By Tim Russell, CFP®, President & Wealth Manager at Life Financial Group
Originally shared on the Life in the Markets podcast — 12/8/2025

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The markets saw a noticeable uptick in volatility this week as the VIX index jumped above 28—up sharply from the 16–17 range we’ve grown accustomed to in recent months. While a VIX in the upper 20s isn’t alarming on its own, it’s certainly worth paying attention to. Historically, markets don’t enter true panic mode until the VIX pushes into the 30s and 40s. And even then, it’s important to remember that the VIX reaches the 40s almost every year, yet long-term market performance remains strong.

Market Performance This Week

Despite the jump in volatility, performance across major indices and asset classes was mixed:

S&P 500: +0.97%
Nasdaq: +1.82%
Russell 2000: +0.88%
Gold: –0.68%
Silver: +1.87%
Oil: +0.83%
Bitcoin: +4.4% (though still down about 35% from its October high of $126k to $83k)
Bonds: +0.0%, with the 10-Year Treasury now at 4.141%

The story here isn’t the weekly performance, it’s the shifting economic undercurrent driving these moves.

What’s Moving the Markets

1. Inflation Continues to Pressure Consumers

This week’s corporate earnings painted a clearer picture of the ongoing strain inflation is putting on households. Budget-sensitive retailers such as Walmart, Dollar Tree, Dollar General, and Five Below all reported strong foot traffic and rising demand. But the most surprising trend? A growing share of their shoppers now come from households earning over $100,000 a year.

This tells us two things:

Middle- and upper-middle-income families are trading down.
Price sensitivity is spreading beyond low-income households.

Many retailers reported higher total sales, but much of that growth came from price increases, not higher sales volume. Shoppers are buying fewer items, but visiting stores more frequently—a classic sign of financial pressure as families try to stretch their budgets.

Companies also continue to cite tariffs as a significant driver of higher prices. This is a real-time example of how tariffs—regardless of political narrative—tend to increase costs for both businesses and consumers across the board.

2. Unemployment: Cracks Emerging in Small Business

The latest ADP report provided new insight into the labor market. Private sector jobs declined by 32,000 in November. The breakdown is telling:

Small businesses: –120,000 jobs
Medium & large businesses: +60,000 jobs combined

Small companies often feel economic pain first, and this month’s report reflects exactly that. Rising costs, softer consumer demand, and tighter margins are squeezing smaller employers. Historically, small businesses also tend to recover faster once conditions improve—but for now, they’re clearly under stress.

3. Trump Accounts: Major Developments

The proposed “Trump Accounts” continue to make headlines as more details emerge. The IRS released updated guidance confirming that no contributions can be made before July 4, 2026. For those wanting to dig deeper, the IRS has published official documentation outlining the timeline and regulations.

Perhaps the biggest news of the week was the announcement that Michael and Susan Dell have pledged $6.25 billion to support the rollout of these accounts. Their commitment will fund up to 25 million American children, providing $250 to each eligible child in lower-income ZIP codes who would not have otherwise received the Treasury’s $1,000 seed money.

This move dramatically expands the potential reach of the program and underscores the significant philanthropic interest in boosting long-term savings for American children. Contributions to Trump accounts cannot be made before July 4, 2026.

Resources:

The Trump accounts got a huge boost last week when Billionaires Michael and Susan Dell pledged $6.25 billion to fund up to 25 million American children 10 and under an incentive to open a trump account. The Dells will put money into the accounts of children 10 and younger who live in ZIP codes where the median income is $150,000 or less and who won’t get the $1,000 seed money from the Treasury. The Dells’ gift will use the “Trump Accounts” infrastructure to give $250 to each qualified child.

Looking Ahead: All Eyes on the Federal Reserve

The Federal Reserve meets this Tuesday and Wednesday, and markets widely expect another interest rate cut. With volatility rising, consumer strength weakening, and small businesses showing early signs of strain, investors will be listening closely for any changes in tone or forward guidance.

Rate cuts may offer temporary market support, but the Fed must balance its mandate—stimulating economic growth without reigniting inflationary pressures.

Final Thoughts

This week’s data paints a picture of an economy still growing, but under increasing stress. Volatility is rising, consumers are trading down, and small businesses are feeling the pinch. At the same time, policy developments like the Trump Accounts and possible rate cuts add another layer of complexity.

We’ll be watching the Fed closely next week. In the meantime, staying diversified, disciplined, and informed remains the best strategy for navigating a market environment like this one.

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Disclaimer: The topics discussed here are for informational purposes only and do not constitute specific investment advice. Investing involves risks, including potential loss of principal. Past performance does not guarantee future results. Securities and advisory services offered through Geneos Wealth Management, member FINRA/SIPC.