United States
US markets opened the final full trading week of 2025 in a cautious mood, with investors reluctant to take strong positions ahead of a dense run of economic data that will influence expectations for Federal Reserve policy into next year. Equity markets drifted lower, bonds were rangebound, and the US dollar showed little conviction as traders weighed signs of slowing labour demand against inflation that remains uneven.
The S&P 500 closed modestly lower and finished below 6,820, while the Nasdaq 100 declined 0.5%, reflecting continued pressure on large technology stocks. The Dow Jones Industrial Average was little changed, underscoring the lack of clear directional momentum. Broadcom recorded its steepest three-day decline since 2020, while Oracle extended its sell-off to roughly 17% over several sessions. Performance among megacap stocks was mixed, with Apple and Amazon easing while Tesla and Nvidia finished higher. Smaller companies lagged, with the Russell 2000 falling 0.8%.
Bond markets remained steady as investors awaited the November jobs report, due Tuesday, which will also include delayed October payroll figures following the federal government shutdown. The yield on 10-year US Treasuries was little changed at 4.18%, while the two-year yield edged down to 3.51%. The US dollar closed marginally lower and finished at its weakest level since October.
Cryptocurrencies remained under pressure and continued to cap broader risk appetite. Bitcoin fell more than 3% to trade below USD 86,000, while Ether slid 5%. Volatility expectations were contained, with equity options markets pricing a relatively modest move following the payrolls release.
Despite near-term uncertainty, Treasuries remain on track for their strongest annual performance since 2020, supported by easing growth momentum and expectations that policy settings may become more accommodative in 2026.
Europe
European equities rebounded as risk appetite improved following last week’s technology-led sell-off in the United States. The Stoxx Europe 600 Index gained 0.7%, pushing back toward record territory and extending what has been a strong finish to the year. Banks, travel and leisure stocks led gains, while real estate and automotive names lagged the broader market.
Lower energy prices continued to support sentiment, particularly for industrial companies where energy remains a significant input cost. European gas prices declined further, easing concerns around cost pressures as winter demand builds. Investors also responded positively to reports of progress in discussions between Ukraine and the United States held in Berlin, although markets remained cautious given the absence of any confirmed agreement.
Stock-specific moves were mixed across the region. Argenx dropped sharply after announcing it would discontinue trials for an eye disease treatment, while Sanofi fell following setbacks for its experimental multiple sclerosis drug. Juventus shares jumped after a takeover bid from Tether Holdings, though the offer was quickly rejected by the club’s majority owner.
Attention now shifts to the European Central Bank meeting later this week, where policymakers are widely expected to leave interest rates unchanged as they balance cooling growth with persistent inflation pressures.
Australia
The Australian sharemarket ended the session lower, tracking weakness on Wall Street and a sharp pullback in commodity prices. The S&P/ASX 200 Index fell 0.7% to 8,635, with materials the largest drag on the index and ten of the eleven sectors closing in the red.
Mining stocks bore the brunt of the sell-off as copper retreated more than 3% from record highs and iron ore futures slipped to around USD 100.70 a tonne. BHP dropped 2.9% and Rio Tinto fell 2.4%, while Fortescue eased despite announcing the acquisition of the remaining stake in Alta Copper. Gold miners were also weaker, even as bullion prices remained elevated above USD 4,300 an ounce.
Consumer discretionary was the sole sector to finish higher, supported by a strong gain in JB Hi-Fi. Among individual stocks, ASX Ltd fell 5.7% after the corporate regulator imposed a AUD 150 million capital charge, prompting the exchange operator to cut its dividend payout ratio. DroneShield surged more than 10%, while 4D Medical rallied after receiving regulatory approval for its imaging technology in Canada. Treasury Wine Estates entered a trading halt as it prepares to update the market on its outlook.
ASX 200 futures are pointing to a slightly weaker start, down around 0.1%, as local investors await domestic confidence data and commentary from Reserve Bank officials.
Commodities and currencies
Commodity markets were broadly weaker, led by declines in energy prices. West Texas Intermediate crude oil fell 1.4% to USD 56.66 a barrel, while Brent crude eased to around USD 60.44. Iron ore prices edged lower, reflecting softer demand expectations and the introduction of export licensing measures in China.
Gold edged modestly higher, rising 0.1% to around USD 4,305 an ounce after adding more than 2% last week. In currency markets, the Bloomberg Dollar Spot Index slipped 0.1%. The Australian dollar eased to around US 66.4 cents, while the Japanese yen strengthened on expectations the Bank of Japan may lift rates this week.
Economic Calendar
AU:
- PMI Reports (MoM Dec) 09:00
EU:
- PMI Reports (MoM Dec) 20:00
US:
- Non-farm Payrolls (MoM Nov) 00:30
- Unemployment Rate (MoM Nov) 00:30
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
