General Market Analysis – 12/12/25
IC MarketsUS equity markets were mixed overnight as investors continued to weigh the implications of the Fed's latest rate cut.
US Stocks Mixed After Fed – Dow up 1.3%
US equity markets were mixed overnight as investors continued to weigh the implications of the Fed's latest rate cut. The Dow led the way, jumping 1.34% to finish at 48,704, while the S&P 500 managed a modest 0.21% rise to 6,901, both securing fresh record closes. The Nasdaq, however, slipped 0.25% to 23,593 after tech heavyweight Oracle issued a weaker-than-expected forecast, reigniting concerns that parts of the AI sector may be running ahead of fundamentals.
In FX, the US dollar softened again, with the DXY easing 0.29% to 98.34, even as Treasury yields edged higher. The 2-year yield nudged up 0.3 bps to 3.541%, while the 10-year added 1 bp to 4.157%. Oil extended its recent decline, with Brent slipping 0.96% to $61.62 and WTI down 0.91% to $57.93, as markets drew optimism from renewed hopes for progress toward a Ukraine peace deal. Gold rallied strongly, climbing 1.06% to $4,278.85, supported by haven flows and momentum following yesterday's Fed decision.
Investor Glasses Still Half Full for Christmas Drinks
Major US indices pushed higher in trading yesterday to hit fresh all-time high closes as investors continued to cheer the Fed's interest rate cut on Wednesday and advice that we will see at least one more in 2026. The Dow and S&P hit records, while the Nasdaq fell marginally, which wasn't a bad result given an 11% drop for Oracle.
The market seems to be driving forward into the year-end with the same 'glass half full' mentality that has carried it to records in 2025, and investors are happy to jump on that bandwagon. However, there are some that fear a significant early-2026 hangover could be coming their way, with growth tech firms involved in AI looking to be the highest risk for some sharp corrections in the current environment – as we saw with Oracle yesterday. In addition to those fears, the Fed left plenty of wiggle room for hawks out there as well, despite the market's initial reaction to Wednesday's cut – so for now, investors are happy to eat, drink, and be merry while the good times last, but are wary that things can sometimes look different in the cold light of a fresh new day – or fresh new year!
Markets Strong into the Weekend
With the macro calendar far quieter today, traders may still see swings across markets as they continue to digest the heavy run of central bank updates and geopolitical developments from earlier in the week. The Asian session is expected to have a relatively quiet start to the day; however, with products trading at significant levels, traders are expecting things to liven up as the day progresses.
The European session sees the release of the only tier 1 data of the day, with the UK GDP numbers due out. The month-on-month figure is expected to show just a 0.1% increase, and any deviation from this will see big moves in the pound, anything lower likely to put more pressure on the Bank of England ahead of next week's interest rate call. There is little on the calendar in the New York session today, which should see smoother trading conditions; however, as above, with indices at all-time highs and the Fed update still fresh in investors' minds, most traders are expecting another lively session.
