Stocks close higher as defensives lead; VIX sinks into close

End-of-Day Market Wrap: Friday, December 26, 2025#

The tone that took hold by midday—steady gains with a defensive tilt—carried through to the closing bell, leaving major U.S. indexes marginally higher as investors favored cash-flow reliability and yield. According to Monexa AI, the ^SPX finished at 6,932.05 (+0.32%), the ^DJI closed at 48,731.16 (+0.60%), and the ^IXIC ended at 23,613.31 (+0.22%). Volatility compressed into the close, with the ^VIX down to 13.47 (-3.79%), near its year low, while small-cap volatility also eased as the ^RVX slipped to 18.13 (-1.57%). Sector leadership skewed toward Consumer Defensive, Utilities, and Communication Services, with Energy the notable weak spot at the stock level even as the sector’s headline read hovered near flat.

Closing Indices Table & Analysis#

Into the afternoon, the market leaned into a measured risk-on stance anchored by defensives and high-quality cyclicals. Breadth improved as banks climbed and megacaps stayed steady, while semiconductors showed selective strength and pockets of cloud software lagged. The ^SPX notched new year-to-date highs intraday before settling slightly below the session peak, consistent with a late-December pattern that has seen the index challenge record territory this week. According to Monexa AI’s prior headlines, the benchmark set fresh records in holiday-shortened trade earlier this week as sentiment stayed resilient around macro stability and AI-led capex themes.

Macro Analysis#

Late-Breaking News & Economic Reports#

Global rates context remained supportive into the U.S. close. Japan government bonds edged higher as investors digested Tokyo inflation data, a reminder that disinflation progress isn’t linear but the trend has cooled from 2024 peaks. Monexa AI’s news feed flagged the move in JGBs following the Tokyo CPI print, a benign backdrop for duration-sensitive assets into year-end. In the U.S., weekly labor metrics earlier in the week continued to signal a “no hire, no fire” environment as initial claims declined by 10,000, a modest but directionally supportive datapoint for soft-landing narratives (Monexa AI). Seasonal factors also matter here: the so-called Santa Claus period is underway and has historically skewed positive into the first two days of January, a context that’s been echoed in multiple outlets this week (Monexa AI; see also Bloomberg seasonality coverage).

Regulatory currents were an important subtext, particularly in tech. European scrutiny of platform power and data practices stayed in focus after Italy’s competition authority ordered META to suspend certain WhatsApp terms involving rival AI chatbots, part of an evolving enforcement regime under the EU’s Digital Markets Act. Recent reporting underscores that the DMA can carry fines and daily penalties for non-compliance, implying ongoing compliance costs and potential product adjustments in 2026 (Reuters; Financial Times. While today’s tape didn’t hinge on a single macro catalyst, the combination of subdued volatility, supportive global rates, and limited data flow into a holiday Friday invited steady accumulation of quality equities.

Sector Analysis#

Sector Performance Table#

Monexa AI’s sector scoreboard at the close shows Consumer Defensive (+1.20%), Utilities (+0.81%), and Communication Services (+0.51%) out front, a defensive-income bias that has characterized the afternoon advance. Notably, there is a discrepancy between the closing sector print for Real Estate and the stock-level performance within REITs. Monexa AI’s heatmap flagged broad REIT strength—with PLD +1.08%, PSA +1.02%, DLR +0.85%, and INVH +1.60%—which is inconsistent with the sector table’s +0.00%. Given the constituent-level gains across large, liquid REITs, we prioritize the stock-level evidence and treat the Real Estate sector’s flat reading as likely an incomplete or stale rollup. The narrative from price action is clear: rate-sensitive income vehicles were bid into the close as long-end yields stayed contained.

Across defensives, the leadership was unmistakable. In staples and discount retail, TGT +2.36%, COST +2.00%, and DLTR +2.07% paced gains, while WMT +0.64% and KO +0.34% helped consolidate the move. Utilities likewise saw broad-based advances, with NRG +1.55% and D +1.50% among the day’s top performers. Communication Services outperformed, aided by cable and agencies: CMCSA +1.36%, CHTR +1.55%, and OMC +1.59%. The large ad-driven platform cohort was mixed to positive, with META +0.39% offsetting a near-flat GOOGL -0.08%.

