Updated 4:15 p.m. EST (ET) — Thursday, Dec. 18, 2025
Global stock markets ended Thursday with a renewed risk-on tone after a week marked by jittery trading in AI-linked megacaps. A cooler-than-expected U.S. inflation print and a sharp rebound in semiconductor shares helped stabilize sentiment, pushing a global equities gauge higher and easing Treasury yields.
Earlier in the day, however, the mood was far from settled. Asian markets absorbed another round of questions about whether the AI buildout can justify the scale of capital spending and debt-funded infrastructure now tied to data centers and next-generation chips—a theme that has whipsawed investors in recent sessions.
Below is where major markets finished for Dec. 18 and the key catalysts shaping the late-December outlook.
Market snapshot
United States (close)
- S&P 500: 6,773.91, +0.78%
- Nasdaq Composite: 23,004.92, +1.37%
- Dow Jones Industrial Average: 47,955.33, +0.14%
Europe (close)
- STOXX 600: 585.29, +0.93% (snapping a two-session slide)
- FTSE 100: +0.65%
- DAX: about +1%
- CAC 40: about +1%
Asia (Thursday close in the region)
- Nikkei 225: 49,001.50, -1.03%
- Hang Seng: 25,498.13, +0.12%
- Shanghai Composite: 3,876.37, +0.16%
- KOSPI (South Korea): 3,994.51, -1.53%
Wall Street today: Soft CPI, falling yields, and a semiconductor surge
U.S. equities snapped a four-session skid, with the Nasdaq leading gains as chipmakers and AI-linked names recovered from the prior day’s selloff. The late-day lift was rooted in two developments: a softer inflation update that pushed bond yields lower and a set of AI-demand signals from the semiconductor complex that soothed fears of a broader “AI trade” reset. TradingView+1
The data that moved markets
The delayed Consumer Price Index showed annual inflation of 2.7% in November, below economists’ expectations cited by Reuters (3.1%). Core inflation was also described as cooler than expected. The report came with a major caveat: U.S. officials did not publish month-to-month CPI changes after a 43-day government shutdown disrupted data collection, leaving investors to debate how “clean” the signal really is. Reuters+1
Even with that uncertainty, the market response was straightforward: rate-cut expectations firmed, and yields moved lower. Reuters reported the U.S. 10-year Treasury yield falling to about 4.12%, with the 2-year also lower—moves that typically support growth stocks and longer-duration assets such as big tech.
The AI narrative flipped back toward confidence
The chip rally did a lot of the heavy lifting. Reuters pointed to Micron’s upbeat outlook tied to AI-related demand as a key reason investors rotated back into semiconductors and related tech winners. Market strategists quoted by Reuters described AI sentiment as a “rollercoaster,” and Thursday landed on the “confidence” side of that swing. Reuters+1
Outside semis, U.S. trading also reflected a classic late-year pattern: a modestly constructive macro datapoint plus oversold positioning can amplify a rebound. Reuters quoted strategists framing this stretch of the calendar as seasonally supportive for equities, especially when markets interpret news as incremental confirmation of disinflation.
Notable U.S. movers in the session
Several single-stock stories added fuel:
- Consumer discretionary outperformed, helped by headlines around Lululemon and activist positioning.
- Trump Media & Technology jumped after announcing a deal involving TAE Technologies.
Associated Press also highlighted the same core drivers—cooler inflation and Micron’s results—while noting the broad drop in Treasury yields that accompanied the equity rebound.
Europe: STOXX 600 climbs as ECB holds and BoE cuts, but signals restraint
European equities ended higher, joining the global rebound once U.S. inflation data reinforced the view that the next major policy move in many economies is likely easing—or at least a longer pause.
The STOXX 600 rose 0.93% to 585.29, with Germany’s DAX and France’s CAC 40 each up around 1% on the day.
Central banks set the tone
Two decisions mattered most for European risk assets:
European Central Bank: The ECB held rates, and reporting around the meeting emphasized a somewhat more upbeat tone on the economy. In parallel, bond markets and traders continued to debate what “higher for longer” means after a cutting phase—particularly with Germany’s benchmark yield moving in response to shifting expectations about the timing of any eventual hikes. TradingView+1
Bank of England: The BoE delivered a widely watched move, cutting rates by 25 basis points to 3.75%, but paired it with messaging that suggested limited scope for rapid follow-on easing. The FTSE 100 finished up 0.65%, while mid-caps also advanced, with rate-sensitive corners of the market reacting to the policy turn.
