EconoTicker

U.S. equities finished last week without a “Santa Claus” rally, underscoring a choppier risk tone into year-end. Friday’s close was modestly constructive—Dow +0.7%, S&P 500 +0.2%, while the Nasdaq was largely flat—but the broader week still lacked a sustained upside push. Early in the new week, futures were mixed-to-firmer: S&P 500 Futures +0.1% to 6,908.25, Nasdaq 100 Futures +0.3% to 25,461.75, while Dow Futures -0.1% to 48,581, suggesting a tentative risk bid led by growth stocks even as broader positioning remains cautious.

Market impact: Mildly supportive for near-term risk sentiment—Nasdaq-led strength hints at selective dip-buying, but the absence of a Santa rally keeps the tape vulnerable to headline risk and early-year re-positioning, with rates and macro data likely to dictate follow-through.

Equity markets across the Asia-Pacific region are set to close 2025 higher, with Australia’s S&P/ASX 200 on track for a 7% annual rise and India’s Nifty 50 heading for a 10% gain. Singapore’s Straits Times Index has outperformed regional peers, advancing roughly 23% over the year, supported by financials and resilient domestic demand.

Market impact: Broad-based equity gains reinforce Asia-Pacific risk sentiment, though market leadership divergence may shape capital flows into 2026.

Mainland and Hong Kong equity markets are closing 2025 with solid advances, with China’s Shanghai Composite on track for an 18% annual rise and Hong Kong’s Hang Seng Index up nearly 28%. The gains reflect improved investor confidence, policy support, and stronger performance in technology and cyclical sectors.

Market impact: Strength in Chinese and Hong Kong equities supports regional risk appetite, though sustainability will depend on follow-through from policy stimulus and earnings momentum.

Goldman Sachs estimates that major AI “hyperscalers” have invested nearly $400 billion in 2025 and are set to increase spending to almost $530 billion in 2026. The scale of capital expenditure underscores the intensifying race to build AI infrastructure, spanning data centers, advanced chips, and cloud capacity, with significant spillovers into semiconductors, power demand, and industrial supply chains.

Market impact: Sustained AI-driven capex supports semiconductor, data center, and infrastructure-related equities, while reinforcing long-term demand for energy and industrial metals.

Shares of European weapons manufacturers have surged around 55%, driven largely by signals from U.S. President Donald Trump that Washington may scale back its military protection of Europe. The prospect of reduced U.S. security guarantees has pushed European countries and other NATO members toward accelerated rearmament, sharply boosting defence-sector valuations. The shift has also supported financials, helping European banking stocks post their strongest annual performance since 1997.

Market impact: Rising defence spending expectations are reshaping European equity leadership, lifting defence and banking stocks while reinforcing a structural shift toward higher fiscal outlays and credit demand.

The so-called “Magnificent Seven” U.S. technology giants have shown signs of losing momentum since Nvidia became the world’s first $5 trillion company in October. The cooling in tech leadership has coincided with a sharp correction in cryptocurrencies, with bitcoin losing roughly one-third of its value, signalling a broader pullback in high-beta and speculative assets after a strong run earlier in the year.

Market impact: The combination of softer mega-cap tech performance and a steep crypto sell-off points to a shift toward more selective risk-taking and heightened sensitivity to valuation and liquidity conditions.

World equity markets have rebounded sharply from April’s “Liberation Day” tariffs-driven selloff, with global stocks up around 21% in 2025. The rally marks the sixth year of double-digit gains in the past seven, underscoring resilient risk appetite despite ongoing trade and policy uncertainty.

Market impact: Sustained equity strength supports global risk sentiment and keeps capital flows tilted toward stocks, though valuations and policy risks remain key watch points.

U.S. equities finished broadly weaker on Tuesday, extending the late-December pullback that has pressured sentiment. The S&P 500 fell 0.1%, while the Dow Jones Industrial Average and NASDAQ Composite both closed 0.2% lower, reflecting cautious positioning and profit-taking into year-end amid thinner liquidity.

Market impact: Mild risk-off signal—near-term pressure on equities, with flows sensitive to macro headlines, rate expectations, and year-end positioning dynamics.

Tech giants, including Meta, are intensifying AI investment via targeted acquisitions and high-profile talent hires amid escalating competition. Earlier this year, Meta invested in data-labeling firm Scale AI in a deal that valued the company at $29 billion and brought in its 28-year-old CEO, Alexandr Wang, underscoring how strategic capital and leadership recruitment are increasingly bundled to speed up AI product execution.

Market impact: Supportive for AI-linked valuations and deal momentum—positive for the “AI infrastructure” ecosystem, but can add scrutiny on big-tech spending discipline and ROI as capex and acquisition costs rise.

Meta said it will acquire Chinese-founded AI startup Manus as it accelerates the rollout of advanced AI features across its platforms. Financial terms were not disclosed, but a source with direct knowledge of the matter valued the Singapore-based firm at $2–3 billion; Meta plans to integrate Manus’s technology into products, including Meta AI.

Market impact: Modestly supportive for Meta’s AI narrative and broader “AI agents” deal momentum; near-term market reaction should hinge on integration execution, regulatory scrutiny, and Meta’s capex/monetization outlook.

Six Chinese companies began trading in Hong Kong after raising about HK$6.99 billion (~$900 million), with most opening above their IPO prices, rounding out a strong finish to a resurgent year for listings. The upbeat debut tone reinforces improving risk appetite for China-linked growth themes and supports expectations that Hong Kong’s equity-capital-markets activity can carry into early 2026, following a year in which the city led Asia’s ECM league tables.

Market impact: Mildly bullish for HK equities/HKEX and China listing sentiment—supports brokers and IPO-linked flows; broader spillover to CNH/risk assets depends on follow-through in the deal pipeline and macro news flow.

Asian equities were uneven, with Japan’s Nikkei 225 and TOPIX both down 0.3%, keeping the tone cautious in North Asia. South Korea’s KOSPI was largely flat, while Singapore’s Straits Times rose 0.6%, bucking the broader regional softness. India’s Nifty 50 dipped 0.1%, and Australia’s ASX 200 was flat. China was modestly higher, with the Shanghai Composite up 0.1%, while Hong Kong’s Hang Seng led gains, climbing 1%—suggesting a selective risk bid concentrated in HK names.

Market impact: Neutral overall—HK outperformance is mildly risk-supportive, but Japan’s weakness and mixed regional breadth limit follow-through; FX and commodities likely remain range-bound without a clearer directional catalyst.