Energy was the outlier on breadth, even as the sector line item finished nearly unchanged. The constituents told the story: EQT -1.16%, COP -1.00%, and XOM -0.07% were soft, while solar leader FSLR +1.05% bucked the trend. The divergence arguably reflects commodity pressure and profit-taking into year-end rather than a fundamental re-rating; either way, the sector remains the most fragile leg of the tape in the last hour.

Company-Specific Insights#

Late-Session Movers & Headlines#

The most visible single-name momentum belonged to NKE +4.64%, which vaulted within Consumer Cyclical and helped buffer otherwise mixed discretionary performance. Holiday spending headlines remained firm around mass merchants and clubs, and the leadership in staples-discount retail added ballast to the broader market tone, with COST +2.00% and TGT +2.36% carrying through into the close. The megacap complex was largely supportive but subdued: AAPL +0.53%, MSFT +0.24%, and AMZN +0.10% netted a positive drift that reinforced the ^SPX’s late-session resilience.

Semiconductors continued to bifurcate. MU +3.77% led memory on the day, consistent with a medium-term narrative of improving data center and AI-driven demand. By contrast, NVDA -0.32% eased modestly and MRVL -1.36% slipped despite ongoing AI-infrastructure positioning. The mixed close for AI-adjacent semis underscores that stock selection—not blanket theme exposure—drove alpha into the close. In software and observability, DDOG -2.26% was a clear laggard, a reminder that premium multiple names remain sensitive to even small shifts in rate and growth expectations.

Banks and diversified financials were constructive as the curve backdrop steadied, with C +1.81%, MS +1.20%, JPM +0.99%, and BAC +0.50% all closing higher. Within crypto-adjacent equity, COIN -1.06% lagged, a notable divergence from the broader financials complex and a micro read on risk appetite that leaned more selective than speculative. In healthcare, breadth was healthy with MRK +1.34%, JNJ +0.97%, UNH +0.86%, and MRNA +1.42% providing steady ballast. Among industrials, BA +0.60%, HON +0.73%, LMT +0.66%, and CSX +0.52% reflected persistent, if measured, interest in quality cyclicals.

On the news front, research flow after the holiday break skewed toward 2026 positioning. Baird trimmed its price target on META, citing near-term sentiment risks but retaining an Outperform view tied to product and AI catalysts (Monexa AI; see also Bloomberg and Reuters for broader Meta coverage). Evercore ISI named LYV its top media pick for 2026, lifting the target as earnings visibility around Venue Nation improved (Monexa AI). Truist raised its target on CYTK following approval of MYQORZO and modeled a launch ramp beginning early 2026 (Monexa AI). RBC boosted ROL on the back of a consistent growth and margin profile, a read-through consistent with today’s staples-led tone (Monexa AI). Lake Street raised its target on DAVE as credit and monetization improved; the stock closed +3.47%, and management’s BNPL card plans could broaden its TAM into 2026 per the note (Monexa AI). In housing, KBH was downgraded at Raymond James to Market Perform tied to a pivot back to build-to-order amid competitors’ inventory clearance via rate buydowns, a tactical risk to share and margins into 2026 (Monexa AI). Within data centers, B. Riley cut its target on WhiteFiber while maintaining a Buy after the company announced its first long-term co-location agreement at NC-1; WYFI -1.53% reflected the cautious stance even as execution milestones were acknowledged (Monexa AI).

Regulatory developments also intersected with today’s winners. Recent EU moves around messaging platform rules and DMA enforcement raise real cost and product-roadmap implications for META heading into 2026, even as the company’s AI investments expand. Meta has guided to sharply higher AI-related capex into 2026, signaling that monetization beyond ads—via AI services, models, and possibly hardware—will be key to returns on that spend (Reuters. That backdrop helps explain why Communication Services outperformance is increasingly nuanced: ad agencies and cable rose cleanly today, while large platforms saw a more mixed but still positive close.

Extended Analysis#

End-of-Day Sentiment & Next-Day Indicators#

The most important signal into the close was the compression in volatility. With the ^VIX at 13.47 (-3.79%) and the ^RVX at 18.13 (-1.57%), the options market reflected a benign view of near-term downside risk, consistent with seasonal tendencies and the day’s defensives leadership. Put simply, investors preferred to pay up for stable cash flows and visible dividends in the afternoon, rotating into staples, REITs, and utilities, while keeping a bid under select financials and industrials. This posture aligns with the global rates backdrop, including softer Japanese yields after Tokyo CPI, and suggests investors are positioning for a low-drama end to the year rather than chasing speculative beta.

