MarketWatch for December 2025
Markets ended December mixed: global equities edged higher on central bank support, with emerging markets leading. Bonds firmed as UK and US rates fell, though future moves remain uncertain. Commodities were uneven—metals rose, oil stayed weak.
December brought a bumpier ride for markets, especially toward the end of the month, as some investors decided to take profits after a strong year. Even so, global shares managed to finish slightly higher, helped by confidence that central banks will keep supporting economic growth. Some concerns remain about the sustainability of valuations, particularly in the technology sector, but overall sentiment stayed steady.
United States
US markets were fairly quiet overall, with no big moves. Shares ended roughly flat as profit-taking and uncertainty about future central bank policy—specifically the pace and timing of interest rate cuts—balanced out otherwise positive economic conditions. Financial companies stood out, rising strongly as investors shifted away from growth-focused sectors. Technology shares dipped slightly as questions over high valuations continued.
Europe
European markets held up well, even though December was softer than previous months. Economic signals were mixed: services continued to support growth, while manufacturing, especially in Germany, remained under pressure. Materials and industrial companies led the way, while sectors more sensitive to interest rates lagged. The European Central Bank kept rates unchanged, and attention turned to what 2026 might bring.
United Kingdom
UK shares had a stronger month, helped by a weaker pound and gains in commodity-related sectors. Materials and financial companies posted solid growth, while more domestically focused areas saw quieter performance.
Japan
In Japan, momentum continued, with shares extending their rally. Optimism around improving local conditions and hopes for continued economic growth supported sentiment. Investors moved away from high-profile AI stocks toward more traditional sectors. Japanese government bonds, however, struggled as concerns about government debt and possible policy changes persisted.
Emerging Markets
Emerging markets were among the strongest performers in December. A weaker US dollar and strength in technology-heavy markets like Korea and Taiwan helped offset weaker results from China and India. Other Asian markets also saw gains, although performance varied across the region.
Fixed income
Bond markets were more challenging. Government bond yields generally rose, which put pressure on prices, especially for longer-term bonds. US government bonds managed a small gain, while Japanese bonds fell sharply. Corporate bonds did better than government bonds, with high-yield bonds leading the way.
Commodities
Commodities delivered mixed results. Industrial metals-related shares strengthened, supported by supply constraints and demand linked to the energy transition and data-centre investment. Precious metals saw some ups and downs after strong gains earlier in the year. Oil prices stayed under pressure as supply and demand dynamics continued to weigh on the market.
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