December 2025 Market Commentary

As 2025 drew to a close, both the S&P/TSX Composite and S&P 500 delivered a strong finish, each ending the year within range of our forecasts—31,500 for the TSX and 7,000 for the S&P 500. Markets navigated a landscape colored by geopolitical uncertainty, including ongoing trade tensions, shifting global alliances, and periodic headlines around tariffs and supply chain disruptions. Despite these challenges, Canadian equities were buoyed by a surge in materials, steady gains in financials, and ongoing support from energy, with standout performers like Celestica, Aritzia, and Finning capturing the spotlight.

In the U.S., the S&P 500 saw leadership from financials, communication services, and materials, with Micron Technology and several consumer names posting impressive gains. The technology sector, and AI in particular, remained a focal point for both optimism and concern. While headlines often highlighted regulatory scrutiny and questions about the pace of innovation, the reality on the ground was clear: demand for AI and related technologies continued to outstrip supply, driving growth and fueling investor enthusiasm.

Macroeconomic conditions provided a constructive backdrop. Canadian inflation eased to 1.8% and the Bank of Canada held rates steady, while the U.S. Federal Reserve cut rates for the third time in 2025, supporting markets as inflation cooled and employment remained steady. Through it all, disciplined strategies and sector diversification paid off for investors.

Looking ahead to 2026, the market’s momentum and underlying economic strength offer reasons for optimism. The ability of both indices to close the year near our targets, despite a challenging environment, underscores the resilience of the market and the value of staying the course. We remain positive as we enter the new year, confident that opportunities for growth and portfolio success remain firmly in place.

If you would like to receive a full copy of our December 2025 market commentary, please email us at msbwealth@nbpcd.com