Equity markets closed out a strong 2025 on a mixed note during a holiday-shortened week as global markets paused for New Year celebrations. The year was marked by a range of headwinds, most notably the introduction of US tariffs, which weighed on sentiment through the first half. However, markets rebound decisively in the second half as investors shifted their focus toward easing monetary conditions and policy support. Risk assets ultimately rallied broadly, with 2025 concluding as the first year since the pandemic (1) in which all major asset classes recorded positive returns, underscoring the resilience of global markets despite a challenging macroeconomic backdrop.

Returning to last week’s market activity, US equities declined in a thinned trading environment, with the technology-heavy NASDAQ the weakest of the major benchmarks, falling -1.5% (in dollars). In contrast, European equities continued to push higher, supported by improving confidence in the economic outlook, with the MSCI Europe ex-UK Index rising +1.3% in euro terms as markets responded positively to signs of stabilising growth and easing financial conditions. UK equities also closed the year on a positive note, with the FTSE 100 gaining +0.8% and the FTSE 250 advancing +0.4%, while the former briefly crossed the 10,000 level for the first time in its history before giving back some gains toward the end of the week. In Asia, Japanese equities underperformed, with the Nikkei 225 declining -0.8% in yen terms as tech-related stocks sold off, particularly those with significant exposure to artificial intelligence (AI) themes2. Meanwhile in China, equities edged higher, with the Shanghai Composite adding +0.4% in renminbi terms, supported by improved Purchasing Managers’ Index (PMI) readings that suggested early signs of economic stabilisation.

In commodity markets, oil prices weakened, reversing the prior week’s advance. Brent crude declined by -2.4% to $60.83 per barrel, as renewed uncertainty around global demand and persistent oversupply concerns weighed on sentiment. Gold also retreated sharply, with the precious metal falling -4.8% to $4,322 per ounce. The move was driven by a rise in US Treasury yields alongside a modest strengthening of the US dollar. Profit-taking also weighed on prices following gold’s strong performance last year when it returned more than +60.0%. Today, however, gold prices have rebounded following the capture of Venezuelan President Nicolás Maduro over the weekend, reflecting heightened geopolitical uncertainty and renewed safe-haven demand.

Sources: (1) J.P. Morgan – Review of Markets over 2025

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