Investopedia Markets News (all except PF)

• Jim Cramer told "Investopedia Express" podcast listeners that speculative stocks tied to AI hype and data center buildouts are due to "revert" to previous levels.
• He also provided his 2026 playbook: shifting from companies making the technology for AI to established firms using it to cut costs and boost profits.

CNBC's "Mad Money" host is waving the yellow flag.

In other words, he's urging caution: After a run-up in AI and other tech plays in 2025, Jim Cramer says "the year of magical investing" is coming to an end. In a recent interview on the "Investopedia Express" podcast, the CNBC star warned that many stocks have soared too high on hype—he name-checked companies tied to quantum computing, autonomous vehicles, and data center buildouts—and are due for a pullback.

Only two of the "Magnificent Seven" have beaten the S&P 500's gains in 2025. Cramer says that's a warning that the easy gains from AI hype are fading. Cramer suggests that everyday investors can still have a winning portfolio by leaning into quality, staying patient, and not confusing momentum for value when picking stocks.

But Cramer isn't telling investors to head for the exits. Instead, he suggests shifting from shares of companies building AI systems to blue chips using artificial intelligence to transform their businesses.

We take you through his 2026 to-do list below.

Cramer warned "Investopedia Express" listeners to review their holdings of stocks tied to speculative themes, such as quantum computing, autonomous vehicles and the AI data center buildout. Many of these stocks were "dramatically lower" not long ago, he said, and have since soared on hype, not fundamentals.

"These stocks are really high and they're going to revert to where they were before the willy-nilly building of data centers," he said.

So where should you look instead? Cramer's answer: avoid the companies racing to build AI and add shares of the legacy players deploying it.

Johnson & Johnson (JNJ) "is so exciting and doing great things," he said, mentioning its recent use of AI for cancer treatments. He also pointed to Procter & Gamble (PG), which is using Nvidia's (NVDA) technology to save costs associated with its supply chain.

"One of the reasons why I think next year is going to be a really good year for Procter is you're going to see all the things that they are doing with the technology," he said. "It's not evident yet."

Cramer said someone on his recent book tour accused him of "trading people to death." His response: "I have not advocated that course since 2009." While he still does lightning rounds for callers on stocks to "buy buy buy," the message behind his picks has changed.

Cramer warned against seeing his stock picks as short-term plays. Recalling Warren Buffett, who famously said his favorite holding period is "forever," Cramer says he believes in buying and holding for the long haul.

He differs with the Oracle of Omaha on what to buy. Buffett has told everyday investors to stick with low-cost index funds. Cramer suggests splitting your portfolio between index funds and four or five individual stocks you believe in, with a non-stock asset on the side for protection.

Those championing index funds often tell regular investors to avoid individual stocks, he told the "Investopedia Express," "but they're the dogmatists—they're the people who are just saying you're not smart enough."

"I want you to own, don't trade, and compound," Cramer said. It's Buffett's lifelong philosophy in three words: buy good companies, reinvest the returns, and wait for the long-term gains to kick in.

Cramer traced that lesson to childhood visits to a Philadelphia paper goods warehouse, where his dad would take him to buy supplies for the family business. The owner—Cramer calls him Mr. Hank, a pseudonym—kept a handwritten ledger of his stock purchases and eventually became a millionaire, he said.

Peter Lynch, the legendary Fidelity fund manager, long argued that ordinary people could beat the pros by investing in what they know. Cramer agrees—but only if they're willing to do the homework.

"I want people to be able to pick five stocks," he said. "One is really a moon shot because I feel that it only takes one to change your life."

News of the day for Dec. 30, 2025

Stock futures are little changed this morning after two consecutive sessions of losses for major indexes; tech stocks have stabilized after slumping on Monday; gold and silver prices are surging after the precious metals posted steep declines to start the week; Facebook-parent Meta announced it acquired AI agent firm Manus. Here's what investors need to know today.

