Holiday-Thinned Stocks Rise as Metals Rally

In holiday-thinned trading in the U.S. and Asia, risk assets stayed buoyant while precious metals dominated the tape. According to record U.S. closes, the Dow finished at 48,731.16 (up 0.6%) and the S&P 500 ended at 6,932.05 (up 0.3%) ahead of the Christmas break. In Asia, a year-end bid carried regional benchmarks higher, with Reuters noting MSCI’s broad Asia-Pacific index up about 0.4% on Friday and roughly 25% year to date amid light liquidity.

Precious metals, not equities, provided the real momentum. Reuters reported spot gold at about $4,503/oz and silver up roughly 158% year to date as investors sought hedges against policy uncertainty and debt concerns. Separately, CNBC flagged spot silver hitting an all-time high of $74.89/oz (up more than 4% on Friday) as risk sentiment stayed jittery around an AI-bubble narrative and unclear Fed timing.

What’s driving the divergence is a familiar mix of catalysts. Investors are balancing:

• Expectations for at least two Fed cuts in 2026, but likely not before mid-year, per Fed pricing commentary.
• Thin holiday liquidity, which tends to amplify moves and trend-following behavior.
• Demand for inflation and currency-debasement hedges, a key support behind the metal rally.

For investors, the setup is less about chasing a late-December melt-up and more about watching whether leadership broadens beyond tech and defensive hedges. If equities keep printing records while metals keep screaming higher, that’s a sign positioning is conflicted, not confident, and it can flip quickly when January volume returns.

The U.S. economy is expanding fast, but the labor market is not sharing the upside. A shutdown-delayed government report showed Q3 GDP running at an annualized 4.3%, while the unemployment rate has climbed to 4.6%, the highest since 2021, creating what some economists call a “jobless boom.” Business Insider described how growth and jobs decoupled as firms invest in AI and productivity while holding headcount steady through hiring freezes and selective layoffs.

Consumers are still spending, but increasingly without the psychological tailwind of job security or real income momentum. CNBC’s recap of the GDP release highlighted that consumer spending rose 3.5% in Q3, while holiday retail spending increased 4.2% this season and 37% of Americans took on holiday debt averaging $1,223. Meanwhile, CNN reported essentials inflation remains painful for many households, citing year-over-year increases including electricity up 7%, natural gas up 9%, and coffee up 19%, even as gasoline fell to about $2.86 per gallon.

Under the hood, near-real-time labor data is sending mixed signals. Initial jobless claims fell to 214,000 for the week ending Dec. 20, but continuing claims rose to 1.92 million, according to Labor Department data. That combination suggests layoffs are still low, but displaced workers may be taking longer to land new jobs, consistent with a slower hiring engine.

Likely next steps center on revisions and policy response. Moody’s Mark Zandi has warned that the GDP strength is fragile without job creation, and Fed officials have already signaled concern that jobs data may be weaker than it looks. Readers should treat “strong GDP” headlines cautiously until payrolls and wage growth re-accelerate. Positioning for 2026 should prioritize sectors and companies that can grow earnings with flat headcount, because that appears to be the operating model firms are betting on.

Corporate America is leaning hard into “do more with less.” That’s lifting output while keeping hiring muted, a shift that explains why the economy can post a strong 4.3% GDP print while unemployment sits at 4.6%. Business Insider reported that AI investment drove growth, even as many large firms associated with that spending have also led white-collar cuts. The result is a labor market that feels tighter for job seekers than the topline macro data suggests.

The wage outlook for 2026 is consistent with that dynamic. Investopedia cited a Payscale survey in which employers plan raises averaging 3.3% in 2026, down 0.1 percentage point from 2025, while wage growth in job postings has cooled. It also flagged a drop in wage growth from 3.4% annualized in January to 2.5% in September, as employers avoid hiring sprees but also sidestep mass layoffs amid tariff and demand uncertainty.

This is where the catalyst matters. If AI projects start producing clear returns, firms can increase output without adding staff, which supports margins but risks extending the “jobless boom.” If AI expectations disappoint, the risk shifts from labor to markets. Mark Zandi explicitly raised that two-sided risk, warning that AI could either drive productivity-led job losses or spark a correction if investors are overestimating AI’s payoff. That’s a sharp contrast from the post-pandemic period when demand for workers forced employers to compete on pay.

What to do with this as a reader and investor is straightforward. Treat 2026 as an “efficiency economy” until proven otherwise. That means watching labor-market re-acceleration signals, but also recognizing that the near-term winners are likely firms that can translate AI capex into measurable productivity. If you’re planning budgets, compensation, or hiring, assume raises near the 3% range and longer time-to-hire. If you’re investing, focus on who captures the productivity dividend, because workers may not see it quickly.

• Track weekly claims: initial claims at 214,000 but continuing claims near 1.92 million could signal longer job searches. Jobless claims data
• Watch whether unemployment holds around 4.6% or pushes higher, which would pressure the Fed to accelerate cuts. Four-year high
• Monitor Fed-cut expectations shifting toward mid-2026. Any change in chair-nomination headlines could move rates and the dollar. Rate-cut pricing
• Keep an eye on spot gold near $4,500 and silver near record highs. A reversal would hint risk appetite is returning. Metals at records
• Listen for “AI ROI” in 2026 guidance. If productivity gains show up without hiring, the jobless-boom narrative strengthens. AI-driven growth