2025

By Sruthi Shankar and Shashwat Chauhan

Dec 26 (Reuters) – Wall Street indexes were poised to open nearly flat in light post-Christmas trading on Friday, while investors bet that more interest rate cuts and strong corporate earnings would propel markets to fresh highs next year.

The benchmark S&P 500 and the blue-chip Dow Jones Industrial Average closed at record highs on Wednesday, capping a broad rally in a holiday-shortened session.

Stocks have climbed in recent days after months of intermittent selloff, as AI-related companies faced pressure amid concerns over soaring valuations and high capital expenditures denting profits.

However, signs of resilience in the U.S. economy, the prospect of a dovish pivot under a new Federal Reserve chair next year and renewed appetite for AI stocks have fueled a market recovery, putting the S&P 500, Dow and Nasdaq on course for a third straight year of gains.

“2026 is likely going to be a ‘prove-it’ year for markets. Companies must deliver tangible productivity and margin gains from AI and other investments,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Analysts expect profit for S&P 500 companies to increase 15.5% in 2026, an improvement from a 13.2% growth forecast for 2025, according to data compiled by LSEG.

At 08:13 a.m. ET, Dow E-minis were down 66 points, or 0.13%, S&P 500 E-minis were down 3.5 points, or 0.05%, and Nasdaq 100 E-minis were up 9 points, or 0.03%.

The S&P 500 has risen more than 17% so far in 2025, driven by megacap tech companies for much of the year, but the rally has broadened of late, with investors piling into cyclical sectors such as financials and materials.

Traders are waiting to see if the “Santa Claus rally” — a seasonal phenomenon where the S&P 500 posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac — can happen this time. That period began on Wednesday and will run through January 5.

Nvidia shares edged up 0.7% in premarket trading, after the AI chip designer agreed to license chip technology from startup Groq and hire its CEO.

Micron Technology rose 2.1%, adding to its near 22% surge so far this month, driven by strong earnings forecasts.

Biohaven slumped almost 13% after its experimental depression drug did not meet the main goal of a mid-stage trial, adding to a string of setbacks for the company this year.

Coupang rose 5.8% after the online retailer said all the customer information leaked from the South Korean company has been deleted by the suspect.

U.S.-listed shares of precious metal miners such as First Majestic, Coeur Mining and Endeavour Silver rose between 2.5% and 3.1%, as silver and gold prices smashed fresh records again. [GOL/]

(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Shilpi Majumdar)

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NEW YORK, Dec 26 (Reuters) – Investors are looking for the U.S. stock market to end 2025 on a high note next week, with equities at record peaks and nearing further bullish milestones to close out another strong year.

Major U.S. indexes were on course to end December higher after stocks shook off turbulence earlier in the month driven by weakness in technology shares over worries tied to spending on artificial intelligence. 

The S&P 500 posted a record close on Wednesday, ahead of the Christmas holiday on Thursday, and was about 1% from reaching the 7,000 level for the first time. The benchmark index was on track for its eighth straight month of gains, which would be its longest monthly winning streak since 2017-2018.

“Momentum is certainly on the side of the bulls,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest Wealth Management. “Barring any exogenous event, the path of least resistance for stocks, I think, is higher.”

Minutes from the Federal Reserve’s most recent meeting highlight the market events in the holiday-shortened week ahead, while year-end portfolio adjustments could cause some volatility at a time when light trading volumes can exaggerate asset price moves.

Heading into the new year, investors are highly focused on when the Fed might further cut interest rates. The U.S. central bank, which balances goals of contained inflation and full employment, lowered its benchmark rate by 75 basis points over its last three meetings of 2025 to the current level of 3.50%-3.75%.

But the Fed’s most recent vote at its December 9-10 meeting to lower rates by a quarter percentage point was divided, while policymakers also gave widely different projections about rates in the coming year. The minutes for that meeting, due to be released on Tuesday of next week, may be “illuminating to hear what some of the arguments were around the table,” said Michael Reynolds, vice president of investment strategy at Glenmede.

“Handicapping how many rate cuts we’re going to get next year is a big thing markets are focused on right now,” Reynolds said. “We’ll just get a little bit more information on that next week.”

Investors are also waiting for President Donald Trump to nominate a Fed chair to replace Jerome Powell, whose term ends in May, and any inkling of Trump’s decision could sway markets in the coming week.

With just a handful of trading sessions left in 2025, the S&P 500 was up nearly 18% for the year, with the technology-heavy Nasdaq Composite up 22%. 

However, the tech sector, which has been the main driver of the more than three-year-old bull market, has struggled in recent weeks, while other areas of the market have shined. Despite rebounding this week, the S&P 500 tech sector has declined more than 3% since the start of November. Over that time, areas such as financials, transports, healthcare and small caps have posted solid gains.

The market moves indicate some rotation into areas where valuations are more moderate, said Anthony Saglimbene, chief market strategist at Ameriprise Financial.

