Key Takeaways

• Top story: The Federal Reserve has resumed rate cuts as job growth slows, redirecting policy focus from inflation to labor market stability.
• The European Central Bank is holding rates steady near neutrality, underscoring Europe’s leadership in global policy normalization.
• The S&P 500 reached new record highs, driven by strong performance in the technology sector and optimism about artificial intelligence.
• US inflation has eased to 2.5%, supporting the Fed’s dovish stance and strengthening bond prices.
• Broader policy shifts and technology-driven gains signal changing market conditions, highlighting the need for a disciplined trading approach.

Introduction

On 13 December 2025, the Federal Reserve’s decision to resume rate cuts marked a pivotal shift, moving the focus from inflation control to labor market stability. With the S&P 500 reaching new highs on technology momentum, broad policy adjustments and underlying optimism continue to define the market review trading dojo and shape a disciplined trading environment.

Notizia principale (Fed Cuts Rates by 25 Basis Points)

Decision Details

The Federal Reserve lowered its benchmark interest rate by 25 basis points to 3.75-4.00% at its December meeting. This marks the third consecutive rate cut and aligns with market expectations, following similar reductions in September and November. The FOMC stated there has been “significant progress on inflation” while noting “balanced risks” in the economic outlook.

Market Impact

Financial markets reacted positively to the measured pace of monetary easing. Treasury yields fell across the curve, with the 10-year note declining 7 basis points to 3.82%. Fed funds futures now indicate expectations for approximately 75 basis points of additional cuts through June 2026, reflecting confidence in a gradual approach to policy normalization.

Forward Guidance

Chair Powell stated that the committee remains “data-dependent” but views the current pace as “appropriate” given economic conditions. Updated projections suggest most officials anticipate three additional 25 basis point cuts in 2026. This outlook points to cautious optimism for continued disinflation without triggering an economic slowdown.

In breve oggi (Earnings Season)

Tech Giants Beat Expectations

Apple and Microsoft both surpassed analyst expectations in their latest quarterly reports. Apple reported revenue of $105.2 billion, an 8% year-over-year increase, with record services revenue of $26.8 billion. Microsoft posted revenue of $65.3 billion, up 12%, driven by 23% growth in cloud services and sustained demand for AI solutions.

Analysts from Goldman Sachs stated that both corporations showed resilience against macroeconomic challenges, notably in high-margin business segments. The results led to after-hours gains of 4.2% for Apple and 3.8% for Microsoft, potentially influencing broader technology sector performance.

Banking Sector Shows Strength

JPMorgan Chase and Bank of America reported strong fourth-quarter results, with net interest income surpassing estimates despite the current rate-cutting environment. JPMorgan posted a profit of $12.9 billion on $39.7 billion in revenue, while Bank of America reported $7.8 billion in earnings on $25.3 billion revenue.

Both institutions saw loan growth accelerate, with JPMorgan’s total loans rising 5% over the previous year. Credit quality metrics remained solid, as charge-off rates stayed below historical averages despite concerns about consumer finances heading into 2026.

In breve oggi (Economic Indicators)

Retail Sales Growth Moderates

Retail sales in November increased by 0.3%, slightly below the 0.4% consensus forecast and lower than the 0.5% growth in October. Core retail sales, excluding certain categories, rose by 0.2% against expectations of 0.3%.

The data suggest consumers are making more selective spending decisions as the holiday season continues. Electronics increased by 0.7%, online sales by 0.9%. Department store sales fell 0.3%, and furniture store purchases dropped 0.5%.

Housing Starts Surprise to the Upside

Housing starts climbed 4.8% in November to a seasonally adjusted annual rate of 1.45 million units, surpassing the 1.37 million forecast. Building permits rose 3.2% to 1.53 million units.

This strength in residential construction coincides with falling mortgage rates, following recent Fed rate cuts. The average 30-year fixed mortgage rate decreased to 5.87%, the lowest since April 2024, which may support increased homebuyer demand and builder confidence as 2026 approaches.

In breve oggi (Market Review Trading Dojo)

Disciplined Approach to Rate-Cut Environment

Traders at the Trading Dojo underscore the importance of discipline during monetary easing cycles. Historical patterns show that rate cuts often support risk assets but can also introduce sector rotation and short-term volatility, potentially affecting unprepared traders.

Senior market analyst Maria Chen noted that forward guidance is now more influential than the actual rate decisions, as markets have priced in the Fed’s current trajectory. Effective traders are watching for second-order effects in rate-sensitive sectors, such as financials, real estate, and consumer discretionary.

Pattern Recognition in Current Market

The Trading Dojo technical analysis team has identified key pattern formations among major indices after the rate decision. The S&P 500 currently exhibits a bullish continuation pattern above its 50-day moving average, while small-cap indices show signs of recovery following months of underperformance.

Volume analysis points to institutional accumulation in sectors like semiconductors and cybersecurity. The Trading Dojo method highlights waiting for confirmations of these patterns rather than anticipating breakouts, reflecting the core principle that patience and verification lead to higher-probability trades. For traders interested in further developing their discipline and mindset, see the deep-dive on discipline habits.

Mercati in sintesi

Major Indices

The S&P 500 advanced 0.7% to close at 6,245, bringing its year-to-date gain to 12.4%. The Nasdaq Composite climbed 1.1% to 19,782, and the Dow Jones Industrial Average added 0.4% to finish at 42,875. The Russell 2000 outperformed with a 1.3% rise, reaching 2,347.

Sector Performance

Technology led the broader market, finishing up 1.5%, helped by semiconductor stocks, which surged 2.7% following Nvidia’s positive earnings. Financial services rose 0.9% after strong bank earnings. Utilities lagged, declining 0.5%, as investors rotated toward growth-oriented sectors.

For those seeking to deepen their technical insight into sector rotation and chart structures, explore the foundational guide to technical analysis.

Notable Movers

Tesla gained 5.3% after announcing expanded production at its Berlin facility. Boeing declined 2.8% following new reports of manufacturing delays in its 777X program. Energy stocks broadly moved lower, with Exxon Mobil down 1.2% as crude oil prices dropped 2.4% to $72.45 per barrel.

Cosa tenere d’occhio

• PCE Inflation Report: 20 December 2025
• Q4 GDP Final Estimate: 21 December 2025
• Christmas Holiday (Markets Closed): 25 December 2025
• Consumer Confidence Index: 27 December 2025
• Initial Jobless Claims: 2 January 2026
• December Employment Report: 3 January 2026

Conclusion

The Federal Reserve’s ongoing rate cuts in response to cooling labor data represent a significant shift from inflation containment to a focus on overall economic stability. Equity and bond markets have responded with renewed strength. For traders, adapting to sector rotations and emphasizing disciplined pattern recognition remain vital. What to watch: upcoming US inflation, GDP, and employment reports, which will influence the Fed’s future decisions and market dynamics.

For more on building psychological resilience and maintaining your edge during policy shifts and volatile markets, see the Trading Dojo’s guide to trading psychology. To strengthen your approach to market structure, confirmation, and pattern anticipation, consult the dedicated pillar on trading strategies.