December 2025 Paramount Associates Wealth Management Newsletter: Market Volatility, Fed Signals, and Portfolio Strategy

December 2025 Market Commentary

By the Wealth Advisors at Paramount Associates Wealth Management of Greenwood Village, Colorado

This December 2025 investment update from Paramount Associates Wealth Management of Greenwood Village reviews a volatile week in the markets, shifting Federal Reserve expectations, earnings trends, consumer behavior, and global investment developments. As a Greenwood Village-based wealth management firm serving South Metro Denver, our focus is on helping clients understand how short-term market movements connect to long-term portfolio management and financial planning decisions.

Last Week: Momentum Breaks and Markets Reprice Risk

Last week marked a noticeable shift in market tone. After months of strong momentum, equity markets encountered a combination of delayed economic data, shifting labor trends, and growing skepticism around the idea that artificial intelligence alone can offset broader economic slowing. Once the government reopened, investors finally received long-delayed September labor data showing unemployment rising to 4.4%, the highest level in four years, while continuing jobless claims reached a new cycle high.

Although jobs were still added, the underlying trend weakened. Equity markets responded accordingly, with the S&P 500 declining nearly 2% for the week. Technology stocks led the downturn, falling approximately 4.7%, followed by Consumer Discretionary at 3.3% and Energy at 3.1%. Even semiconductors came under pressure, despite strong earnings from Nvidia, illustrating that crowded momentum trades can unwind quickly when sentiment shifts.

The most surprising development came late in the week from the Federal Reserve. After weeks of hawkish messaging, New York Fed President Williams offered a more dovish signal, providing markets with a brief rebound. The week ultimately reflected factor rotations, unwinding of crowded positions, and a reminder that even powerful themes like AI are not immune to valuation and economic realities.

Sector Performance and Market Leadership

The S&P 500 sector performance during the week highlights a clear reversal from prior leadership. Technology and Consumer Discretionary—two areas closely tied to growth expectations—experienced the sharpest declines, while more defensive sectors began to quietly stabilize. For investors working with a Greenwood Village wealth advisor, this underscores why portfolio construction must account for both momentum and downside risk, particularly during late-cycle environments.

This Week: A Heavy Dose of Economic Data

With a shortened holiday trading week, markets are absorbing a large volume of economic data in a compressed timeframe. Retail sales, Producer Price Index data, consumer confidence, pending home sales, and the Federal Reserve’s Beige Book are all scheduled early in the week. Additional releases include updates on GDP, PCE inflation, durable goods orders, and weekly jobless claims.

Earnings reports from companies such as Best Buy, Dell, HP, Urban Outfitters, and Deere will also provide insight into consumer behavior and corporate capital spending. These companies sit at critical points in the consumer and enterprise spending cycle, making their results particularly relevant for understanding broader economic momentum heading into year-end.

The Consumer: Resilient but More Selective

Recent retail earnings suggest the U.S. consumer is adjusting rather than retreating. Target reduced prices to remain competitive, impacting margins but sustaining traffic. Home Depot moderated its outlook as demand for large purchases normalized after several unusually strong years. Walmart continued to post steady results, driven by essentials and value-focused spending trends.

Notably, even higher-income households—long a source of spending resilience—are showing greater mindfulness as the year closes. For clients of Paramount Associates Wealth Management in Greenwood Village and surrounding communities, this evolving consumer behavior supports a more balanced view of discretionary spending rather than an outright slowdown.

Earnings: Strong Results, but a Transition Ahead

Third-quarter earnings exceeded expectations across much of the market. S&P 500 revenue growth reached approximately 8.4%, the strongest in three years, while earnings growth approached 13.4%. Net profit margins climbed to roughly 13.1%, the highest level since 2009.

Health Care, Financials, and Consumer Discretionary delivered notable upside surprises, while mega-cap technology companies continued to post solid results. At the same time, market focus has shifted from near-term earnings beats to longer-term questions around investment cycles, particularly in artificial intelligence. As growth expectations moderate, markets are increasingly rewarding quality, durable cash flow, and balance-sheet strength.

Global Watch: China Re-Enters the Conversation

Beyond U.S. headlines, global markets are beginning to show signs of rotation. Foreign investors are returning to Chinese equities for the first time in several years, driven in part by renewed interest in artificial intelligence developments abroad. Capital inflows into China from January through October reached approximately $50 billion, the highest level in four years, with mainland investors also directing capital into Hong Kong.

While this does not yet signal a broad global recovery, it represents a meaningful shift in emerging-market dynamics that could influence global asset allocation decisions heading into 2026.

Portfolio Strategy Perspective from Greenwood Village Wealth Advisors

For investors in Greenwood Village, Centennial, Castle Pines, and the broader South Metro Denver area, the current environment emphasizes balance over prediction. Strong earnings, shifting consumer behavior, evolving AI narratives, and Federal Reserve uncertainty all reinforce the importance of diversification, quality assets, and disciplined portfolio management.

At Paramount Associates Wealth Management of Greenwood Village, we continue to focus on long-term financial planning, portfolio resilience, and evidence-based investment strategy designed to navigate both market volatility and opportunity.

— Scott Tremlett, CEO and Chief Investment Officer

Investment Advisory Services provided by Paramount Associates Wealth Management, LLC