Stock futures are holding steady this morning after major indexes lost ground on Monday for the second straight session. Futures tied to the Dow Jones Industrial Average, S&P 500 and Nasdaq were hovering near unchanged in recent trading. Bitcoin was at $87,900, up from an overnight low of around $87,000. The yield on the 10-year Treasury note, which influences mortgage rates and costs on other consumer loans, was at 4.14%, up from 4.12% at yesterday's close. Oil prices continued to climb amid tensions between the U.S. and Venezuela. West Texas Intermediate futures, the U.S. crude oil benchmark, were up 0.3% at $58.30 per barrel, trading near their highest levels of the month.

Shares of some of the world's biggest technology companies are back on firmer footing Tuesday after leading the market's downturn yesterday.Concerns about whether major tech companies will profit from massive investments in artificial intelligence have weighed on investor sentiment in recent months. In premarket trading Tuesday, Tesla (TSLA) shares were up 0.5%, after the stock fell 3.3% on Monday to lead Nasdaq decliners. Shares of AI chipmaker Nvidia (NVDA) inched higher after shedding more than 1% yesterday, while Palantir (PLTR) ticked higher after dropping more than 2% Monday and Oracle (ORCL) was little changed after sliding 1%.

Gold and silver prices are bouncing back from the big declines posted yesterday after exchange operator CME Group made a key change to its metals contracts. Gold futures were recently up 1.7% at $4,415 an ounce, after sliding as low as $4,330 yesterday. Silver futures were up more than 7% this morning, at around $75.55 an ounce. After a weeks-long rally that had lifted the precious metals to a series of record highs, gold and silver plunged on Monday after CME raised its margin requirements for precious metals contracts. Higher margin requirements require traders to add money to accounts that insure against default, effectively raising their costs to trade the futures contracts.

Traders will be watching today’s release of the minutes from the Federal Open Market Committee's December meeting for clues about the direction the Federal Reserve will take on interest rates in 2026. The minutes, which are set to be released at 2 p.m. ET, will provide more insight into the FOMC’s decision to cut the Fed's benchmark lending rate for a third straight meeting. The Fed is expected to keep interest rates steady when it meets in January, though rising unemployment levels, along with tame inflation readings, could put pressure on FOMC members to reduce borrowing costs again. Investors will also be monitoring home price data set to be released at 9 a.m. ET.

Meta Platforms (META) announced it acquired Manus, a Singapore-based firm that develops  autonomous general-purpose AI agents. In a release, Meta said that Manus agents are able to “independently execute complex tasks like market research, coding, and data analysis.” Meta said it would integrate Manus services into its offerings. The move by the Facebook parent company comes as it continues to make big investments in its AI business. Shares of Meta, which through Monday's close were up 13% in 2025, were little changed in premarket trading.

• The Federal Reserve is likely to cut rates in 2026, but internal divisions and mixed economic data could limit the extent and pace.
• Even with a new Fed chair appointed by President Donald Trump, interest-rate decisions will still depend on committee consensus.

The Federal Reserve is heading into a tricky 2026, as officials debate the economy’s mixed signals and President Donald Trump is due to name a new Fed chair.

The central bank will likely lower rates a couple of times, some analysts say, as November’s jobs report brought the latest evidence of a weakening economy. One big question is whether Trump's new Fed chair will push for aggressive action—and whether the 18 other members of the Federal Open Market Committee will be on the same page.

“The Chair does not have unbounded power to push the Committee in whatever direction he chooses,” wrote Matthew Luzzetti, chief U.S. economist at Deutsche Bank.

Interest rate decisions affect everything from mortgage costs to credit cards and savings accounts. A divided Fed and leadership change could mean more uncertainty for borrowers and investors in 2026.

The FOMC’s votes in 2025 are instructive, with Fed Chair Jerome Powell struggling to get more hawkish Fed officials to support the Fed’s three rate cuts. The hawks’ presence on the FOMC will be felt again in 2026, with a couple of their most vocal members rotating onto voting spots.