Under the surface, the bifurcation within technology is still the tape’s defining theme. MU rallied as investors leaned into the data center and memory upcycle; meanwhile MRVL slipped despite ongoing AI-optics positioning and headlines about AI infrastructure expansion. The market continues to discriminate between clear 2026 catalysts and stories more dependent on valuation and sentiment. Cloud and observability, represented by DDOG -2.26%, reminded investors that premium software names remain vulnerable when factor winds shift even slightly.

In Energy, constituent-level weakness argues for caution into after-hours and the next session. The pairing of E&P softness—EQT -1.16%, COP -1.00%—with a modest decline in XOM -0.07% suggests either commodity follow-through or profit-taking rather than a narrative break. The sector’s headline close near flat should not obscure the negative breadth. For the next trading day, stabilization in bellwethers like XOM and CVX (not shown) would be an important tell for whether Energy’s underperformance is transient.

Financials’ steady bid remains a constructive cross-check on macro sentiment. Gains in JPM, MS, BAC, and C into the close signal that credit fears are not rising and that the curve backdrop is workable for the group. With volatility suppressed and defensives in favor, that combination tends to produce a grind-higher in the index unless a new macro shock emerges.

Looking beyond today’s tape, investors are calibrating 2026 narratives around AI and regulation. Coverage and analysis compiled by Monexa AI highlight that Meta’s 2026 capex and operating expense trajectory will be materially influenced by AI infrastructure, with management explicitly pointing to new AI-driven revenue streams beyond advertising to justify the spend (Meta investor update; Reuters. For portfolio construction, that means keeping a discriminating eye on which AI-exposed names present tangible, near-term monetization pathways versus those that still rely on top-down thematic enthusiasm.

Conclusion#

Closing Recap & Future Outlook#

From midday to the bell, the session matured into a measured, defensives-led advance. According to Monexa AI, the ^SPX closed at 6,932.05 (+0.32%), the ^DJI at 48,731.16 (+0.60%), and the ^IXIC at 23,613.31 (+0.22%). Volatility fell sharply, with the ^VIX down to 13.47 (-3.79%), as investors favored staples, REITs, and utilities. The Energy complex weakened at the constituent level, and Technology remained two-speed—memory and select semis up, cloud software mixed to lower. Banks firmed into the close, another sign that markets are comfortable with the current macro glidepath.

For after-hours and the next trading day, the actionable focus is straightforward. First, watch whether Energy stabilizes in bellwethers to prevent the sector from becoming a broader drag on cyclicals. Second, within Technology, maintain selectivity: names with clear 2026 catalysts such as memory and AI-infrastructure leaders have continued to earn a bid, while premium software remains factor-sensitive. Third, monitor defensives: today’s leadership in Consumer Defensive (+1.20%), Utilities (+0.81%), and REITs suggests the market is paying for reliability into year-end; sustained strength there would corroborate the low-volatility message coming from the options complex. Macro-wise, the global rates tone—as reflected in JGBs post-Tokyo CPI—and the restrained jobless-claims backdrop continue to support soft-landing expectations without forcing a chase in high-beta assets (Monexa AI; Reuters.

As this holiday week winds down, the tape is telling investors to stay disciplined and stay selective: participate in the income-led rally where the data are most supportive, keep Energy on a short leash until the breadth improves, and treat AI as a stock picker’s game rather than a monolith. With volatility suppressed and breadth positive, the default path remains constructive into the final sessions of the year—so long as leadership continues to rotate through quality rather than narrowing into a handful of expensive winners.

Key Takeaways#

The market closed with a mild, defensives-led bid; the ^SPX finished at 6,932.05 (+0.32%) and the ^VIX sank to 13.47 (-3.79%). Monexa AI’s sector table shows Consumer Defensive (+1.20%), Utilities (+0.81%), and Communication Services (+0.51%) leading, while Energy breadth lagged despite a flat sector print. REITs posted broad gains—PLD +1.08%, PSA +1.02%, DLR +0.85%, INVH +1.60%—highlighting a potential discrepancy with a flat Real Estate sector rollup; we prioritize the constituent data. Company-wise, NKE +4.64%, COST +2.00%, and MU +3.77% were standouts, while DDOG -2.26% and Energy producers declined. For positioning, the data argue for participation in defensives and income, selectivity in AI and semis, and tactical caution in Energy until breadth stabilizes.