Global Stock Markets Today (18 December 2025, 1:55): Stocks Rebound on Softer US Inflation as BoE Cuts and ECB Holds; AI Trade Still Volatile

Global stock markets swung through a familiar late‑2025 pattern on Thursday: early caution led by tech and “AI bubble” nerves, followed by a broad rebound as softer‑than‑expected U.S. inflation revived rate‑cut hopes and Europe’s central banks delivered mostly in line with expectations. ^[1]

By the time U.S. trading got underway, investors were balancing a supportive macro signal (cooler inflation) against a big asterisk: a prolonged U.S. government shutdown disrupted data collection, leaving markets to parse an inflation report with missing monthly detail. That uncertainty didn’t stop risk appetite from improving—helped by a sharp rally in chipmaker Micron after a strong forecast soothed fears that AI spending is peaking. ^[2]

Below is what’s driving global stock markets today, region by region, plus the key forecasts and what to watch next.

What’s Moving Global Stock Markets Today

Five forces dominated trading on 18 December:

U.S. inflation cooled, but with missing monthly CPI data after the shutdown—great headline numbers, weaker confidence in the fine print. ^[3]
Central banks set the tone for 2026 divergence: the Bank of England cut again, the ECB stayed put with firmer growth projections, and the Bank of Japan is expected to hike Friday. ^[4]
AI valuation nerves remain the market’s fault line, with “data‑center profitability” questions still pressuring mega‑caps even as Micron’s outlook steadied sentiment. ^[5]
Oil prices firmed on geopolitics (Russia sanctions risk, Venezuela tanker blockade), supporting energy shares from Europe to the Gulf. ^[6]
Year‑end positioning and liquidity amplified intraday swings—especially in tech, FX, and rates. ^[7]

Asia Stock Markets: Tech Sell‑Off Hits Japan; China Mixed; India Flat

Japan: Nikkei slides as AI and data‑center doubts spread

Japan was the clearest example of how fast the AI narrative can flip. The Nikkei fell 1.4% (with the broader Topix down 0.65%) as heavyweight tech names dropped on renewed questions about the profitability of AI‑linked data‑center buildouts. ^[8]

A key pressure point: SoftBank sank 4.5% after Oracle slid on a report that a major data‑center partner would not back a large next‑facility deal—fueling broader worries around capital intensity in the AI supply chain. ^[9]

Investors in Japan are also looking ahead to Friday’s Bank of Japan decision, with markets widely expecting a hike and—more importantly—guidance on how fast tightening continues in 2026. ^[10]

China and Hong Kong: Mixed mainland session; property pressure persists

Across emerging Asia, mainland China was mixed: the Shanghai Composite edged up, while the CSI300 fell, and real‑estate shares resumed declines as investors watched stress in the property sector. ^[11]

Hong Kong trading was cautious as tech names wobbled on the same AI‑bubble concerns seen elsewhere. ^[12]

India: Benchmarks largely unchanged amid a “no-catalyst” day

Indian equities were muted after several down sessions, with gains in IT and financials helping offset broader softness. Reuters noted uncertainty around a potential U.S.–India trade deal and the backdrop of foreign flows as key sentiment drivers. ^[13]

European Stock Markets: STOXX 600 Jumps as ECB Holds and US CPI Calms Rate Fears

European equities turned decisively higher after the U.S. inflation surprise and the ECB decision. The pan‑European STOXX 600 rose 0.93% to 585.29, snapping a two‑session slide, with Germany’s DAX and France’s CAC 40 up about 1% each. ^[14]

ECB keeps rates unchanged, upgrades growth view

The ECB kept its key rates unchanged and published updated staff projections that reinforced the view the euro area is handling global trade shocks better than feared. In its 18 December statement, the ECB projected:

Headline inflation: 2.1% (2025), 1.9% (2026), 1.8% (2027), 2.0% (2028)
Growth: 1.4% (2025), 1.2% (2026), 1.4% (2027), 1.4% (2028) ^[15]

Markets read that as “steady policy with improving macro,” and investors increasingly see the ECB’s cutting cycle as over for now. ^[16]

Bank of England cuts to 3.75%—but signals caution

In the UK, the Bank of England delivered its fourth rate cut of 2025, lowering Bank Rate to 3.75% from 4.0% on a narrow 5–4 vote, while warning that the path lower is becoming more finely balanced. ^[17]

The BoE also downgraded its near‑term growth view, expecting zero economic growth in the last three months of 2025 (per the Reuters report), even as inflation—still high by G7 standards—has started to ease. ^[18]

Sector leaders and laggards

European gains were broad-based:

Banks and financial services rebounded strongly, helped by improving risk sentiment. ^[19]
Retail rose, including a jump in H&M. ^[20]
Aerospace & defence led gains after recent pressure. ^[21]

Notable single‑stock moves included a sharp drop in Aéroports de Paris after a regulator rejected its tariff proposal, while Rational AG gained after an upgrade. ^[22]

Wall Street Today: Stocks Rally as Inflation Surprise Revives Rate‑Cut Bets, Despite Data “Asterisk”

U.S. markets came into Thursday still rattled by the prior session’s tech‑led selloff, but sentiment improved sharply after the CPI release and a rebound in semiconductors.

