World Markets Today (10 December 2025): Asia Stocks Retreat, Europe Opens Soft Ahead of Fed Rate Cut

Global stock markets started Wednesday, 10 December 2025, in risk‑off mode. Asian equities mostly slipped and early European trade turned lower as investors waited for a U.S. Federal Reserve decision that is widely expected to deliver a third straight 25‑basis‑point rate cut, but potentially with a much tougher message about the path for 2026. ^[1]

Asia Market Wrap: Cautious Trade Before the Fed

Asian markets traded in narrow ranges but with a clear downward bias as traders chose not to take big positions before the Fed outcome and a slate of heavyweight U.S. tech earnings.

Broad picture

Across the region, most benchmarks fell:

Japan: The Nikkei 225 dipped around 0.1% to 50,602.80 at the close, after being down as much as 0.4% intraday. ^[2]
Hong Kong: The Hang Seng finished flat at 25,433.83, masking churn within tech and China‑exposed names. ^[3]
China: Shanghai’s Composite slipped about 0.2% to 3,900.50, extending losses seen as investors digested another month of factory‑gate deflation. ^[4]
Australia & New Zealand: Australia’s S&P/ASX 200 edged lower by roughly 0.1%, while New Zealand’s NZX 50 underperformed with a drop of about 0.6%. ^[5]
South Korea: The KOSPI traded modestly lower, with defensive and rate‑sensitive shares under pressure. ^[6]

From Tokyo to Sydney, the pattern was similar: low volumes, small index moves, and a strong reluctance to position aggressively either for or against a “Santa rally” before Fed Chair Jerome Powell speaks.

China data: Inflation stabilises, but deflation lingers

Fresh Chinese price data added nuance but not clarity:

Consumer price inflation (CPI) rose 0.7% year‑on‑year in November, a 21‑month high and ahead of expectations.
Producer prices (PPI) fell about 2.2% from a year earlier, marking roughly three years of continuous factory‑gate deflation. ^[7]

Equity traders read the numbers as evidence that consumer‑side disinflation may be easing, but that corporate pricing power remains weak. Mainland indices slipped, while Hong Kong’s more globally exposed stocks were steadier, helped by optimism that U.S.–China tech tensions may stabilise at the margin.

Tech and AI sentiment: Oracle and Broadcom in focus

A big piece of today’s mood music came from the AI trade rather than from Asia itself.

Earnings from Oracle and Broadcom, both seen as bellwethers for AI‑related cloud and semiconductor spending, are due after the U.S. close.
Options pricing implies double‑digit percentage swings (around ±10%) in these names around their results, underscoring how fragile sentiment is after November’s sharp AI‑driven sell‑off. ^[8]

Pepperstone’s Chris Weston warned that any hint of slower capex or more cautious AI spending plans could reverberate far beyond a single stock, hitting high‑valuation tech across regions.

India bucks the trend

India stood out as a relative bright spot in the Asia session:

The Nifty 50 rose 0.36% to 25,932.70.
The BSE Sensex also gained 0.36% to 84,967.39 by late morning in Mumbai. ^[9]

All 16 major Nifty sectors were in the green, with small‑caps and mid‑caps outperforming. Metals were particularly strong as silver’s surge to record global prices boosted shares of Hindustan Zinc and its major shareholder Vedanta. ^[10]

New listings also drew attention: e‑commerce company Meesho debuted with a ~46% premium to its issue price, a reminder that local risk appetite remains healthy despite global uncertainties. ^[11]

Japan and the yen: Fed vs. BoJ cross‑currents

Japan’s session was shaped by both the Fed and the Bank of Japan:

The Nikkei slipped only marginally, but moves were sharper beneath the surface, with exporters benefiting from a weaker yen while domestic names lagged. ^[12]
The yen remained under pressure as the euro and pound hit record or multi‑decade highs against it, even though the dollar eased slightly to around ¥156.6. ^[13]

Comments from BoJ officials about progress towards the 2% inflation target have kept alive expectations of a slow, incremental move away from ultra‑easy policy in 2026, but for now the policy gap with the Fed and ECB continues to weigh on the currency. ^[14]

Europe: Early Trading Soft as Stoxx 600 Extends Losing Streak

European markets opened with a whimper rather than a bang, mirroring Asia’s caution.

By about 08:08 GMT, the pan‑European STOXX 600 was down 0.1% at 577.43, on track for its fourth consecutive decline as traders shied away from big bets before the Fed announcement. ^[15]

Major indices

Germany & Spain: Leading benchmarks in both countries slipped around 0.1%, with industrials and financials weighing. ^[16]
France: The CAC 40 also eased 0.1%, as investors digested the narrow approval of the 2026 social‑security budget, which passed but at a clear political and fiscal cost for the government. ^[17]
United Kingdom: London’s FTSE 100 was broadly flat to slightly higher, supported by upbeat corporate updates even as the broader European tone stayed subdued. ^[18]

Sector movers and single‑stock stories

Beneath the quiet index moves, stock‑specific news drove sharper swings:

Insurers fell about 0.4%, dragged lower by Aegon, whose shares sank roughly 7–8% after the Dutch group confirmed plans to relocate its legal domicile and head office to the United States and laid out a complex restructuring path. ^[19]
Travel & leisure:TUI dropped around 3% as the travel giant guided to more modest sales growth for the coming year in what it described as a challenging backdrop. ^[20]
Homebuilders: UK builder Berkeley Group gained about 2% after reaffirming its profit guidance for fiscal 2026, even as it reported softer interim revenues. ^[21]
Mining:Anglo American rose roughly 1% after shareholders overwhelmingly backed a “merger of equals” with Canada’s Teck Resources, underscoring ongoing consolidation across industrial commodities. ^[22]

With sovereign bond yields in the euro area drifting slightly lower after a hawkish‑sounding run of ECB commentary earlier in the week, equity investors appear to be treating today’s session primarily as a holding pattern. ^[23]

Macro Backdrop: Fed, Yields, Dollar and the “Debasement Trade”

The single biggest driver of global risk sentiment today is the Federal Reserve’s December policy meeting.

