Global Markets Weekly Update
U.S. Market Overview
U.S. stocks experienced a decline during the holiday-shortened week, with most indexes closing out 2025 on a positive note, having achieved double-digit gains for the third consecutive year. The Nasdaq Composite saw the largest drop, while the Dow Jones Industrial Average and S&P MidCap 400 Index performed relatively better, losing 0.67% and 0.71%, respectively. The energy sector was a standout performer, benefiting from rising oil prices due to geopolitical tensions.
Housing Market Insights
The National Association of Realtors reported a 3.3% increase in the Pending Home Sales Index for November, the largest monthly increase since February 2023. This surge is attributed to lower mortgage rates and wage growth outpacing home prices, enhancing housing affordability.
Federal Reserve Updates
The Federal Reserve's minutes from the December meeting indicated a division among policymakers regarding future rate cuts, with some advocating for a pause in rate adjustments. Jobless claims fell for the third consecutive week, signaling a robust labor market.
Bond Market Performance
U.S. Treasury yields showed mixed performance, with high yield bonds outperforming in a week of light trading volumes. Investment-grade corporate bonds faced negative returns.
European Market Highlights
The pan-European STOXX Europe 600 Index reached a new high, closing 1.26% higher, supported by a favorable economic environment. Inflation in Spain eased, while France saw a decrease in registered unemployment. However, UK house prices unexpectedly declined.
Japanese Market Overview
Japan's stock markets saw a slight decline, with the Nikkei 225 Index down 0.8%. The yield on the 10-year Japanese government bond rose to its highest level since 1999, reflecting expectations of continued interest rate increases by the Bank of Japan.
Chinese Market Insights
Mainland Chinese stock markets ended the week mixed, with a slight decline in the CSI 300 Index. However, a rise in the manufacturing purchasing managers' index suggests a potential stabilization in the economy.
Other Key Markets
In Colombia, a significant minimum wage increase could lead to higher inflation, while South Korea's stock market started the new year strong, buoyed by record export figures.