U.S. CPI: softer headline, missing detail

Reuters reported the U.S. Consumer Price Index rose 2.7% year‑on‑year in November, versus a 3.1% Reuters poll forecast. Core CPI was 2.6% y/y, but crucially, the Bureau of Labor Statistics did not publish month‑to‑month CPI changes due to missing October observations following the 43‑day shutdown—forcing investors to treat the headline as a signal, not a full diagnosis. ^[23]

That shutdown disruption is now bleeding into multiple datasets, raising the risk of “false clarity” until December readings arrive. ^[24]

Micron helps stabilize the “AI rollercoaster”

A key equity catalyst: Micron’s upbeat forecast helped pull chip and broader tech shares higher, easing fears that AI‑related capex is rolling over. Reuters described it as a stabilizer for “rollercoaster” AI sentiment. ^[25]

Rates and Fed expectations: hopes for more cuts, but not a straight line

Treasury yields dipped after the CPI report (10‑year around 4.12% in Reuters’ snapshot), reflecting improved odds of additional easing—while traders still debated how much of the CPI downside surprise was real versus “shutdown noise.” ^[26]

The Fed itself has signaled a more cautious path than markets have priced at times, keeping the 2026 policy debate alive. ^[27]

Currencies: Dollar Slips After CPI; Sterling Firms After BoE; BOJ Hike Looms

FX markets echoed the cross‑asset message: softer U.S. inflation pushed the dollar lower versus major peers, but moves were choppy given data uncertainty. ^[28]

Highlights from Reuters’ market snapshot:

Dollar vs yen: down (around 155.48 per dollar in one snapshot) ^[29]
Euro: little changed after the ECB decision ^[30]
Sterling: rose after the BoE cut as traders pushed back expectations for the next cut (not fully priced until June in Reuters’ report) ^[31]

Meanwhile, the Bank of Japan is widely expected to raise rates to 0.75% from 0.5% on Friday, keeping Japan the key swing factor for global FX into year‑end. ^[32]

Commodities: Oil Up on Russia/Venezuela Risks; Gold Steady; Silver Near Records

Oil supports energy stocks

Oil prices rose as traders weighed the risk of additional U.S. sanctions on Russia’s energy flows alongside Washington’s Venezuela tanker blockade. Reuters cited WTI around $56.38 and Brent around $60.10 in one update. ^[33]

Those moves mattered for equities: higher crude helped lift energy shares in Europe and supported sentiment across Gulf markets. ^[34]

Gold and silver: precious metals stay hot

Gold held near record territory while investors digested both softer U.S. inflation and the distorted data backdrop. Reuters reported spot gold around $4,333/oz, while silver hovered near record levels (around $66.36/oz after touching $66.88). ^[35]

Analysts cited by Reuters see a path to $70 silver in 2026 if rate cuts continue, reflecting how macro expectations are spilling into commodities and, indirectly, mining and materials equities. ^[36]

Emerging Markets and the Middle East: EM Stocks Dip; Gulf Markets Mostly Higher

EM snapshot: cautious risk mood

Emerging market stocks dipped as geopolitics and AI‑linked volatility returned to the foreground. Reuters’ EM wrap showed:

EM stocks: down 0.2%
EM currencies: up 0.1% ^[37]

China’s mainland session was mixed (Shanghai slightly higher; CSI300 lower), while Eastern European FX was sensitive to inflation and rate‑cut expectations. ^[38]

Gulf: oil steadiness lifts sentiment; Saudi rebounds from two‑year low

Most Gulf markets ended higher. Saudi Arabia’s index rose 0.4% after hitting around a two‑year low, while Abu Dhabi snapped a losing streak. Qatar fell again, and Dubai dipped, according to Reuters. ^[39]

The same story reappeared: when oil stabilizes and global risk sentiment improves, Gulf equities often catch a bid—especially financials and energy‑linked names. ^[40]

Forecasts and Outlook: What to Watch Next for Global Stock Markets

1) The “next data print” problem in the U.S.

Thursday’s CPI surprise was market‑friendly, but investors are openly wrestling with how much weight to put on it because the shutdown disrupted collection and removed key monthly context. Expect outsized sensitivity to the next clean set of inflation and labor data, especially December releases. ^[41]

2) Bank of Japan decision could reset global rates and FX volatility

With a BOJ hike widely expected, global markets will watch not just the move but the tone: guidance on the pace of tightening in 2026 could ripple into global bond yields, the yen, and rate‑sensitive equities worldwide. ^[42]

3) Europe’s 2026 equity story hinges on Germany—MEGA trade still unproven

One of today’s most consequential medium‑term themes is whether Europe can sustain renewed interest after its strong first half of 2025. Reuters’ “MEGA” (Make Europe Great Again) analysis argues that investor enthusiasm now hinges on proof that German fiscal changes translate into growth and earnings power in 2026, not just headlines. ^[43]

4) AI valuations remain the market’s main fault line

Even on an up day, global equities remain highly exposed to how investors assess the AI buildout: capex cycles, data‑center economics, and whether revenue growth justifies valuations. Micron’s forecast steadied nerves today, but Japan’s tech selloff shows how quickly the mood can turn. ^[44]

5) Oil geopolitics: headline risk stays high

The Venezuela blockade and Russia sanctions headlines are now feeding directly into crude pricing—and by extension into inflation expectations, energy stocks, and Gulf market performance. ^[45]

Bottom Line for Global Stock Markets on 18 December 2025

Global equities improved into the session as softer U.S. inflation and central‑bank decisions eased pressure on risk assets—yet the rally is still built on uneven ground. AI‑linked volatility remains intense, U.S. data integrity is temporarily compromised by shutdown-related gaps, and the next few central‑bank signals—especially from Japan—could reset the global risk picture quickly. ^[46]

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