By William Power

The stock market's Santa is being generous this year, but not overindulgent.

With just a few weeks to go in 2025, investors in the average stock fund are doing well, with double-digit gains. The average U.S.-stock mutual fund or exchange-traded fund is up 12.6% for year through November, after a late-November rally allowed left stock funds virtually unchanged on average for the month, according to LSEG data.

Earlier in the year, it looked as if grinches would rule, as markets were damaged by tariff and geopolitical turmoil. But stocks have rallied to a series of highs, thanks to the continued surge in tech stocks -- artificial-intelligence players in particular.

If the double-digit gains hold through year-end, it will be the third year in a row. Last year, U.S.-stock funds rallied 17.4%, and the previous year 21%. (See funds data in Mutual-Fund Yardsticks.)

The S&P 500 was able to claw back from a nearly 5% intramonth decline to post the modest gains for November, notes Adam Turnquist, chief technical strategist for LPL Financial. "Oversold conditions, solid earnings that included renewed AI optimism, optimism for a Ukraine ceasefire, and a sharp repricing of rate-cut expectations for December fueled the rebound," he says. The Federal Reserve cut interest rates in September and October and could again at its next policy meeting Dec. 9-10.

International-stock funds are up 26.4% so far this year, including a 0.5% gain in November.

Bond funds rose. Bond funds that are focused on investment-grade debt (the most common type of fixed-income fund) are up 7.5% for 2025 so far, including a 0.7% gain in November.

FINANCIAL FLASHBACK

A look back at Wall Street Journal headlines from this month in history

-- 60 YEARS AGO: LBJ and the Fed

Inflation is elevated. Tax cuts have energized the economy. And the president and Federal Reserve chief are locked in battle over interest rates.

Sound familiar?

While the challenge to the Fed's independence isn't an exact analog of today, where President Trump has repeatedly called on Fed Chairman Jerome Powell and other central bankers to cut interest rates, it is what happened in 1965 as President Lyndon B. Johnson made an "unusual public expression of disapproval of the board's action" to increase the discount interest rate by half a percentage point to 4.5%.

Recovering from gallbladder surgery at his Texas ranch, according to a historical account on the Richmond Fed's website, LBJ called in Fed Chairman William McChesney Martin Jr. and other top economic officials and laid into them. "You've got me in a position where you can run a rapier into me and you've done it," charged Johnson, as recounted in Robert Bremmer's book "Chairman of the Fed."

Unlike the then-president, many business leaders of the time did seem worried about inflation. "I approve of the increase in the discount rate most heartily" because "all signs indicate we are in a spiral of inflation due to spending beyond our means," Donald R. McClung, president of Pacific Power & Light, told The Wall Street Journal for its account of the Fed's standoff with LBJ.

Others saw the president's comments as simply being political. "This [criticism] is just what you'd expect him to say politically," said the financial vice president of a major drug and toiletries company. "If the economy turns down, he can blame it on the Fed. If the economy continues doing well, everyone will forget what he said. So, he hasn't got a thing to lose."

Ultimately, the Fed didn't back down, according to the Richmond Fed's historical account, but neither did inflation and many scholars now believe that the roots of the 1970s inflationary spiral can be found in the 1960s.

"Business leaders aren't dumb. They understand the Fed is not 100% independent of the government," says Robert Wright, a professor and economic historian at the University of Austin. "They realize the Fed doesn't effectively combat inflation and there are times when it does."

-- 55 YEARS AGO: Nixon Signs Bill Forming Investor Insurance Unit (founding of the SIPC)

-- 30 YEARS AGO: Fund Track: Investors Still Carry Heavy Load of Fees

--By Simon Constable

William Power is deputy section editor of Journal Reports. Email him at william.power@wsj.com.

(END) Dow Jones Newswires

December 07, 2025 11:00 ET (16:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.