Slowly but surely, 2025 is coming to an end for investors who should be happy with what markets have produced.

The major stock indexes are all higher, although they struggled Friday after closing at record levels on Thursday.

Interest rates have moved slightly lower partly because of the Federal Reserve‘s rate-cut move on Wednesday The economy has withstood multiple challenges, especially from tariffs.

There are some thorny issues that need to be dealt with, but, with one exception, they may not affect markets much in these last trading days of the year.

The New Year may be a different beast, with midterm Senate and Congressional elections due and economic and political stresses coming from two directions: the cost of health care and job prospects.

Still, there is hope that a Santa Claus rally gets strong in the last weeks of the year.

Traditionally, the rally is supposed to start with the last five trading days of the year and first two days of the New Year. But until Friday, traders were already in a partying mood, with the Dow Jones Industrial Average and Russell 2000 Index hitting all time highs on Thursday, happy about the Fed’s interest-rate cut and potential for more rate cuts, lower tax rates and regulation and sliding oil prices.

But then came Friday.

The unease over artificial intelligence

The question the stock market will face now is whether the artificial intelligence boom will deliver enough beef to justify the spending and massive valuations for a number of tech companies.

That concern was loud and clear on Friday when stocks like Broadcom and, especially, Oracle slumped because of worries about whether the AI spending pace can be maintained.

Oracle fell 12.7% on the week because of concerns too much of its future revenue is mostly dependent on one company, OpenAI. OpenAI, a pioneer in AI development, has a deal with Oracle to build some $300 billion in data centers.

Oracle is supposed to build the centers, but it’s not clear if OpenAI will be able deliver the revenue for Oracle to recoup its costs. There were reports Friday that some data centers might be delayed.

Despite the week’s turmoil, Oracle is still up 14% on the year. It hit a 52-week high of $345.72 on Sept. 10 but is down 45% since.

Broadcom fell 11.4% on Friday (and 7.8% for the week) on worries that its AI business was working on lower gross margins than other parts of the business. It is still up 55% this year.

The averages for the week

• Standard & Poor’s 500 Index. Down 0.6% on the week and 0.2% in December. Up 16.1% in 2025.
• Nasdaq Composite Index. Down 1.62% on the week and 2.2% in December. Up 20% for the year.
• Dow Jones industrials. Up 1% for the week, despite Friday’s 246-point loss. Up 1.0% in December. Up 13.09% year-to-date.
• Russell 2000 Index. Up 1.2% for the week. Up 2.91% in December. Up 14.4% year-to-date.

Micron leads earnings this week

Micron Technology, whose business supplies chips that help make artificial intelligence work, hit a 52-week high of $254.75 on Wednesday. It fell 8.8% through Friday’s close, again because of squeamishness of investors over AI.

The Boise, Id., company reports first-quarter earnings after Wednesday’s close. Revenue is forecast to jump 45% from a year ago to $12.7 billion. The earnings estimate is $3.73 a share, up 108.4% from a year ago.

And remember: The shares are up 187% in 2025.

Micron is the biggest stock report this week, based on its market capitalization of $290.6 billion.

Also reporting this week are

• Jabil Circuit and General Mills on Tuesday.
• Accenture, Nike and package shipper FedEx on Wednesday.
• Paychex, cruise ship operator Carnival, and companies Conagra Brands and Lamb Weston Holdings on Thursday.

The market is broadening out

We’re not making this up. Through the third quarter, Communications Services stocks and Technology stocks were the top sectors, up 24% and 22% for the year, respectively. In the quarter, alone the sectors were up 11.8% and 13%.

So far in the fourth quarter, Comm Services is up 5.6% and technology is up just 0.6%. Leading the sector this quarter are health care stocks.

Communication Services is still the second best performer. Financial stocks also have been strong. Canadian banks have been regularly making new highs this fall.

Economy: the Fed chair follies

President Trump told The Wall Street Journal last week his top choices to replace Jerome Powell as Federal Reserve are Kevin Warsh and Kevin Hassett.

Warsh, a former Fed governor who served the financial crisis of 2008-09. As a former investment banker, he was the Fed’s go-to guy for dealing with Wall Street during the crisis. In the interview, Trump suggested Warsh might be his top choice.

Hassett, director of the National Economic Council, had been thought to be the leading candidate.

There were reports the final decision would come in January.

Trump expects to offer his opinion on where the Fed’s key interest rate, the Federal Funds rate, should be set. He was asked where he thought the rate should be in a year. His answer: “1% and maybe lower than that.”

Economy: Jobs, CPI reports due this week

Economic reports due this week:

• Home Builders Confidence Index, Monday. The question is if slowly falling mortgage rate are spurring buyer interest. The 30-year mortgage are around 6.3% and have been at that level for most of the fall.
• Unemployment and jobs report for November. Tuesday. The Bureau of Labor Statistics is still catching up to data after the government shutdown. The October report showed 119,000 new jobs added to the economy with the unemployment rate at 4.4%.
• U.S. retail sales, also due Tuesday.
• S&P flash U.S. purchasing managers reports, also due Tuesday. Investors follow these closely.
• CPI report from the Labor Department. It’s been showing consumer running at 3% for the last few months. The Fed’s target is 2%.
• Existing home sales, National Association of Realtors, due Friday. Again, the question is whether demand is increasing with rates at current levels.
• University of Michigan Consumer Sentiment Index. This has consistently showed consumers being gloomy, but Christmas sales so far have been decent.