InsightDecember 17, 2025

Weekly market report: December 17, 2025

USA

Last week was dominated by the Fed’s Dec. 10 FOMC decision (25 bp cut to 3.50%–3.75%) and a “meeting-by-meeting” tone, while inflation trading signals were muted because BLS rescheduled the November CPI release to Dec. 18 after the 2025 funding disruption. Labor data leaned slightly softer with initial jobless claims at 236k (week ending Dec. 6), but not enough to shift the “soft-landing” base case. Equity indices reflected rotation: S&P 500 −0.28%, Nasdaq −1.49% (AI/megacap volatility late-week), while the Dow +1.51% benefited from a more value/cyclical tilt.

Europe

European equities were supported by global easing expectations and a bank-led bid, with macro prints “mixed but stabilizing,” notably Germany’s October industrial production +1.8% m/m. The UK backdrop stayed softer (growth concerns around the period’s official reporting), keeping investors biased toward dovish policy paths. Index performance was modestly positive overall: FTSE 100 +0.04%, DAX +0.58%, IBEX 35 +0.85%, while CAC 40 −0.49%, consistent with relative strength in banks/industrials and uneven sector leadership.

Japan

Japan started last week with a growth-headwind headline: Q3 GDP revision showed a deeper contraction (annualized −2.3%), underscoring fragile domestic momentum even as global financial conditions eased. Still, equities finished higher—helped by the global “rates down / risk-on” impulse and rotation—especially in broader market exposures: Nikkei 225 +0.50% and TOPIX +1.17% (TOPIX outperforming suggests more breadth beyond the biggest exporters/tech).

China

China’s data was a mixed signal: headline CPI rose +0.7% y/y in Nov 2025 (a small relief vs. deflation fears), but the latest official PMIs remained below 50 (soft activity pulse), sustaining expectations for continued policy support. Markets split accordingly: the Shanghai Composite −0.89% as mainland equities still discounted uneven demand and structural concerns, while Hong Kong’s Hang Seng +0.82% was steadier, aided by global rates sentiment and financial-sector/idiosyncratic headlines.

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