Economic data is also “likely to look less supportive of lower rates by mid-2026,” Luzzetti wrote. The labor market has been softening—unemployment rose to 4.6% in November and employers added a lackluster 64,000 jobs. 

However, resilient consumer spending and investments in artificial intelligence are driving overall GDP growth. Solid growth next year should “mitigate downside risks to the labor market” and weaken the case for lowering rates, Luzzetti wrote.

It all adds up to what could be a heated debate at the Fed next year—and one that Trump’s Fed nominee may not be able to win.

“The Fed is a process, not a one-man show,” wrote Andrew Brenner, vice chairman at NatAlliance Securities.

The biggest change is due to come soon, since Trump is finalizing his desired nominee for Fed chair. Powell's four-year term ends in May.

One potential nominee is Fed Governor Chris Waller, a longtime Fed economist whom Trump picked to join the Fed in 2020. Two other options are the “two Kevins”: former Fed Governor Kevin Warsh, a fellow at the conservative Hoover Institution; or Kevin Hassett, a top White House economist.

Betting markets think Hassett is the most likely pick. Hassett is a Trump ally, raising some concern among investors that he’d abide by Trump’s call for aggressive interest rate cuts—even if they’re not needed. 

Investors value the Fed’s independence to decide interest rate policies based on the economic data, not any given president’s desire for lower rates to boost the economy.

“Nonetheless, we view him as a pragmatist, sensitive to … any erosion in the market's perception of Fed independence,” Barclays economist Jonathan Millar wrote, adding that he would “ultimately need to win the hearts and minds” of others on the Fed.

Whoever Trump picks would need to get confirmation from the U.S. Senate, where Republicans hold a 53-seat majority. 

Votes for Fed chairs tend to occur with heavy bipartisan crossover. Powell got at least 80 votes in both of his nominations—when Trump originally named him Fed chair in 2017 and then again when President Joe Biden re-appointed him.

Trump may get a couple of openings next year on the Fed’s Board of Governors—the 7-member contingent of the FOMC that’s based in Washington, D.C. and is subject to Senate confirmation. 

Besides Powell, Trump has named three of the Fed’s seven-member board, with the remaining three being Biden appointees.

It’s unclear if Trump will indeed get those openings, but any slots give him a chance to put a clearer stamp on the Fed.

“It would be an understatement to suggest that the influence of the administration on the FOMC is sailing into uncharted waters as 2026 comes into focus,” wrote Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.

Trump has tried to oust Fed Governor Lisa Cook, a Biden appointee, but she’s remained on the Fed board as the legal battle continues. Next year could bring a resolution to that fight, with the Supreme Court set to hold oral arguments in January.

Powell will also have to decide whether he will leave the Fed in May 2026, when his four-year term as Fed chair ends. His term as a Fed board member ends in 2028, so he could choose to stay on the Fed even if he’s no longer its leader.

If he does stay on the Fed, it could be with an aim to “further reinforce the Fed’s independence,” Lyngen wrote. But it would also be nearly unprecedented since the last example occurred in 1948, Lyngen wrote, adding that the move “risks being viewed as more politically motivated.”

Even if Trump names more Fed appointees, the FOMC also includes five other voting members every year.

Those voters are the heads of the 12 regional districts the Fed is broken into—a structure designed to bring local perspectives to the D.C.-based institution. Four regional Fed presidents rotate into voting spots every year, while the New York Fed president has a permanent FOMC vote.

In one move that eased some market worry, the Fed’s Board of Governors recently approved the regional Fed presidents’ appointments for the next five years. That will keep them in their rotating FOMC roles unless they resign.

That “clearly offsets any concerns” that some investors had about a Fed board with Trump appointees vetoing regional Fed presidents’ hires, Lyngen wrote.

“We’ll argue that the move enhanced the perception of the Fed’s independence,” Lyngen wrote.

• A decision by CME Group to adjust its metals contracts halted a recent rally in precious metals
• Traders must apply more upfront cash to bet on metals prices
• Gold and silver remain on pace for their highest returns since 1979.

