The final month of 2025 begins on a negative note after stocks ended November with a startling rally.
All three main U.S. equity market indexes closed lower on Monday amid a continuing sell-off for bitcoin and stocks leveraged to digital assets, as well as tepid economic data. History suggests better things are ahead, at least for the S&P 500, with investors, traders and speculators looking forward to another rate cut by the Federal Reserve.
“The S&P 500 clawed its way back from nearly a 5% intra-month drawdown to finish November with a modest 0.1% gain,” LPL Financial Chief Technical Strategist Adam Turnquist writes, citing oversold conditions, solid earnings, renewed AI optimism, and repricing of rate-cut expectations at the next Fed meeting as fuel for the rebound.
According to Turnquist, momentum from late November indicates good things for December. “Historically, since 1950, the S&P 500 has averaged a 1.4% gain in December and finished higher 73% of the time.” That’s the strongest positivity rate of any month. “However,” the analyst adds, “December’s strength typically emerges in the second half of the month.”
The Institute for Supply Management (ISM) said its Manufacturing Purchasing Managers Index (PMI) declined to 48.2% in November from 48.7% in October. According to ISM, a Manufacturing PMI above 42.3% over a period of time generally indicates economic expansion.
“Although December’s headline was somewhat softer than expectations,” Barclays economist Jonathan Millar writes, “we do not view the miss as especially meaningful.”
Millar notes that the ISM print “was more downbeat than the competing S&P Global Manufacturing PMI,” which declined to 52.2% in November from 52.5% in October. The “breakeven” level for the S&P PMI is about four points higher than the ISM threshold, the economist says, though “both point to flat manufacturing.”
The main event on this week’s economic calendar is the delayed release of September Personal Consumption Expenditures Price Index (PCE) data. The Fed prefers core PCE over the Consumer Price Index (CPI) to measure price stability.
It is late, but it’s the best inflation data we have heading into the next Fed meeting. CME FedWatch reflects an 87.6% probability the Federal Open Market Committee will cut interest rates by 25 basis points next week.
At the closing bell, the broad-based S&P 500 was down 0.5% at 6,812, the blue-chip Dow Jones Industrial Average had shed 0.9% to 47,289, and the tech-heavy Nasdaq Composite was off 0.4% at 23,275.
Coinbase Global (COIN, -4.8%) makes the list of the riskiest S&P 500 stocks right now because of days like Monday. “Bitcoin (BTC) bounced from $82,000 to approximately $92,000 and then lower again today at $86,000,” Bernstein analyst Gautam Chhugani observes. “This price action suggests weak market sentiment, which has impacted digital asset equities.”
Chhugani notes that COIN is down more than 20% over the last 30 days, and Robinhood Markets (HOOD, -4.1%) is down more than 10%. “However, unlike previous crypto corrections,” he adds, “operating businesses look strong and only signs of speculative excess appear in the long tail of Strategy (MSTR, -3.3%) copycats.”
The analyst suggests market concerns about MSTR, which is explicitly a bitcoin stock and was down as much as 12.2% on Monday, are overstated: “There is no realistic scenario which threatens the longevity of MSTR.” Strategy revealed in a regulatory filing on Monday that it purchased 130 bitcoin from November 17 through November 30.
In addition to updating its BTC holdings, Strategy announced the establishment of a $1.44 billion U.S. dollar reserve fund “to support the payment of dividends on its preferred stock and interest on its outstanding indebtedness.”
Management also revised its fiscal year 2025 guidance to reflect a year-end bitcoin price in a range of $85,000 to $110,000 versus a prior estimate of $150,000.
Meanwhile, Chhugani concludes, “Coinbase is executing hard on its ‘everything exchange’ vision.” The analyst expects management to announce the launch of two major products on December 17, including tokenized equity trading and the introduction of prediction markets on its primary platform.
It will compete with Robinhood, which “continues to aggressively diversify from its equity trading business into crypto, tokenized equities and prediction markets” as the crypto exchange business model and the broker-dealer business model converge.
“Coinbase wants its users to trade crypto, equity and prediction markets on the same platform,” the analyst concludes.
Nvidia (NVDA, +1.7%), incidentally, is bigger in market cap terms than the entire universe of cryptocurrencies – bigger than bitcoin plus ethereum, as well as all the other altcoins combined.
The leader of the AI revolution added another $72 billion to its total value after it announced a $2 billion investment in electronic design automation software maker Synopsys (SNPS, +4.9%).
“The complexity and cost of developing next-generation intelligent systems demands engineering solutions with a deeper integration of electronics and physics, accelerated by AI capabilities and compute,” Synopsys CEO Sassine Ghazi said in a statement. “No two companies are better positioned to deliver AI-powered, holistic system design solutions than Synopsys and Nvidia.”
