Stocks trade sideways after Congress passes stopgap spending bill

This is a segment from the Forward Guidance newsletter. To read full editions, subscribe . President Biden over the weekend signed Congress’s bipartisan spending package, narrowly avoiding a government shutdown and keeping federal operations funded through mid-March. The bill, cut from 1,500 pages to around 100, does not raise the debt ceiling, a provision President-elect Trump requested. Also out: a 3.8% raise for members of Congress, a bipartisan provision included in the original bill. The eleventh-hour deal did little to calm markets, which have struggled to maintain their post-election momentum this month. The S&P 500 is down 1.7% since the start of December. The tech-heavy Nasdaq has fared better, gaining 1.4% month to date, but the index lost almost 3% last week alone. The dip, which Sevens Report Research founder Tom Essaye attributes to hawkish commentary from the Fed, political turmoil and disappointing initial jobless claims data last week, could be a “potential preview” for the new year . “Now, to be clear, while I say that, I’m also not saying I expect the market to decline next year,” Essaye added. “Instead, I think last week was a preview of 2025 because it was a realization of what I have been warning about: Namely that uncertainty around the key drivers of this bull market is going to rise and we saw that last week with two of the drivers of rally, expectations for Fed rate cuts and pro-growth policies.” The S&P 500 and Nasdaq Composite were trading fairly flat midway through Monday’s session, up 0.6% and 1%, respectively, as of 2:15 pm ET. Market moves are expected to be relatively soft this week with a limited number of trading days. Meanwhile, bitcoin has also stalled. The largest digital currency is down around 13% from its all-time high of more than $108,000. Historically, cryptos deliver mixed returns in the final days of the year. When trying to predict what might happen this week, analysts say keeping an eye on macro conditions will be key. “While reduced liquidity can heighten volatility, the absence of major institutional activity may actually stabilize prices,” James Toledano, chief operating officer at Unity Wallet, said. “This year, much depends on investor sentiment following 2024’s ETF approval and the Trump-factor as well as other macro trends.” Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter . Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter . Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more. The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.