After a strong week-long rally that sent gold, silver and other precious metals prices to all-time highs, prices fell sharply Monday after exchange operator CME Group made a key change to its metals contracts.

After peaking at $4,565 per troy ounce Friday, spot gold was down more than 4% at $4,355 in late afternoon trading today. Spot silver, whose rally had outpaced gold in recent days, fell nearly 9% Monday to just above $73 an ounce, after hitting a high above $84 on Sunday. Prices for platinum and palladium also fell dramatically on Monday.

CME Group raised its margin requirements for precious metals contracts, a change that took effect Monday. Higher margin requirements force traders to add money to accounts that insure against default when accepting physical delivery on a futures contract.

Exchange operators ordinarily raise margin requirements after strong price rallies. Essentially, it raises the minimum amount traders must give brokers in order to bet on commodity prices.

Gold prices have hit a series of record highs this year as investors have turned to precious metals as stores of value amid economic and geopolitical uncertainty. Even with Monday's steep declines, precious metals have significantly outperformed major stock indexes and cryptocurrencies in 2025.

Last week's price rally in precious metals offered a microcosm of the virtually unabated price run-up they've experienced in 2025. Even after Monday's slide, gold prices remain 65% higher year-to-date, while silver is up about 150%. Gold and silver are on pace for their highest annual returns since 1979.

After last week's rally, some investors had anticipated cashing in on profits, said Louis Navellier, chief investment officer of Navallier & Associates. But most expected that to occur after the first of the year to postpone 2025 tax liabilities. The CME Group's decision likely hastened profit-taking.

Gold and other precious metals have surged for a variety of reasons this year. Geopolitical concerns and inflation worries fed by tariffs have caused investors to seek metals as a store of value. The Federal Reserve's decision to cut interest rates also made metals more attractive versus competing yield-producing assets.

In addition, concerns about rising global debt and the falling U.S. dollar contributed to the shift toward gold and other metals, particularly by global central banks. In silver, a supply squeeze and strong industrial demand exacerbated the rally late in the year.

News of the day for Dec. 29, 2025

Stock futures are ticking lower at the start of another holiday-shortened trading week after major indexes gained ground last week; gold and silver prices stepped back from recent record-high levels; shares of DigitalBridge are soaring after a report that the data center investment firm is in talks to be acquired by Japan’s SoftBank; oil prices are rising as investors weigh geopolitical tensions; and pending home sales data are due this morning. Here's what investors need to know today.

Stock futures are pointing to a slightly lower open this morning after each of the major indexes gained more than 1% last week. Futures tied to the S&P 500 and the tech-focused Nasdaq were recently down 0.3% and 0.5%, respectively, while Dow Jones Industrial Average futures slipped 0.1%. Bitcoin was at $87,300, down from an overnight high of just above $90,000. The yield on the 10-year Treasury note, which can influence a range of consumer loans, was at 4.12% recently, after closing last week at 4.13%. Stock and bond markets will be closed for the New Year’s Day holiday on Thursday.

Gold and silver prices are losing ground today after hitting all-time highs last week. Gold futures were down 1.7% at $4,475 an ounce recently, after rising as high as $4,585 on Friday. Silver futures dropped more than 3% today to $74.65 an ounce. Precious metals have hit a series of record highs this year as investors have turned to safe-haven assets to hedge against inflation, geopolitical turmoil and currency weakness.

Shares of DigitalBridge (DBRG) are soaring on a report that the data center investment firm is in talks to be acquired by Japanese tech firm SoftBank. Bloomberg reported that SoftBank could announce the deal as early as today. The deal would be the latest instance of SoftBank investing in the infrastructure used to power artificial intelligence, after it linked up with Oracle (ORCL) and OpenAI earlier this year as part of the $500 billion Stargate AI infrastructure initiative. Shares of DigitalBridge, which manages a portfolio of digital infrastructure businesses, were up about 30% in recent premarket trading. Coming into Monday's session, the stock had gained 23% so far this year.

