Global markets closed out 2025 on a mixed note as investors navigated a holiday-shortened week, lighter volumes, and ongoing economic data. While short-term moves were modest, many major equity markets delivered strong gains over the year.
United States
US equities dipped slightly in the shorter week, although most major indices finished 2025 with double-digit gains for the third consecutive year. The Nasdaq Composite was the weakest performer, followed by the Russell 2000 and the S&P 500, while the Dow Jones Industrial Average and S&P MidCap 400 proved relatively resilient.
The energy sector was one of the few areas to post positive returns, supported by higher oil prices amid geopolitical tensions. Encouraging signs emerged from the housing market, with pending home sales recording their strongest monthly increase in nearly three years. House prices also rebounded modestly, particularly in the north-east and mid-Atlantic regions.
Labour market data remained strong, with weekly jobless claims falling for the third consecutive week. In fixed income markets, Treasury yields were mixed. Investment-grade corporate bonds posted negative returns, whereas high-yield bonds outperformed amid lighter trading volumes. Federal Reserve minutes indicated some division among policymakers over the path of rates, though markets reacted calmly.
United Kingdom
The FTSE 100 enjoyed a very strong year, rising by 21.5% in 2025 and briefly surpassing 10,000 points for the first time during the week. Overall equity markets were supported by improving economic sentiment, although housing data showed a slight unexpected decline in December. The Nationwide Building Society’s house price index fell 0.4% sequentially, reversing modest gains from November, highlighting ongoing caution in the UK housing market.
Europe
European equities advanced broadly, with the STOXX Europe 600 Index reaching a new high and closing the year with its best annual performance since 2021. Germany’s DAX, France’s CAC 40, and Italy’s FTSE MIB all posted weekly gains. Inflation trends were mixed: Spain’s headline inflation eased, although core inflation remained steady, while in France, registered unemployment fell month on month but remained higher than a year ago. In Sweden, central bank officials indicated that interest rates are likely to remain on hold through 2026.
Japan
Japanese equities fell modestly in a holiday-shortened week, though markets ended 2025 strongly, driven by technology and semiconductor stocks benefiting from AI demand, alongside construction shares. The yen remained weak against the US dollar, prompting speculation of possible intervention. Japanese government bond yields rose to the highest levels since 1999, reflecting expectations of gradual monetary tightening. The Bank of Japan increased its key interest rate to 0.75% in December and signalled further gradual rate rises may be appropriate.
China
Mainland Chinese markets were mixed, with the CSI 300 declining slightly and the Shanghai Composite edging higher. Hong Kong equities rose by around 2%. Manufacturing data showed modest expansion in December after months of contraction, suggesting policymakers may adopt a measured approach to stimulus in 2026, although some analysts advocate more aggressive measures to boost domestic consumption.
Other Key MarketsIn Colombia, markets reacted cautiously to a larger-than-expected minimum wage increase for 2026, which could raise inflation and prompt higher interest rates. South Korea began the new year strongly after one of the world’s best-performing equity markets in 2025, buoyed by record export levels in semiconductors, automobiles, shipbuilding, and emerging consumer sectors.
Global markets enter 2026 with momentum supported by resilient labour markets, selective policy easing, and stabilising economic data, despite ongoing uncertainties in currencies, commodities, and geopolitical developments.
Things to Watch in the Week Ahead:
UK inflation data: Consumer Price Index figures for December will be closely watched for signs of easing price pressures and their impact on household budgets.
UK labour market: Employment and wage updates will indicate whether consumers can sustain spending in early 2026.
Bank of England signals: Any commentary from the BoE could influence interest rate expectations for the first quarter of the year.
US inflation and retail: CPI, PPI, and retail sales data will provide insight into the trajectory of inflation and consumer demand.
US housing activity: Pending home sales, mortgage applications, and building permits will shed light on the recent rebound in the housing market.
Eurozone activity: Early January manufacturing and inflation releases in Germany, France, and Italy will indicate the health of the post-holiday European economy.
China economic indicators: Manufacturing PMIs and trade data will be watched for signs of stabilisation or renewed growth.
Commodities and currencies: Oil prices, metals, and major currency movements (GBP, EUR, JPY, USD) will respond to central bank commentary, inflation trends, and geopolitical developments.
Weekly Update
5th January 2026
Markets Data
Index
FTSE 100
S&P 500
NASDAQ
Dow Jones
MSCI EM
Nikkei 225
EuroStoxx 50
GBP/USD
GBP/EUR
EUR/USD
Brent Crude ($/barrel)
Gold (USD/oz)
Value
9951
6949
23678
49194
1429.48
50905
5923.57
1.34
1.147
1.17
60.75
4425
1yr Return
21.5
17.9
21.0
13.4
33.5
26.0
18.0
9.0
6.6
2.9
-19.7
60.0
Data as of 2nd January 2026
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.