What markets are pricing

Futures markets are assigning roughly an 85–90% probability that the Fed will cut its benchmark rate by 25 basis points to 3.50–3.75% later today. However, traders see only a slim chance of another move as soon as January, and expect no more than two cuts over the next 12 months, down from three previously. ^[24]

Key uncertainties:

Where the new 2026 “dot plot” lands relative to the market’s two‑cut view.
How Powell characterises the balancing act between still‑sticky inflation and a cooling labour market, especially given gaps in data following the U.S. government shutdown and delayed payrolls numbers. ^[25]

Bond markets: Yields higher into the decision

U.S. Treasuries have sold off into the meeting:

The 10‑year yield sits around 4.18–4.19%, up roughly 17 basis points so far in December, putting it on track for its largest monthly rise since May. ^[26]
The move has been led by the front and belly of the curve, as markets price a slower and shallower easing cycle even if tonight’s cut is delivered as expected. ^[27]

OANDA’s Elior Manier characterises tonight’s most likely outcome as a “hawkish cut” (70% base case), in which the Fed trims rates as a risk‑management step but uses the statement and projections to push back against hopes for rapid easing in 2026. In that scenario, he expects:

Rate‑cut probabilities for 2026 to fall.
The U.S. dollar to stay range‑bound rather than collapse.
Equity indices to correct modestly after what he describes as an “ecstatic” repricing following recent dovish comments from New York Fed President John Williams. ^[28]

More dovish or more hawkish outcomes remain on the table, but each carries its own volatility template: a very dovish message could send stocks and metals sharply higher while raising questions about Fed independence, whereas a surprise pause might spark a short‑term spike in the dollar and a choppy sell‑off in risk assets. ^[29]

Dollar, yen and euro

In currencies, Wednesday’s tone has been surprisingly calm given the stakes:

The dollar index is little changed on the day, with modest losses against the euro more than offset by strength versus some emerging‑market currencies. ^[30]
The yen remains the focal point: the euro and pound hit record or multi‑year highs against the Japanese currency, while the dollar trades just below recent peaks around ¥156.6. ^[31]
The euro is holding just above $1.16, broadly unchanged from late Tuesday. ^[32]

Commodities: Silver Steals the Show, Oil Edges Up

Silver and gold

In metals, silver is stealing headlines:

Prices have cleared the $60 per‑ounce threshold to hit a record around $61.45, more than doubling so far in 2025.
The rally reflects a mix of shrinking inventories and strong structural demand from solar panels, electric vehicles, data centres and AI hardware, according to industry estimates cited by the Silver Institute. ^[33]

Gold is trading near $4,200 per ounce, not far below October’s all‑time high of $4,381, as central‑bank buying and geopolitical risk keep a firm floor under the traditional safe haven. ^[34]

The surge in silver is already feeding through to equity markets, particularly in countries like India where Hindustan Zinc and Vedanta have become high‑beta plays on the metal. ^[35]

Oil: Quiet, but firm

Oil prices are calmer after a choppy start to the week:

WTI crude trades around $58.4 per barrel. ^[36]
Brent crude hovers just above $62 per barrel. ^[37]

Traders are weighing:

Restored production at Iraq’s West Qurna 2 oilfield, one of the world’s largest. ^[38]
Hopes for progress in peace talks over Ukraine, which could reduce some supply‑risk premia. ^[39]

For now, the Fed – not OPEC – is the main macro driver for crude.

How Today Fits into the Bigger 2025 Narrative

Today’s market action is less about dramatic moves and more about a reset of expectations after a powerful, liquidity‑fuelled rebound in October and November.

Several themes connect the Asia wrap and the first hours of European trade:

The Fed’s credibility is back at centre stage.
Analysts at OANDA and other houses flag a growing “debasement trade” narrative: investors are buying finite assets like stocks, crypto and metals as insurance against the risk that central banks cut too fast and too far. ^[40]
AI enthusiasm vs. earnings reality.
From Tokyo to Frankfurt, high‑multiple tech stocks are trading like options on AI capex, and tonight’s Oracle and Broadcom numbers are seen as a key test of whether last month’s shake‑out was a healthy correction or the start of something deeper. ^[41]
Policy divergence is driving FX and regional leadership.
The yen’s slide, the euro’s resilience, and India’s relative equity strength all stem from different points in the monetary‑policy cycle – with markets increasingly convinced that the Fed’s easing path will be slower than they hoped a few months ago. ^[42]
Europe’s politics remain a background risk.
The narrow passage of France’s 2026 social‑security budget, and corporate decisions like Aegon’s planned relocation to the U.S., highlight how political and regulatory shifts continue to influence capital flows and sector performance across the continent. ^[43]

What Traders Will Watch Next

As New York prepares to open and Europe moves deeper into its session, attention will focus on:

Fed decision and dot plot (2 p.m. EDT / 19:00 GMT): rate move, 2026 median dots, and any dissenting votes. ^[44]
Powell’s press conference: tone on data gaps, labour market, and tolerance for further easing. ^[45]
Oracle & Broadcom earnings: guidance on AI‑related cloud spend, chip demand and capex, with outsized moves expected given current options pricing. ^[46]
Follow‑through in silver, gold and EM FX once U.S. traders fully react to the Fed’s messaging. ^[47]

Until then, “wait and see” looks set to remain the dominant strategy in both Asia and Europe: modest index moves, busy single‑stock stories, and a global market that’s clearly braced for volatility – just not ready to front‑run it.