Oil prices are rising as geopolitical tensions drive investor concerns over supply levels of the commodity. West Texas Intermediate (WTI)  futures, the U.S. crude oil benchmark, were up 2.5% at $58.15 per barrel in recent trading. The jump in oil prices comes as a meeting between President Donald Trump and Ukraine President Volodymr Zelenskyy failed to lead to agreement on a peace plan for the war in Ukraine. Political tensions between the U.S. and Venezuela have also helped push oil prices higher.

A report on November pending home sales, set for release today at 10 a.m. ET today, is among the few economic data releases scheduled during the holiday-shortened week. The housing market has been stagnant due to high home prices and elevated mortgage rates.  Tomorrow’s release of the minutes for the December meeting of the Federal Reserve will give market watchers insight into how central bankers view the economy as they contemplate additional interest rate cuts. Home pricing data and weekly jobless claims are also on tap this week.

• Analysts expect the U.S. dollar to weaken modestly in 2026 as Fed rate cuts and resilient global growth reduce demand for dollar assets.
• Despite the recent slide, the dollar remains the world’s dominant currency, with little evidence of true de-dollarization.

The U.S. dollar could see a bit more weakness in 2026, analysts say, continuing its decline after President Donald Trump’s tariff plans in April surprised markets.

The dollar weakened as much as 10% this year against a basket of foreign currencies, though it’s retraced some of those losses recently and is now down 7% year-to-date.

The drop was far from the doomsday “de-dollarization” scenarios that some floated after April—global trade and markets still rely on the U.S. dollar. It did, however, mark an end to the dollar’s steady gains over the last decade, when global investors swept into U.S. stocks and bonds and used dollars to buy them.

“We project further dollar weakness but at a slower pace than 2025, leaving the trade-weighted dollar 10% weaker by end-26,” George Saravelos, global head of FX research at Deutsche Bank. “If these forecasts materialize, they will confirm that this decade's unusually long dollar bull cycle is over.”

A weaker dollar affects travel costs, import prices, and investment returns for U.S. households and investors. Even modest declines can reshape portfolios, inflation pressures, and global trade dynamics.

There are reasons for the dollar to strengthen—after all, global investors need dollars if they want to buy U.S. tech stocks. But the world is “so heavily exposed to U.S. equities that sustaining elevated inflows will be challenging,” Saravelos wrote.

That lopsidedness could help drive investors elsewhere in the world, TD Securities analyst Jayati Bharadwaj wrote in a note to clients.

“For the USD to benefit from a strong U.S. outlook, you need the outlook for the rest of the world to materially deteriorate,” Bharadwaj wrote, adding that instead the global economy “has been resilient and held up much better than feared under tariff uncertainty.”

The weaker dollar means U.S. travelers’ money may not go as far abroad, while U.S. companies pay more to import goods. 

However, a weaker dollar is better news for U.S. exporters because their goods become cheaper abroad—in line with Trump’s priority to reduce U.S. trade deficits. Trump ultimately “needs a weaker USD to sustainably shrink the trade deficit,” Bharadwaj wrote.

The Fed’s ongoing interest rate cuts aren’t helping the dollar, since U.S. debt becomes a little less attractive when it pays less interest. The dollar may regain its luster once the Fed pauses on rate cuts, Wells Fargo Chief Economist Tom Porcelli wrote recently.

“We expect the greenback to broadly strengthen in the back half of next year as the Fed ends its easing cycle and de-dollarization talk diminishes,” he wrote.

This year’s narrative of de-dollarization mostly ended up being talk, analysts say, seeing little sign of a shift away from the U.S. dollar’s dominance in finance since the end of World War II.

“The structural foundation of dollar dominance remains intact, supported by deep and liquid markets, the global reach of U.S. financial institutions, and an unmatched supply of safe assets,” Marcello Estevão, chief economist at the Institute of International Finance, wrote in a research note.

Safer assets such as highly rated debt—which the U.S. government issues plenty of—are critical vehicles for global pension funds or insurance companies to park cash and earn some interest. There is little sign that demand is waning among private foreign investors for U.S. Treasury bonds, Estevão noted. The dollar also remains the dominant currency in global payments.

