Global financial markets over the past twelve months have been shaped by a combination of geopolitical shocks, shifting macroeconomic conditions and significant political developments across major economies. Since mid-2024, elections or leadership changes in the United Kingdom, France, Germany, Japan, Canada and Australia all contributed to varying degrees of domestic policy uncertainty. The most consequential political event, however, was Donald Trump re-election in November 2024.
Trump's Tariff Shock
Following the US election, American equities initially rallied on expectations of renewed fiscal stimulus and deregulation. However, from January onwards, investor sentiment soured markedly as the new administration announced sweeping tariffs targeting a broad set of America’s trading partners. Markets experienced sharp swings, at times reminiscent of the volatility seen during the early months of the Covid-19 pandemic. A court ruling that the president lacked authority to impose the full scope of the proposed tariffs temporarily steadied markets, as did a subsequent 90-day pause announced by the administration. Even so, the prospect of further trade-policy disruption continued to overhang global risk assets.
Geopolitical Worries Continue
Geopolitical tensions added further complexity. The war in Ukraine remained unresolved, sustaining pressure on European energy markets and contributing to periodic risk-off sentiment. Meanwhile, conflict in parts of the Middle East generated repeated concerns about potential supply disruptions in global oil markets. Although these did not translate into prolonged price spikes, they reinforced the broader environment of uncertainty that characterised much of the period.
Global Economies Show Resilience
Global macroeconomic data painted a mixed picture. The US economy remained relatively resilient, continuing to anchor global growth. Europe’s economy struggled with weak industrial output and elevated energy costs, while China’s recovery was uneven, with domestic demand subdued despite pockets of strength in exports and manufacturing. Against this backdrop, global equity markets were broadly positive but increasingly bifurcated: large-cap technology and quality-growth companies performed well, while trade-sensitive and domestically cyclical sectors lagged.
Fiscal Worries in Britain and France
In the UK, politics shaped domestic market sentiment. Chancellor Rachel Reeves’ Budgets emphasised fiscal discipline and long-term investment, but tax rises and increases in employers’ National Insurance contributions have had a deleterious effect on consumer and business confidence, and on the employment market. Concerns about fiscal sustainability in France—following political gridlock and widening deficits—spilled over into other heavily indebted markets, contributing to a rise in UK long-dated gilt yields to levels last seen in the late 1990s. Credit markets experienced periods of widening in response to geopolitical tensions and tariff speculation, though overall default rates remained contained.
Gold Continues to Soar
One of the most notable market developments was the continued strength of gold. Amid uncertainty over global trade, geopolitics and fiscal stability, gold prices surged past $3,500, supported by robust safe-haven demand and ongoing central-bank accumulation. Commodities more generally were mixed: industrial metals were weighed down by uneven Chinese demand, while energy markets experienced intermittent but short-lived volatility linked to geopolitical events.
In currency markets, the US dollar weakened materially, reflecting concerns about America’s deteriorating fiscal position, a major sovereign credit downgrade, and rising Treasury yields. Meanwhile, the pound strengthened against the dollar, supported by relative political stability following the UK election.
12-Month Review of Markets
10th December 2025
12-Month Markets Data
Index
FTSE 100
S&P 500
NASDAQ
Dow Jones
MSCI EM
Nikkei 225
Euro 50
GBP/USD
Crude Oil
Gold
Value
9,645
6,870
23,578
47,955
1,382
50,582
5,726
$1.33
$58.88
$4,187
YTD
22.1%
10.4%
15.4%
6.8%
23.9%
21.9%
26.5%
6.2%
-10.7%
48.2%
This publication is intended to be Hexagon Wealth’s own commentary on markets for clients. Hexagon Wealth Limited is authorised and regulated by the Financial Conduct Authority. FCA number 483403. Hexagon Wealth Limited is registered in England and Wales under company number 04503414. Whilst Hexagon Wealth uses reasonable efforts to obtain information from sources which it believes to be reliable, it makes no representation that the information or opinions contained in this document are accurate, reliable or complete and will not be liable for any errors, nor for any actions taken in reliance thereon. Such information and opinions are subject to change without notice. We expect readers to rely on their personal views on the subject when reading the opinions expressed above and contact their financial adviser before taking any action. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this document constitutes advice to undertake a transaction, and if you require professional advice please contact your financial adviser.