Weekly Round-Up, 8th December 2025

As we enter the final few weeks of 2025, the equity indices for major markets and sectors detailed below have delivered gains ranging between 11% (US) and 25% (Europe ex UK), once rounded, in Sterling terms, to close on Friday 5th December. 

Last week

• Global equities made a modest -0.2% loss, whilst UK equities fell -0.50%.  

• Alphabet approached a historic $4 trillion market cap, about $3.82 trillion, as its shares reached record highs. The surge reflects strong investor confidence in its AI capabilities—powered by Gemini 3 and proprietary cloud infrastructure, plus picking up steam in its cloud business and a boost from Berkshire Hathaway’s investment. 

• Whilst UK equities gave ground overall, it was a decent week for UK banks which passed “stress tests” and for mining stocks after copper prices hit record highs. 

• In Japan, a potential policy pivot from Governor Ueda of the Bank of Japan weighed on equity markets, with a possible December rate hike on the cards. 

• In fixed income, it was a flat week for UK government bonds, whilst Sterling Corporates made a modest gain. 

This week and the month ahead

• China’s trade balance data for November will be released; with exports projected to rise by 3.2% year on year. Chinese stocks are holding up, with the CSI 300 index up 15% in Sterling terms in the year to 5th December. However, the economy is sluggish with a property slump and weak consumption making it ever-more reliant on exports. Hence, this will be an important figure for markets to digest. 

• There are two catalysts for US stock markets heading into 2026: 

• Federal Reserve interest rate decision (10th December): The consensus view is the Federal Reserve is likely to cut interest rates by 0.25% at its December meeting, amid contained inflation and a softer near-term economic outlook. 

• Focus on the Labour market (16th December): The November U.S. nonfarm jobs report will confirm US labour conditions. Forecasts predict slower job growth and a modest increase in unemployment. However, wage growth remains positive in real terms. 

• Additionally, US Investors are watching for a potential “Santa rally”; since 1980 the S&P 500 has made gains 73% of the time in late December to the close of the year. Let’s hope Santa visits again this year! 

Source: Bloomberg. Currency GBP.

More details:

The US interest rate outlook remains in focus: President Trump announced he has made his decision on the next Federal Reserve Chair but that it will not be made public until early 2026. Kevin Hassett is widely expected to be his choice. Should he become Fed Chair he is expected to take a more “dovish” stance on rate cuts than the incumbent, Jerome Powell.  

European equities finished marginally in the black this week. Strength this quarter has been driven by banks and defence. German spending plans, totaling €400 billion on defence and €600 billion on infrastructure over 10 years, have also buoyed markets across the region. There is also a tailwind from a liquefied natural gas surplus, pushing electricity prices and inflation lower, helped by moderate wage growth. In time there may even be scope for an interest rate cut. 

In emerging markets, the Reserve Bank of India lowered its policy rate by 25 basis points to 5.25%, bringing total cuts under Governor Sanjay Malhotra, who assumed office early last year, to 125bps. Inflation has fallen sharply from over 6% a year ago to near zero in October, providing scope for further easing if growth slows. India remains a standout performer in Asia-Pacific and among emerging markets, with GDP expanding 8.2% in the third quarter, according to provisional estimates from the National Statistics Office. The strength is underpinned by solid consumer spending and robust growth in manufacturing and services.

The value of investments and the income from them can go down as well as up and you could get back less than you invested. Past performance is not a reliable indicator of future performance.

The content of this article is not intended to be or does not constitute investment research as defined by the Financial Conduct Authority. The content should also not be relied upon when making investment decisions, and at no point should the information be treated as specific advice. The article has no regard for the specific investment objectives, financial situation or needs of any specific client, person, or entity.