Global stock markets started the week in a holding pattern on Monday, December 8, 2025, as investors wait for what is widely expected to be a US Federal Reserve rate cut — and, more importantly, clues about how far and how fast any easing cycle might go.
World equities were broadly flat, with Asia mixed but mostly firmer, European stocks hovering just below recent highs, and US futures pointing to a mildly positive open as the S&P 500 trades within touching distance of its all‑time peak. [1]
Key takeaways for December 8, 2025
- Fed week dominates sentiment: Markets price an ~85–90% chance of a 25 bps Fed rate cut on Wednesday, but strategists warn of a potential “hawkish cut” with a divided committee. [2]
- Asia mixed, China data supports risk: Regional indices were uneven, but better‑than‑expected Chinese export data and a record trade surplus above $1 trillion helped underpin sentiment. [3]
- Europe treads water: The STOXX 600 traded around 578, off marginally on the day, as consumer staples slumped but industrials and defense shares provided support. [4]
- Wall Street near records, small caps lead: The S&P 500 sits just below its record close around 6,891, while the small‑cap Russell 2000 has surged more than 9% since late November, signaling a broadening rally. [5]
- Gold & stocks “double bubble” risk: The BIS flagged an unusual simultaneous surge in gold and equities — with gold up about 60% this year — as a potential emerging “double bubble.” [6]
- India underperforms: Indian benchmarks slid sharply, with the Sensex down over 600 points and all major sector indices closing in the red amid foreign outflows and Fed jitters. [7]
Fed week keeps global stocks in a tight range
The central narrative today is simple: nothing big happens until the Fed does.
Global stocks were essentially flat as of Monday afternoon, with the MSCI world gauge little changed and major indices hovering near recent highs. US equity futures ticked higher, with S&P 500 futures up around 0.1–0.2% and Nasdaq futures also firmer, mirroring a cautious risk‑on tone. [8]
Futures pricing and CME FedWatch data put the probability of a 25 basis‑point rate cut on Wednesday at roughly 85–87%, taking the federal funds target range from 3.75–4.0% down to 3.5–3.75%. [9] A surprise pause would be a genuine shock, so the real drama lies in how united (or not) the Federal Open Market Committee looks and how aggressively Chair Jerome Powell pushes back against hopes for multiple cuts in 2026.
Recent Reuters commentary notes that this could be one of the most fractious Fed meetings in years, with a realistic risk of multiple dissents — something markets haven’t seen often since 1990. [10] That’s why traders are so focused on the dot plot, the statement language, and Powell’s press conference: a “hawkish cut” could mean fewer easing moves next year than current pricing suggests.
Adding to the policy stew, central banks in Canada, Switzerland, Australia and Brazil all meet this week and are widely expected to hold rates steady, reinforcing a narrative of diverging but broadly restrictive global monetary policy. [11]
Asia‑Pacific stock markets today: cautious optimism under Fed and China spotlight
Asian equities delivered a mixed but mostly constructive session, reflecting both Fed nerves and fresh macro data out of China:
- Japan’s Nikkei 225 hovered around 50,582, fractionally lower, after revised GDP figures showed the economy contracted at a 2.3% annualized pace in Q3 — worse than the prior 1.8% estimate and a reminder of the drag from US tariffs and weaker public investment. [12]
- The broader TOPIX gained around 0.6%, helped by financials and exporters, even as rising Japanese government bond yields — now at multi‑year highs — kept rate‑sensitive sectors on edge. [13]
- In China, the Shanghai Composite added about 0.5% while Hong Kong’s Hang Seng slipped roughly 1.2%, underlining the split between onshore optimism and lingering concerns about Hong Kong‑listed growth names. [14]
- South Korea’s Kospi climbed about 1.3% and Taiwan’s benchmark rose roughly 1.2%, extending recent gains in chipmakers and tech hardware. [15]
- Australia’s S&P/ASX 200 dipped around 0.1% as traders braced for Tuesday’s RBA decision, where markets expect no move but see higher odds of a hike later in 2026 after a run of hotter‑than‑expected data. [16]
Regionally, the MSCI AC Asia Pacific index was up about 0.2–0.3%, continuing a modest rebound from last week’s wobble. [17]
China’s export surprise lifts sentiment
A major talking point in Asia was China’s November trade data, which came in stronger than expected:
- Exports rose 5.9% year‑on‑year, beating consensus forecasts and reversing a prior month’s contraction.
