Global financial markets finished the year on a strong note, with U.S. and Asian equities climbing, commodities such as gold and silver hitting historic highs, and major central banks completing their most aggressive monetary easing in years — setting a backdrop of optimism mixed with geopolitical risks heading into 2026.
World equities were broadly higher late in the year, buoyed by robust economic data and expectations that major central banks will continue cutting interest rates to support growth. In the U.S., the S&P 500 surged to record territory, reflecting strong corporate earnings and renewed investor confidence in a “Santa rally,” while the Dow Jones Industrial Average also climbed near multi-year highs. Asian markets extended their strong 2025 performance, with the MSCI Asia-Pacific index outside Japan up modestly and Japan’s Nikkei completing a standout year.
Commodities continued to draw attention, with gold and silver reaching unprecedented price levels as investors sought safe havens amid monetary policy shifts and geopolitical uncertainty. Precious metals’ rally underscored lingering risk aversion in global portfolios even as equities rose.
At the policy level, central banks around the world delivered the broadest monetary easing cycle since the financial crisis, cutting benchmark rates deeply across developed and emerging economies to cushion growth and encourage lending. This coordinated easing contributed significantly to risk asset performance in 2025 and is expected to shape market expectations in 2026.
Geopolitical tensions remained a market influence, particularly with extended economic sanctions between the EU and Russia and ongoing conflicts that continue to affect energy and safe-haven flows, although peace talks and diplomatic engagements are progressing more slowly than hoped.
Looking at currencies and bonds, the U.S. dollar softened against major peers, supporting commodity and equity prices, while yields continued to trend lower as rate cuts factored into fixed-income strategies. Investors are now balancing optimism about growth with caution over potential tightening risks and geopolitical flashpoints.