“There are more investors that are buying in to the narrative that the economy is on pretty solid footing right now,”  Saglimbene said. “And it has weathered a lot of potential roadblocks this year that might not be such roadblocks next year.”

(Reporting by Lewis Krauskopf in New York; Editing by Matthew Lewis)

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The holiday season will soon come to a close, but the busiest time of the year for product returns is just beginning.

The National Retail Federation estimates 17% of holiday purchases will be sent back this year. More retailers are reporting extended return windows and increased holiday staff to handle the rush this year.

A major driver for returns is uncertainty. When we buy for other people, finding what they want is a bit of a guessing game. Online purchases have higher return rates because finding the right size and color is tough when you’re just staring at images on screens.

“Clothing and footwear, as you can imagine, because fit is such an important criteria, they have higher rates of returns,” said Saskia van Gendt, chief sustainability officer at Blue Yonder, which sells software designed to improve companies’ supply chain management.

Returns come with an environmental cost, but there’s a lot consumers and companies are doing to minimize it.

If a company sells a thing, it’s probably packaged in plastic. Plastic is made from oil, and oil production releases emissions that warm the planet. If that thing is bought online, it’s put on a plane or a train or a truck that usually uses oil-based fuel.

If you buy a thing and return it, it goes through most or all of that all over again.

And once those products are back with the retailer, they may be sent along to a refurbisher, liquidator, recycler or landfill. All these steps require more travel, packaging and energy, ultimately translating to more emissions. Joseph Sarkis, who teaches supply chain management at Worcester Polytechnic Institute, estimates that returning an item increases its impact on the planet by 25% to 30%.

Roughly a third of the time, those returns don’t make their way to another consumer. Because frequently, it’s not worth reselling.

If, for example, you get a phone, but you send it back because you don’t like the color, the seller has to pay for the fuel and equipment to get the phone back, and then has to pay for the labor to assess whether it has been damaged since leaving the facility.

“It can be quite expensive,” said Sarkis. “And if you send it out to a new customer and the phone is bad, imagine the reputational hit you’ll get. You’ll get another return and you’ll lose a customer who’s unhappy with the product or material. So the companies are hesitant to take that chance.”

Something as expensive as a phone might get sold to a secondary or refurbishment market. But that $6 silicone spatula you got off Amazon? Probably not worth it. Plus, some stuff — think a bathing suit or a bra — is less attractive to customers if there’s a chance it’s been resold. The companies know that.

And that’s where the costs of returns are more than just environmental — and consumers wind up paying. Even free returns aren’t really free.

“Refurbishment, inspection, repackaging, all of these things get factored into the retail price,” said Christopher Faires, assistant professor of logistics and supply chain management at Georgia Southern University.

If you want to reduce the impact of your returns, the first move is to increase their chances of resale. Be careful not to damage it, and reuse the packaging to send it back, said Cardiff University logistics and operations management lecturer Danni Zhang.

If you have to return something, do it quickly. That ugly Christmas sweater you got at the white elephant office party has a much better chance of selling on Dec. 20 than it does on Jan. 5. Zhang said it’s not worth the cost to the company to store that sweater once it’s gone out of season.

Another tip: in-person shopping is better than online because purchases get returned less often, and in-person returns are better, too — because those items get resold more often. Zhang said it reduces landfill waste. Sarkis said it reduces emissions because companies with brick-and-mortar locations spread out across the country and closer to consumers thus move restocked goods shorter distances.

“If I can return in-store, then I definitely will,” Zhang said. “The managers can put that stuff back to the market as soon as possible.”

Obviously the best thing consumers can do is minimize returns. Many shoppers engage in “bracketing behavior,” or buying multiple sizes of the same item, keeping what fits, and returning the rest.

“This behavior of bringing the dressing room to our homes is not sustainable,” said Faires.

If you’re buying for someone else, you can also consider taking the guesswork out of the equation and going for a gift card.

“I know we do really want to pick up something really nice to express our love for our friends or our family. But if we are more sustainable, probably the gift card will be much better than just purchasing the product,” Zhang said.

Sarkis wants to see companies provide more information in product descriptions about the environmental impact of returning an item, or how much of the purchase price factors in return costs.

“But I don’t know if they want to send a negative message,” he said. “If you’re telling someone to stop something because of negative results, that’s not going to sell.”

Sarkis and Zhang both say charging for returns would help. Already Amazon is requiring customers pay in certain situations.

On the tech side, Blue Yonder’s recent acquisition of Optoro, a company that provides a return management system for retailers and brands, uses a software to quickly assess the condition of returned products and route them to stores that are most likely to resell them.

“Having that process be more digitized, you can quickly assess the condition and put it back into inventory,” said van Gendt. “So that’s a big way to just avoid landfill and also all of the carbon emissions that are associated with that.”

Clothing is returned most often. Many sizes do not reflect specific measurements, like women’s dresses, so they vary a lot between brands. Zhang said better sizing could help reduce the need for returns. On top of that, Sarkis said more 3D imaging and virtual reality programs could help customers be more accurate with their purchases, saving some returns.

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The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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