The recent rally in gold prices has stoked some talk of de-dollarization, since global central banks are increasingly holding more gold in their coffers. Still, Estevão wrote, the rise in gold prices appears to have “mechanically lifted” how large a portion gold makes up in central banks’ portfolios, chipping away at the share of their dollar assets.

The recent “gold accumulation has not come at the expense of dollar holdings” at most central banks, even if countries like China or Russia have diversified away from it, Estevão said.

There are plenty of myths surrounding the supposed de-dollarization, TD Securities’ Bharadwaj wrote. Still, she wrote, some investors may remain cautious that the dollar will weaken further, eroding the value of any U.S. dollar assets in their portfolios.

The dollar’s longstanding status as a safe haven is “strained” due to less predictable U.S. policymaking, she wrote.

“The U.S. is no longer shielded from exogenous global macro shocks but is instead the emanating source of them,” Bharadwaj wrote, flagging ongoing tariff uncertainty and Trump’s squabbles with the Fed as two risks.

Even if investors don’t react negatively, they still have a strong incentive to shield themselves against dollar weakness, Bharadwaj wrote. That’s because the Fed’s rate cuts are making it cheaper for investors to buy instruments that hedge against dollar risks, she noted.

While European investors have already done a significant amount of hedging, there's room for funds in other regions to do so, Deutsche Bank’s Saravelos wrote. It's a question that analysts are watching closely to see if more dollar weakness is ahead.

“Our conversations suggest that the hedging decisions are still in flux,” Saravelos wrote, adding that “the outlook for hedging flows errs dollar bearish.”

• "Coin roll hunters" are having a hard time getting rolls of pennies to search through now that the Mint is no longer making the coin.
• Many coin collectors hope the public discourse on the penny will inspire more people to take up the hobby.

Ryan Quinlan belongs to five banks, but he can’t he get withdrawals in the denomination he wants? Why? Because, he says, he wants pennies by the thousands.

For years, Quinlan has picked up boxes—usually containing 50 rolls, or 2,500 pennies—for “coin roll hunting,” in which he roots for rare finds like coins with wheat embossings on the back or that look like they were stamped twice. Unfortunately, it's been harder to source sealed cylinders packed with pennies since the government stopped minting them in November. 

“I had a good system down," said Quinlan, a 28-year-old software engineer currently living in North Carolina. “Despite that, I’m just not able to get pennies. It is a little sad, but I guess it’s kind of an inevitability.”

Many have lost sight of the penny’s utility in recent years. Americans have generally decided it isn’t worth sorting, carrying or using them, and the government agreed, saying it’s inefficient to spend nearly $3.70 producing each coin with some 300 billion already in circulation. Still, the penny has cultural and historical pull. Hundreds attended a memorial for the coin at the foot of the Lincoln Memorial earlier this month, according to The Washington Post.

But regard for the penny may be greatest among collectors. Coin roll aficionados are saddened that their penny-hunting days appear numbered, and the broader coin community is reflecting on the life cycle of a 232-year-old artifact. Both groups hope the recent public discourse on the coin will inspire a new crowd to start collecting. 

It may be unlikely that 2025 pennies will skyrocket in value. But if you come upon one in good condition, it wouldn't hurt to save it. The effort can't cost you more than one cent: said Charles Morgan, manager of numismatic research and programs at the Professional Coin Grading Service.

This could be a “point of enthusiasm and interest, where people come into the market that maybe weren’t collecting coins before,” said Charles Morgan, manager of numismatic research and programs at the Professional Coin Grading Service, which authenticates and grades coins. 

“They want to hold on to these objects before they disappear,” Morgan said. “At some point, although we can’t really imagine it now, pennies will disappear.”

There's already a sense that 2025 pennies, the last of their kind, may be hard to come by. Fifty-cent rolls are selling on Ebay for $10 to $20. Morgan doesn’t think buyers are getting gouged, but he doesn’t expect their value to rise exponentially in our lifetime either: Circulating coins tend to get dinged or scuffed, he said, though those in sealed rolls or otherwise carefully saved may appreciate.

