What We're Seeing: December Upswing – 1 December 2025

The Week in Brief

US stocks kicked off December 2025 on a mild upswing. The S&P 500 extended its late-November rebound, ending the week near record highs. Investor attention was on Fed succession and global policy, but the backdrop remained supportive.

Global indices were mostly higher, and risk assets were broadly bid. The synchronised rally suggests that investor confidence extends beyond US shores. European and Asian markets participated in the year-end strength.

Fixed Income and Currencies

The 10-year Treasury yield was little changed on the week, hovering around 3.8%. Bond markets were quiet, with investors waiting for the final Fed meeting of the year. The consensus expects one more cut, but guidance for 2026 is the focus.

Japanese bond volatility drew some safe-haven interest, as policy normalisation in Japan continues to create ripples. The yen strengthened modestly, but the moves were contained.

The US dollar weakened versus most major currencies. The softer greenback reflects expectations of continued Fed easing and global rebalancing flows.

Commodities

Oil finished sharply higher on supply concerns. Tensions in the Middle East and OPEC+ discipline kept crude well-supported. The energy sector benefited, posting gains that outpaced the broader market.

Gold recovered during the week, bouncing from recent lows. The combination of a weaker dollar and lower real yields supported the precious metal.

Our Read

We are approaching year-end with a constructive view. The rally has been broad-based, fundamentals are supportive, and the Fed is providing tailwinds. This is a favourable environment for risk assets.

The main questions heading into 2026 are about sustainability. Can earnings growth continue at current rates? Will the Fed keep easing, or will inflation concerns resurface? Will geopolitical tensions disrupt the expansion?

Our base case is that the soft landing is achieved and the expansion continues. This supports maintaining overweight positions in equities, with a focus on quality across styles.

What Could Change Our View

The risks are familiar: inflation surprises, geopolitical shocks, or a sharper-than-expected economic slowdown. We are also watching valuations, which remain elevated by historical standards. For now, the trend is positive, and we are content to ride it into the new year.

This is informational commentary, not investment advice.