💤 December Opens with a Reality Check as Markets Hit the Snooze Button

Welcome to December, where apparently Santa's bringing red candles instead of presents

Author

Jason Paloma
December 01, 2025 • Estimated Reading Time: 15 minutes

😎 Market Vibes

💤 December Opens with a Reality Check as Markets Hit the Snooze Button

Welcome to December, where apparently Santa's bringing red candles instead of presents. U.S. stock futures are nursing a hangover this morning, with S&P 500 futures down around 0.6%, Nasdaq futures sliding 0.7%, and the Dow shedding about 0.4% as traders ease into the final month of 2025. It's the market equivalent of showing up late to a party you didn't really want to attend anyway.

The culprits? Take your pick. Bitcoin's doing its best Titanic impression below $86,000, Treasury yields are creeping higher near 4.04%, and the Magnificent Seven tech stocks are giving back some of last week's gains like they just remembered their New Year's resolutions about "moderation." Nvidia, Meta, and Tesla are all down more than 1% in premarket trading, proving that even AI darlings need their beauty sleep.

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🥗 Bitcoin's December Diet: Down 32% from Its October High and Still Dropping

Speaking of assets having a rough Monday, Bitcoin kicked off December by faceplanting below $86,000 - a stark contrast to its October glory days above $126,000. That's a 32% haircut in just six weeks, which in crypto terms is basically a "healthy correction" and in normal-person terms is "holy crap, what happened?"

The selloff isn't just Bitcoin being Bitcoin. A perfect storm hit the crypto markets: the Bank of Japan dropped some hawkish comments that spooked global risk appetite, a DeFi hack at Yearn Finance drained about $9 million, and Bitcoin ETFs hemorrhaged $3.48 billion in outflows during November. Oh, and let's not forget the algorithmic trading bots that apparently woke up this morning and collectively decided to ruin everyone's Monday by clearing out long positions between $90,000 and $86,000.

The silver lining? The Federal Reserve officially ended its balance sheet runoff today, wrapping up quantitative tightening after shrinking holdings by over $2.2 trillion since 2022. Some strategists are calling this the start of a new "liquidity super-cycle," though Bitcoin's current price action suggests the memo hasn't arrived yet.

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💪 Gold Holds Strong Above $4,200 While Oil Gets an OPEC+ Boost

While digital assets are getting destroyed, the OG safe haven is doing just fine, thank you very much. Gold opened Monday trading around $4,242 per ounce, up 0.58% and sitting pretty about 60% higher than this time last year. The yellow metal has been on an absolute tear in 2025, up roughly 26% in the first half alone, fueled by a weaker dollar, geopolitical anxiety, and central banks hoarding the stuff like it's going out of style.

Gold's resilience is particularly impressive given that real yields are hovering above 1% - historically, that's supposed to be kryptonite for non-yielding assets. But when confidence in traditional safe havens like Treasury bonds gets wobbly, gold becomes the friend who actually shows up when you need them.

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📉 The Magnificent Seven Lose Their Shine (At Least for Today)

Tech's biggest names are having a forgettable start to December, with the usual suspects leading the retreat. Nvidia is down 1.5% in premarket trading despite announcing a strategic investment in Synopsys (which is up 7% on that news - funny how that works). Tesla, fresh off reporting declining car registrations in France (down 58%) and Denmark (down 49%) for November, is also nursing losses this morning.

The broader tech selloff comes as investors digest November's performance, which saw the Nasdaq Composite snap a seven-month winning streak by dropping 1.5%. Concerns about AI stock valuations reached a crescendo during the month, with the tech-heavy index at one point down nearly 8% from its October close before staging a late-month recovery.

But here's the twist: Peter Thiel apparently didn't get the "diamond hands" memo. The billionaire PayPal co-founder's fund sold 208,000 Tesla shares ($72 million) and completely exited a 538,000-share Nvidia position ($94 million) during Q3, rotating into the more "boring" plays of Apple and Microsoft instead. When one of Silicon Valley's smartest investors pivots to defense, markets pay attention.

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🗓️ Economic Calendar: Manufacturing Data Kicks Off a Busy Week

If you thought December would be sleepy, think again. Today's U.S. economic docket includes the S&P Global Manufacturing PMI Final and the ISM Manufacturing Index for November, giving traders their first look at industrial activity for the month. Spoiler alert: expectations aren't exactly robust.

The bigger prize comes Friday with the Personal Consumption Expenditure (PCE) price index - the Fed's preferred inflation gauge. With over 85% of market participants pricing in a 25-basis-point rate cut at the December 10 FOMC meeting, this week's data will be scrutinized like a celebrity prenup. Any surprises could shift those odds faster than you can say "dot plot."

Also on the radar: Canada reported better-than-expected Q3 GDP growth, the Bank of Canada recently cut rates, and OPEC+ just rallied the oil market with production discipline. It's a reminder that while U.S. markets might be feeling cautious, other corners of the global economy are showing signs of life.

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📊 Seasonality vs. Reality: December's Track Record Faces 2025's Volatility

Here's the good news: December is historically the third-best month for the S&P 500, averaging gains of more than 1% dating back to 1950. Here's the bad news: 2025 hasn't exactly been following the seasonal script. November was supposed to be strong, too, and instead the market spent most of it questioning AI valuations and dealing with geopolitical curveballs.

Wall Street strategists are split on whether the fabled "Santa Claus rally" will show up this year. Fundstrat's Mark Newton noted that last week's sharp rebound "has helped market breadth to begin to rebound after a difficult early part of November," suggesting the equity market is "growing more comfortable" with December rate-cut expectations. Others, however, point to elevated valuations, persistent inflation concerns, and the fact that November just saw the Nasdaq break a seven-month winning streak.

Translation: December could go either way, which is basically what every market forecast boils down to when you strip away the fancy charts and analyst-speak.

🎬 Bottom Line

December opened with markets in a defensive crouch - futures red, Bitcoin bruised, and tech stocks giving back gains. But zoom out and the setup isn't all doom and gloom. The Fed's ending quantitative tightening, rate cuts are still on the table, and gold's holding north of $4,200 like a boss. Volatility? Sure. Also sure. Just don't expect this month to hand you anything on a silver platter. Or a gold one. Or even a crypto one.

🔥 What’s Heating Up This Week

Markets are moving - here's whats heating up with our partners:

✌️ Thanks for vibing with us.

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