- The country’s trade surplus for the first eleven months of the year surpassed $1 trillion for the first time on record, even as exports to the US plunged about 29% under the weight of President Trump’s steep tariffs. [18]
The key nuance: Chinese exporters are re‑routing trade aggressively — shipments to the EU, Australia and Southeast Asia all grew strongly — which helps sustain manufacturing activity but also entrenches a more fragmented global trading system. [19]
Beijing’s Politburo signaled that it will lean harder on domestic demand to support growth, with more detail expected from the upcoming Central Economic Work Conference. For markets, that mix of export resilience + policy support helps explain why Chinese blue chips outperformed broader Asia today. [20]
European stock markets today: staples slump, defense and industrials steady the ship
European equities opened the week on a subdued note, with the pan‑European STOXX 600 roughly flat to slightly lower around 578–579 points. [21]
The headline moves:
- The STOXX 600 slipped about 0.1%, as losses in consumer staples offset modest gains in industrials and healthcare. [22]
- Germany’s DAX edged up around 0.1%, while France’s CAC 40 dipped about 0.2% and the UK’s FTSE 100 was effectively unchanged. [23]
Sector rotation: from “boring” staples to hard‑catalyst industrials
Today’s market action in Europe leaned into a familiar 2025 theme: investors are rotating away from “bond‑proxy” defensives and toward sectors with clearer earnings catalysts.
- Consumer staples were the biggest drag. Unilever fell nearly 4% after completing the spin‑off of its ice‑cream arm, now listed as Magnum Ice Cream Company, while L’Oréal dropped close to 2% after doubling its stake in skincare group Galderma — which itself rallied. [24]
- Industrials and defense names provided ballast. Rheinmetall gained more than 2%, part of a broader bid into European defense stocks as multi‑year spending commitments and Ukraine‑related uncertainty keep order books robust. [25]
- M&A and corporate headlines were active under the surface, with German metals group Kloeckner surging on takeover speculation and several single‑stock upgrades driving moves in Bayer, Renk and others. [26]
Strategists: Europe still has “room to run” tactically
Short‑term tactical views on Europe remain constructive, even as strategists continue to flag structural challenges:
- JPMorgan’s cross‑asset team argues that European stocks still have near‑term upside, helped by fiscal impulse, under‑ownership in global portfolios, and easing bond yields ahead of the Fed decision — but they frame it explicitly as a tactical trade, not a long‑term call, given Europe’s chronic issues around energy security, banking union, and AI investment. [27]
- Citigroup recently set a 2026 year‑end target of 640 for the STOXX 600, implying moderate upside from current levels, citing improving earnings momentum and fiscal tailwinds. The bank upgraded cyclically sensitive sectors including autos, industrials, chemicals and basic resources. [28]
Put simply: strategists see scope for European equities to “grind higher” into 2026, but they are selective — favoring industrials and defense over crowded defensives and late‑cycle consumer plays.
Wall Street: futures steady, S&P 500 near record while small caps surge
On Wall Street, everything revolves around Wednesday’s Fed verdict — but that hasn’t stopped the market from creeping back toward record territory.
Index levels and futures
- The S&P 500 last closed around 6,870, within a handful of points of its record high near 6,890.89, and S&P 500 futures were modestly higher in early US trading. [29]
- The Dow Jones Industrial Average sits near 47,955, and the Nasdaq Composite around 23,578, both also close to their recent peaks. [30]
Live coverage from US financial media describes a market “poised for modest gains” as traders position for a cut that many see as already baked into prices. [31]
Small‑cap catch‑up and the “Magnificent 7” rethink
One of the more notable storylines heading into year‑end is a rotation beneath the surface:
- Since US stocks hit a local low on November 20, the small‑cap Russell 2000 has rallied roughly 9.4%, outpacing the S&P 500’s ~5.1% gain over the same period and reaching an all‑time high last week. [32]
- That’s helped broaden a rally that was previously dominated by mega‑cap tech and AI leaders, easing concentration risk at the index level.
Reflecting that shift, Yardeni Research announced it is no longer “overweight” the famed “Magnificent 7” tech giants after 15 years of bullishness, citing worries about elevated valuations and better opportunities in the broader market. [33]
At the same time, Wall Street pieces point out that investors are feeling better about equities again: valuations “could be worse,” earnings are still supported by decent economic growth, and the market is no longer purely a big‑tech story. [34]
India and other emerging markets: a reminder that not everyone is at record highs
While developed‑market indices flirt with records, India stood out on the downside today:
- The BSE Sensex fell about 609 points (‑0.71%) to 85,102.69.
- The NSE Nifty 50 dropped around 0.86% to 25,960.55, slipping below the psychological 26,000 mark.
- Mid‑caps and small‑caps were hit even harder, with the Nifty Midcap 100 down 1.83% and the Nifty Smallcap 100 off 2.6%. [35]
All major sector indices finished in the red, led by real estate (‑3.5%), PSU banks and media. Local strategists blamed mixed global cues, rupee weakness, persistent foreign institutional outflows and pre‑Fed caution, arguing that the RBI’s recent rate cut supports the medium‑term story but is not enough to offset short‑term risk aversion. [36]
Elsewhere in emerging markets, performance was more balanced, with several Asian and Latin American indices tracking the broader “wait‑for‑the‑Fed” mood rather than staging decisive moves in either direction. [37]
Currencies, bonds and commodities: softer dollar, firm gold, stable oil
The macro undercurrent behind today’s equity moves is a cocktail of lower bond yields, a softening dollar and exceptionally strong precious metals.
