Stocks enter final stretch of 2025 just off record highs: What to watch this week

Market Performance - The tech-heavy Nasdaq Composite rose about 0.4% for the week, while the Dow Jones Industrial Average fell about 0.7%, and the S&P 500 closed little changed [1] - All three major indexes are within 3% of their record highs as they enter the final seven trading sessions of 2025 [1] Consumer Sentiment - American consumers are entering the holidays with less joy compared to last year, with the University of Michigan's consumer sentiment index at 52.9, which is 28.5% below last December's reading [4] - The K-shaped economy narrative is significant, indicating a divide among American shoppers, with affluent households thriving while lower-income households face challenges [6][7] Housing Market - Housing sales increased for the third consecutive month in November, but 2025 sales are projected to finish at a 25-year low according to the National Association of Realtors [5] Consumer Spending - Consumer spending has remained stable in the latter half of the year, primarily driven by households in the upper third of incomes, while about a quarter of households are living paycheck to paycheck [6] Inflation Data - The November inflation reading showed a 2.7% increase in prices over the last 12 months, significantly below expectations, which may encourage the Federal Reserve to consider further rate cuts in the upcoming year [8]