Nostalgia may make the last edition of collectibles particularly valuable. Some people paid $550 for $25 worth of sealed 2025 pennies, eBay selling data shows. Collectors spent $16.8 million at an auction where 2025 pennies—including a 24 karat gold coin—were sold in packs of three. The final set, along with the dies used to stamp the pennies, sold for $800,000, according to Stack's Bowers, which ran the auction. (The Mint has said it will continue making “proof strike” pennies designed for collecting.)

Amid the hype, people are taking another look at their pocket change, said Jonathan Aminov, who owns Big Apple Coins, a rare coin shop in Manhattan. He informs callers that pennies dug up from jars and couch cushions are unlikely to be of note "almost on a daily basis," he told Investopedia.

Aminov’s store generally buys 1800s-era coins and rarely acquires modern "Lincoln" cents, and he doesn't expect his store, or other professional collectors, to change their approach.

For the most part, accumulated pennies won’t be worth more than their face value, said Morgan. But stashes started decades ago, say, by seniors may improve your chances of finding something worth more than its face value, he said. Those hunting, he said, can use The Official Red Book: A Guidebook of United States Coins and PCGS’ CoinFacts to identify whether something is rare or valuable.

Tens of thousands have subscribed to Quinlan's Youtube channel, "Quin's Coins." About 99% of the circulated coins Quinlan goes through are unremarkable, but he says sifting through them feels like a treasure hunt, and he plans to slowly go through the 2,500-penny boxes—about a dozen—he has left.

“Once those are gone, that’s probably going to be it for the pennies,” he said. “I’ll just try to move on to other denominations."

• Mortgage rates could stay high in 2026 even if the Fed cuts interest rates, limiting relief for homebuyers and businesses.
• Long-term bond yields are being driven more by inflation expectations and investor confidence than by the Fed’s short-term rate decisions.

The big question facing bond markets in 2026—and thus anyone hoping to buy a home—is whether long-term rates will stay sluggishly high even as the Federal Reserve cuts rates. 

It’s a scenario that could diminish the impact of the Fed’s rate cuts, as homebuyers hold off amid elevated mortgage rates and businesses opt against longer-term investments. It is, however, one that several analysts think may occur next year.

Those analysts foresee interest rate charts “steepening,” with long-term rates remaining high while short-term rates decline. That can happen when investors anticipate more inflation in the future, which prompts them to demand higher interest rates so that rising prices don’t erode their returns.

“The overall direction of the market is one of a consistent, grinding bull steepening trend,” wrote Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets, while acknowledging 2026 is a “year with more questions than answers.”

If long-term rates stay high, Fed rate cuts may not translate into cheaper mortgages or easier financing. For homebuyers and businesses, that could mean borrowing costs remain stubbornly expensive well into 2026.

It wouldn’t be the first time that long-term rates stay elevated or even rise despite the Fed cutting its influential interest rate. That’s more or less what’s happened since the Fed started its most recent rate cuts in September 2024. 

The Fed has now cut short-term rates by 175 basis points since then, with the latest cut occurring in December. Even so, the yield on the 10-year U.S. Treasury, a key benchmark used in mortgage rates, has risen from around 3.70% in September 2024 to around 4.15% for much of December 2025

It is the Fed’s “easing paradox,” Bob Elliott, CEO of Unlimited Funds, wrote in a commentary. The central bank can choose to cut short-term rates, but the bond market “is not complying” and driving long-term rates higher, Elliott wrote. 

“It should challenge the view of the Fed as masters of the universe when it comes to the ability to pump markets,” Elliott wrote. “Even an incremental easing step is backfiring.”

It may be because some investors are viewing the Fed as “too proactive given conditions,” he wrote, with an economy that may not need many more rate cuts.

