Stocks Set For Biggest Annual Advance In Six Years: Markets Wrap
The MSCI All Country World Index — one of the broadest measures of the equity market — has risen 21% this year with just one trading day of 2025 remaining.
Global stocks are poised for their biggest annual gain in six years, supported by the Federal Reserve’s interest-rate cuts and a surge in enthusiasm for artificial intelligence companies.
The MSCI All Country World Index — one of the broadest measures of the equity market — has risen 21% this year with just one trading day of 2025 remaining. Asian equities are also set for a third annual gain, and the best since 2017. A number of markets are already shut for the year, including Japan and South Korea.
While much of the attention was on equities, precious metals have emerged as one of the hottest corners in the market. Gold and silver were both set for their best annual jump since 1979. Bitcoin, however, was poised for its second annual decline in four years. A Bloomberg gauge of the dollar slumped 8.1% this year, the biggest drop since 2017.
Equities climbed to all-time highs in 2025 as optimism over economic growth, corporate earnings and a looser monetary policy helped markets rebound from an April slump that was triggered by President Donald Trump’s tariffs. Still, heading into 2026, investors face elevated valuations and growing divisions among policymakers over the scope for further easing, as evidenced by Tuesday’s release of Fed’s last policy meeting.
“The overriding theme is that global stock indices have lost momentum into year-end,” Kathleen Brooks, research director at XTB, wrote in a note. “There are plenty of reasons for this, including decent returns for 2025, and investors waiting to make big trading decisions until after the Christmas break.”
Meanwhile, US stocks ended Tuesday modestly lower even after minutes from the Fed’s December meeting reinforced expectations for further rate cuts next year. Policymakers remained divided over when and how far to cut, a record of the central bank’s December meeting showed.
The minutes highlighted the divisions among policymakers, and how difficult it was for them to lower rates by a quarter percentage point earlier this month.
What Bloomberg strategists say...
As the year draws to a close, market dynamics are shaped by division rather than direction, tempering risk appetite at the margin even as underlying resilience maintains a broadly supportive backdrop for US equities.
—Brendan Fagan, Macro Strategist, Markets Live. For the full analysis, click here.
In other corners of the market, oil headed for its deepest annual loss since the pandemic in 2020, with prices undermined by concerns about a punishing surplus that’s set to dominate market sentiment and trading into the new year.
In Asia, currency moves have gained a lot of attention recently, with the onshore yuan gaining past the widely watched 7-per-dollar level Tuesday for the first time since 2023.
Even so, investors have reasons to be optimistic heading into the new year. MSCI’s gauge for global stocks has climbed an average 1.4% in January over the last 10 years and advanced in six of those instances, data compiled by Bloomberg showed.
“Wall Street is rounding out the year in a subdued fashion, capping a good year for stocks, albeit one that included a nervous moment or two,” Kyle Rodda, a senior analyst at Capital.com, wrote in a note. “The markets are pricing in a pretty much close to perfect set of circumstances going into next year.”
Corporate Highlights:
Warner Bros. Discovery Inc. plans to once again reject a takeover bid from Paramount Sky dance Corp. after the rival media company amended the terms of its offer, according to people familiar with the company’s thinking.
Tesla Inc. took the unusual step of publishing a series of sales estimates indicating the outlook for its vehicle deliveries may be lower than many investors were expecting.
Key Events This Week
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 9:10 a.m. Tokyo time
Hang Seng futures fell 0.2%
Australia’s S&P/ASX 200 fell 0.2%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1747
The Japanese yen was little changed at 156.37 per dollar
The offshore yuan was little changed at 6.9918 per dollar
Cryptocurrencies
Bitcoin rose 0.1% to $88,285.7
Ether was little changed at $2,963.3
Bonds
Australia’s 10-year yield advanced three basis points to 4.78%
Commodities
West Texas Intermediate crude was little changed
Spot gold was little changed
