloacademy.com/bitcoin-disconnecting-from-nasdaq/

Mining.com. “Silver Price Climbs to Fresh High on Supply Shortage.” Mining.com, https://www.mining.com/silver-price-climbs-to-fresh-high-on-supply-shortage/

Forbes — Soldak, Katya. “Monday, December 1: Russia’s War on Ukraine — News and Information from Ukraine.” Forbes, 1 Dec. 2025, https://www.forbes.com/sites/katyasoldak/2025/12/01/monday-december-1-russias-war-on-ukraine-news-and-information-from-ukraine/

Radio Free Europe/Radio Liberty (RFE/RL). “Rubio Says ‘More Work’ Needed After US-Ukraine Talks, As Zelenskyy To Head To Paris.” RFE/RL, https://www.rferl.org/a/ukraine-russia-negotiations-zelenskyy-trump-peace/33608719.html

Newsweek. “Russia–Ukraine War Live: Updates, Analysis, and Developments.” Newsweek, https://www.newsweek.com/russia-ukraine-war-live-news-updates-map-putin-trump-11153377