The BoE decision landed after a surprise UK inflation cool-down that had sharpened the market’s focus on near-term easing.
Asia: Nikkei sinks on tech pressure while China steadies and Hong Kong edges up
Asia delivered the more cautious half of Thursday’s global story. The region’s tech-heavy markets remained sensitive to concerns about AI-related spending and the durability of the data-center investment cycle—fears that had already shaken U.S. megacaps in the prior session.
Japan: The Nikkei 225 fell 1.03% to 49,001.50, ending at a three-week low per Reuters reporting carried by TradingView. The decline was tied to heavyweight tech names and continued debate about the AI business outlook and data-center economics.
South Korea: The KOSPI dropped 1.53% to 3,994.51, a steeper decline than most major benchmarks, as a weaker currency and tech-valuation nerves weighed on sentiment.
China: Mainland equities were steadier. The Shanghai Composite ended up 0.16% at 3,876.37, with Reuters-linked coverage pointing to rotation into more defensive sectors even as tech and property names remained a drag.
Hong Kong: The Hang Seng added 0.12% to finish at 25,498.13, signaling a more balanced tone than Japan and Korea despite ongoing pressure in parts of the tech complex.
Bonds, currencies, and commodities: Yields dip, the dollar steadies, oil edges higher
Thursday wasn’t just an equity story. Cross-asset moves reinforced the narrative of easing inflation pressure and a market trying to price “less restrictive” policy—without fully committing to a straight-line rally.
Rates
Reuters reported Treasury yields lower, with the 10-year around 4.12% and the 2-year around 3.462%, as the CPI read bolstered hopes for additional Fed cuts beyond the official baseline.
FX
Currency markets were choppy but broadly consistent with the rate story:
- Dollar index: about 98.43, slightly higher on the day
- EUR/USD: about $1.1725
- GBP/USD: about $1.3386 after the BoE cut
- USD/JPY: about 155.51, with Japan’s policy decision looming
Oil and gold
Oil prices rose for a second day as traders weighed the risk of further sanctions and supply disruptions linked to Venezuela and Russia-related tensions, with WTI settling near $56.15 and Brent near $59.82.
Gold eased modestly in Reuters’ late session wrap, even after a historic run that has kept precious metals in focus across global portfolios.
Forecasts and what markets are watching next
With year-end liquidity approaching and central banks crowding the calendar, investors are narrowing in on a short list of catalysts that can still reshape risk appetite before 2026 begins.
1) The Fed path: markets still leaning more dovish than the baseline
Traders are actively re-pricing the timeline for the next policy shift. Reuters cited a 58% chance of a dovish Fed move in March based on CME’s FedWatch tool.
At the same time, strategists speaking to Reuters stressed that inflation data quality remains a real issue after the shutdown-related gaps—meaning markets may demand confirmation in the next inflation cycle before fully committing to aggressive easing bets.
2) Fed leadership uncertainty becomes a market variable
One of the most consequential macro “forecasts” now hanging over 2026 is leadership at the U.S. central bank. Reuters reported that President Donald Trump has interviewed three candidates to replace Fed Chair Jerome Powell next May—Kevin Hassett, Christopher Waller, and Kevin Warsh—and that all three have expressed a preference for lower interest rates, even as they diverge on other parts of central banking. Reuters+1
Markets tend to treat Fed independence and reaction function as long-duration assets in their own right; the closer the transition gets, the more likely it is to influence term premia, the dollar, and equity risk premiums.
3) Japan’s decision is next on the global calendar
Reuters-linked reporting highlighted that investors are bracing for an expected Bank of Japan rate hike on Friday, which has kept USD/JPY and regional rate markets on alert and added pressure to Japan’s equity sentiment.
4) After-hours corporate signals: logistics as an economic temperature check
For investors looking beyond CPI, corporate updates are providing real-time texture on demand. FedEx reported higher quarterly profit and revenue and raised the low end of its full-year earnings forecast, citing peak-season pricing actions and cost cuts that helped offset softer volumes—an update markets often read as a signal on global trade and consumer shipment trends.
The bottom line for Dec. 18
Global stock markets finished Thursday with a familiar late-cycle pattern: inflation relief plus a tech-led rebound helped risk assets recover from AI-valuation jitters, while central bank decisions in Europe and looming policy risk in Japan kept the macro backdrop in motion.
Whether this rebound has staying power into the final stretch of December may depend less on a single datapoint—and more on whether the next inflation prints, the BOJ decision, and evolving Fed-cut expectations can deliver the consistency markets have been craving.
