A Broader Rally Takes Shape
December wrapped up a pivotal year for investors, with moderating inflation, supportive monetary policy, and resilient equity markets setting the tone for 2026. As leadership expanded beyond the “Magnificent 7” and AI‑focused stocks, a wider range of companies contributed to market gains. This broadening of participation offers a healthier backdrop for long‑term investors working with a fiduciary financial advisor in Palm City or Bethesda.
Mixed Moves Across Major Indices
Major U.S. equity indices ended the month with varied performance. The S&P 500 held near flat after a strong year of returns. The Nasdaq 100 eased as investors took profits from high‑growth tech names. Meanwhile, the Dow advanced, reflecting a rotation toward defensive, industrial, and value‑oriented sectors—an encouraging sign for diversified portfolios managed through King Tide Advisors and other fee‑only wealth management firms.
Inflation Continues to Ease
November’s CPI report offered more evidence of disinflation. Headline CPI slowed to 2.7% year over year—its lowest level in several months—while core CPI rose 2.6%. Both categories grew more slowly than expected on a monthly basis. Shelter, medical care, and household categories remained firm but controlled. This trend supports the case for a soft‑landing environment and reinforces the importance of tax‑efficient investing strategies for pre‑retirees and retirees.
Fed Signals a Cautious Path Ahead
The Federal Reserve delivered its third consecutive 25‑basis‑point rate cut, bringing the federal funds rate to 3.50%–3.75%. Policymakers described economic activity as “moderate” and job gains as “slowed,” with inflation still “somewhat elevated.” Updated projections suggest a gradual easing cycle over the coming years. For clients of King Tide Advisors in Palm City, FL and Bethesda, MD, this environment emphasizes the value of disciplined retirement income planning and risk management.
Labor Market Momentum Slows
The labor market showed signs of cooling. The unemployment rate rose to 4.6%, and November payroll gains slowed meaningfully. Healthcare and construction added jobs, while transportation, warehousing, and consumer‑oriented industries saw declines. This aligns with the Fed’s view that the labor market is moving toward better balance—an important factor for long‑term financial planning and portfolio allocation.
Services Hold Firm While Manufacturing Contracts
Service‑sector activity continued expanding, with the ISM Services PMI marking its ninth straight month above 50. Business activity and new orders remained solid, though service‑sector employment contracted. Manufacturing slipped further into contraction amid lower export demand and inventory normalization. Investors should continue to focus on diversified, risk‑managed portfolios tailored to their goals—an approach central to King Tide’s fiduciary financial planning process.
Outlook for 2026
As we enter 2026, many analysts expect a soft‑landing scenario: moderate economic growth, inflation trending toward 2%, and continued gradual rate cuts. For long‑term investors in Palm City, Bethesda, and across the Treasure Coast and DMV, the message remains consistent—stay disciplined, maintain a diversified financial plan, and view market volatility as an opportunity, not a setback.
How King Tide Advisors Can Help
Whether you are approaching retirement, managing a growing family’s financial priorities, or running a small business, our fee‑only fiduciary advisors provide personalized, goals‑based planning. From retirement income strategies and Roth conversion planning to Social Security optimization, tax‑efficient investing, and education planning, we help you make confident, informed decisions.
If you have questions about how recent market trends may affect your financial plan, we encourage you to reach out to King Tide Advisors for personalized guidance and a complimentary consultation.