The 10-year yield was around 4.15% for much of December and could rise more next year, wrote Padhraic Garvey, an economist at the Dutch bank ING. He sees the 10-year yield potentially hitting 4.5% by mid-year before drifting back down to around 4.25%.

“We can see upside to the 10-year yield dominating through the first half of 2026, as we see more tariff impact on prices than we’ve seen so far,” Garvey said, though he noted that inflation likely “gets tamed” later in 2026 by weaker housing markets.

That scenario assumes the Fed cuts interest rates twice next year, driving the federal funds rate to a target range of 3% to 3.25%. 

However, he also plotted out two alternative scenarios where the Fed cuts rates to around 2%—one with justification and the other without. Long-term yields would react quite differently in either case.

The first would require recession-like conditions, giving the Fed ample reason to cut rates further to stimulate the economy. Bond markets would accept those actions and the 10-year yield could go down to 3%, over a whole percentage point from today’s levels.

The other scenario is cutting without reason, such as President Donald Trump’s selection of Fed Chair Jerome Powell’s replacement causing the Fed to swing “super dovish.” Under that scenario, the Fed would cut rates “far in excess of what's required in an attempt to juice the economy in good time for the midterm elections.”

“While Treasuries love rate cuts, they won't like them much given this cocktail,” Garvey wrote, citing the rising risk of an inflation resurgence and markets protesting the Fed’s tarnished credibility.

“We prefer our base view, as it’s the most likely,” he wrote. “It’s also, by definition, more likely than either of these alternative parallel universes, both of which are quite troubling.”

However your trades performed in 2025, you can restart the clock in just a few days.

Jobless claims, Fed meeting minutes and pending home sales data will highlight another holiday-shortened week as traders get a day off for the New Year’s Day holiday on Thursday. While bond markets will close early at 2 p.m. on Wednesday, stock markets are operating a normal schedule on New Year’s Eve.

The first session of 2026 is on Friday, following a year where stocks turned around an April swoon to set major indexes on a path to close higher by double digits. History shows that strong trading in December and January can set the tone for investors; analysts expect another roller-coaster year for stocks is in store. 

Read on for our calendar of key events this week—and one more thing.

There are no significant corporate earnings on tap for this week, though investors may watch for the release of a few economic indicators and other reports.

On Tuesday, the minutes for the December meeting of the Federal Open Market Committee (FOMC) will provide insight into how Fed members view the trajectory of the economy ahead of its next meeting in late January. The weekly jobless claims report, due Wednesday, will shine a light on the labor market as the Fed keeps a close eye on jobs as it considers its next move on interest rates. The U.S. economy likely lost an average of 20,000 jobs per month between April and September.

Pending home sales for November is due Monday, giving a look at future sales levels in a housing market struggling with affordability. But the S&P Case-Shiller home price index, due the following day, arrives as home price growth slows as buyers show signs of reaching their limits.

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Monday, Dec. 29

• Pending home sales (November)

Tuesday, Dec. 30

• S&P Case-Shiller Home Price Index (October)
• Chicago Business Barometer (December)
• December FOMC meeting minutes

Wednesday, Dec. 31

• Initial jobless claims (Week ending Dec. 27)
• U.S. bond markets close at 2 p.m. ET

Thursday, Jan. 1

• New Year’s Day holiday

Friday, Jan. 2

• None scheduled

Twenty-two states will raise their minimum wage this year, with 19 of them set to make the change on New Year’s Day. Investopedia’s Sabrina Karl has more on where the minimum wage is going up this year—and where it isn’t.

Ring out, wild bells—especially those that mark the opening and closing of markets.

The final days of 2025 are upon us, and with them come the last set of trading holidays now that the Christmas break is in the rear-view mirror.

Stock traders have a full day on New Year's Eve, but bond trading ends at 2 p.m. on Wednesday, Dec. 31. Both stock and bond markets are closed on Jan. 1, 2026, for New Year's Day.

Those will be the last adjustments to regular trading before Monday, Jan. 19, when both stock and bond markets will be closed for Martin Luther King Jr. Day.