Dollar and global yields
- The US dollar index has slipped more than 1% over the past two weeks and was roughly flat today, with the greenback around ¥155.6 against the yen and the euro trading near $1.165. [38]
- The US 10‑year Treasury yield was around 4.15%, with the 30‑year near 4.79%, both edging higher but still below their 2025 highs. [39]
- In Europe, Germany’s 30‑year Bund yield climbed to its highest since 2011, while Japanese government bond yields also touched multi‑year highs amid speculation that the Bank of Japan could hike rates next week. [40]
Those moves underline the stakes for Wednesday: if the Fed signals fewer cuts than currently priced, long‑dated yields could back up further, potentially pressuring expensive growth stocks and higher‑beta assets.
Gold, silver and the BIS “double bubble” warning
Gold is back at center stage.
- Spot gold traded above $4,200 an ounce today, with US futures around $4,240, extending a remarkable run driven by rate‑cut expectations and a weaker dollar. [41]
- Silver recently hit a record high near $59 an ounce, also benefiting from investor demand for hard assets. [42]
The Bank for International Settlements (BIS) drew a lot of attention by highlighting that gold and global equities are both exhibiting “explosive” price behavior at the same time — something it says hasn’t happened in at least half a century. Gold is up about 60% in 2025 and more than 150% since 2022, while stock markets, notably AI‑ and tech‑heavy US indices, also trade near records. [43]
The BIS warned this unusual co‑movement could represent a “double bubble” if both assets correct simultaneously, raising tricky questions about where investors — and central banks with large gold holdings — would seek safety. It also flagged growing fragility around AI‑driven valuations and crypto’s recent 20% drawdowns as additional stress points. [44]
Oil: quietly range‑bound
Oil prices slipped modestly:
- WTI crude hovered just below $60 per barrel,
- Brent crude traded around $63–64 per barrel,
as traders weighed ongoing Ukraine peace talks and the potential for any ceasefire to add downward pressure on prices. [45]
The combination of lower energy prices and high but stable gold prices is a classic “late‑cycle” mix that helps explain why equities are near records even as policymakers and macro watchers sound more cautious.
Fresh research and forecasts from December 8, 2025
Today brought a flurry of new strategy notes and outlooks that will shape how investors position into year‑end and 2026:
- JPMorgan (Europe): Tactically bullish on European equities, seeing room for near‑term gains driven by fiscal support, under‑owned positioning and easing yields — but still skeptical on Europe’s long‑term structural story (energy costs, lack of capital‑markets and banking union, slower AI adoption). [46]
- Citigroup (STOXX 600): Targets the STOXX 600 at 640 by end‑2026, expecting European earnings growth to accelerate next year as tariff and currency headwinds ease. Favors autos, industrials, chemicals and basic resources. [47]
- WSJ / Street sentiment pieces: Argue that equity valuations are “not as stretched as feared”, with earnings supported by still‑resilient growth and a rally that is broadening beyond mega‑cap tech — a key reason many expect the current uptrend to continue if the Fed doesn’t surprise hawkishly. [48]
- Yardeni Research (US tech): Downgrades the Magnificent 7 from overweight, signaling a more balanced stance and highlighting opportunities in sectors and regions that have lagged the AI trade. [49]
- Gold/commodities outlooks: Short‑term notes emphasize that gold’s momentum could stall if the Fed delivers a hawkish cut and pushes back on the scale of future easing; key support zones for gold futures are flagged just below current prices. [50]
Taken together, today’s research skew is best described as “constructive but nervous”: strategists generally expect equities to perform reasonably well into 2026, but warn that high valuations, crowded trades in AI and gold, and policy missteps could quickly destabilize sentiment.
What to watch next this week
For investors following the global stock market today, the next few days are packed:
- Fed decision and dot plot (Wednesday, US):
- Size and tone of the rate cut
- Number of dissents
- Updated 2026–2027 rate projections and Powell’s messaging on labor‑market risks [51]
- Other central bank meetings:
- RBA (Australia), BoC (Canada), SNB (Switzerland), Brazil’s central bank — all expected to hold, but any surprise signaling on 2026 policy paths could move FX and local equities. [52]
- China’s Central Economic Work Conference:
- Details on how Beijing plans to shift more toward domestic demand while managing trade tensions and property‑sector stress. [53]
- Corporate earnings:
- US names like Oracle and Broadcom will test appetite for AI‑linked earnings, while Costco provides a read on the US consumer. [54]
- Follow‑through in gold and small caps:
- Whether gold and Russell 2000 can extend their recent outperformance — or whether a hawkish Fed forces a rotation back into cash and high‑quality large caps. [55]
For now, global stocks on December 8, 2025 are less about big intraday moves and more about positioning: investors are nudging portfolios toward assets that can survive both a softer‑growth, lower‑rate scenario and the risk that central banks stay hawkish for longer than markets would like.
References
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