New Year's countdown is imminent. Risks don't take a break. Before 2026 arrives, investors must watch these three major market indicators.

Whether investors’ returns this year are bountiful or under pressure, as the calendar is about to turn, the market will soon enter a brand-new starting point. The last trading week before 2026 hides several key signals that could influence market sentiment at the beginning of the year, and investors should not take them lightly. This article is excerpted from Investopedia, based on market observation, not investment advice.

U.S. stocks will trade as usual until December 31 (Eastern Time)

Due to traders taking a day off for the New Year’s Day holiday on Thursday, this week’s trading hours will be shortened due to the holiday. Therefore, focus will be on initial jobless claims, Federal Reserve meeting minutes, and pending home sales data. The bond market will close early at 2 p.m. on Wednesday, while the stock market will trade normally on New Year’s Eve.

First, this week’s trading hours are noticeably shortened due to the New Year’s holiday. U.S. stocks will trade as usual on New Year’s Eve (December 31), but the U.S. bond market will close early at 2 p.m. on that day, and markets will be closed on January 1 (Thursday) for New Year’s Day. Reduced liquidity often amplifies price volatility, making markets more sensitive to economic data and news.

Technology-heavy Nasdaq, blue-chip Dow Jones Industrial Average, and S&P 500 index each declined 0.5%, 0.5%, and 0.4%. These three major indices ended their previous five-day winning streak last Friday but have gained over 1% this week, as investors hope for a new market trend at the start of 2026.

The world’s largest publicly traded companies—AI chip giant NVIDIA (NVDA) and one of the “Seven Giants,” Tesla (TSLA)—fell 1.2% and 3.3%, respectively. Tesla led declines in the Nasdaq. AI-related stocks Palantir (PLTR) and Oracle (ORCL) also declined, down 2.4% and 1.3%, respectively, amid ongoing market concerns over tech companies’ capital expenditures.

Pay close attention to three key indicators: Federal Reserve meeting minutes, initial jobless claims, and housing market data.

On the economic data front, focus is on three critical reports: Federal Reserve meeting minutes, initial jobless claims, and housing market data. The release of the December Federal Open Market Committee (FOMC) minutes on Tuesday will give investors further insight into internal discussions among Fed officials regarding inflation, employment, and interest rate outlooks. These minutes are seen as an important indicator ahead of the rate decision at the end of January, especially amid signs of slowing economic growth, making markets particularly sensitive to policy shifts.

In the labor market, the weekly initial jobless claims report on Wednesday will reflect end-of-year employment conditions. Data suggests that from April to September, the U.S. economy may have lost about 20,000 jobs per month on average. Whether the employment market continues to cool will directly influence the Fed’s stance on interest rates and impact stock and bond markets.

The housing market is also worth watching. The pending home sales data released on Monday will reveal actual transaction conditions under high interest rates and affordability pressures; meanwhile, the S&P Case-Shiller Home Price Index shows signs of slowing annual home price growth, indicating that buyers’ purchasing power is gradually reaching a peak. If the housing market cools further, it could put pressure on consumer spending and related industries.

Reviewing the market trend, the shortened holiday week opened with volatility. Tech stocks led the declines across the three major indices, with AI and large-cap tech stocks under pressure due to capital expenditure concerns; precious metals, after reaching record highs, sharply declined due to the Chicago Mercantile Exchange raising margin requirements, forcing some investors to reduce positions. This reminds the market that year-end asset rebalancing and systemic adjustments can lead to sudden price corrections.

Additionally, an often-overlooked structural change is happening: starting from New Year’s Day 2026, 22 U.S. states will raise their minimum wages, with 19 states implementing the increase immediately. The medium- and long-term impacts on consumer spending, business costs, and inflation are worth continuous monitoring.

In summary, the last week before 2026 arrives may seem light on data and trading volume, but it is full of signals and risks. Reduced liquidity during the holiday, clues from Fed policy, employment and housing trends, and recent asset price volatility are key points for investors to carefully navigate at the year’s end and beginning. Instead of chasing short-term gains, investors should focus on risk management and asset allocation to prepare for the upcoming “rollercoaster market” of 2026.

This article, “Countdown to the New Year: Risks Never Rest, Three Major Market Indicators Investors Must Watch Before 2026,” first appeared on Chain News ABMedia.