Asian Stocks Mixed Amid Holiday Closures as Wall Street Slips on Fed Division and AI Volatility

Economic

Stocks

Summary:

With several Asian markets closed ahead of the New Year, global stocks traded cautiously. U.S. indices edged lower after Fed minutes revealed a divided stance on rate cuts...

Mixed Sentiment in Asian Markets as Year-End Holidays Curtail Activity

Asian stock markets delivered a muted and mixed performance as 2025 drew to a close. Major exchanges in Tokyo and Seoul were closed on Wednesday for the year-end holidays, while other regional bourses operated under thin trading conditions. In China, the Hang Seng Index dipped by 0.5% to 25,715.16, continuing its volatile trajectory, while the Shanghai Composite inched up less than 0.1% to 3,966.39. Taiwan's Taiex rose 0.7%, showing resilience in contrast to broader regional hesitation. In Australia, the S&P/ASX 200 slipped 0.1% to 8,706.40.

The closures, including extended holidays in Japan and South Korea, constrained regional volumes and likely dampened investor engagement. With Wall Street’s Thursday session also set to pause, the global trading rhythm has naturally slowed as markets await a clearer start to 2026.

U.S. Markets Edge Lower as Fed Minutes Reveal Internal Divisions

On Wall Street, Tuesday’s session ended in mild retreat, as investors reacted to newly released Federal Reserve minutes from the December policy meeting. The S&P 500 lost 9.50 points, or 0.1%, to settle at 6,894.24. This marked a third consecutive day of modest declines, yet the index remains on track to post a full-year gain exceeding 17%. The Dow Jones Industrial Average shed 94.87 points to 48,367.06, while the Nasdaq Composite declined by 55.27 points to 23,419.08.

The subdued tone reflected a cautious interpretation of the Fed’s internal split over the most recent interest rate cut. The central bank’s decision to lower its target range to 3.50%–3.75% in December its third rate cut of the year was met with divergent views. Some officials pushed for more aggressive easing in response to labor market softening, while others warned that inflation risks remain elevated. This division, detailed in the meeting minutes, has reinforced expectations that the Fed will hold rates steady at its January 2026 meeting.

Technology Under Pressure While Meta Gains on AI Expansion

The tech sector continued to act as a drag on broader U.S. equities. High-profile names such as Nvidia and Apple fell by 0.4% and 0.2% respectively, under pressure from valuation concerns and AI-driven volatility. Despite their dominance in the S&P 500, these companies are facing increased scrutiny as 2026 begins, particularly over how sustainable their growth trajectories remain.

In contrast, Meta Platforms rose 1.1% after announcing the acquisition of AI startup Manus. The deal underscores Meta’s commitment to expanding its artificial intelligence capabilities across its ecosystem, from social platforms to emerging metaverse applications. The market’s response reflects a preference for tangible AI integration over speculative hype.

Commodities Surge as Economic Uncertainty Fuels Demand for Safe Havens

While equity markets treaded carefully, commodities saw sharp movements. Gold surged 1.4% to $4,386.30 per ounce, and silver prices jumped an impressive 10.9% a dramatic reversal from Monday’s sell-off triggered by margin hikes at the Chicago Mercantile Exchange. These gains were fueled by persistent economic uncertainty, investor demand for hedging instruments, and continued supply shortages.

Copper, often seen as a barometer of industrial health, surged 4.4%, closing out the year with a remarkable 40% annual gain. This growth is strongly tied to infrastructure expansion, particularly in energy systems and data centers. The accelerated development of artificial intelligence technology has significantly strained the global energy grid, leading to heightened demand for copper-based components. The relationship between AI expansion and copper demand is causal tech-sector growth directly necessitates more robust infrastructure, thus increasing copper consumption.

Oil and Bonds Reflect a Cautious Outlook

Oil markets remained subdued. U.S. crude fell slightly to $57.88 per barrel, while Brent declined 7 cents to $61.26, continuing their downward momentum amid concerns over excess supply and muted global demand.

In the bond market, Treasury yields were mixed. The 10-year yield rose slightly to 4.12%, while the 2-year yield held steady at 3.45%. These moves reflect a market still gauging the Fed’s next steps amid an evolving economic picture. Yields have broadly declined in 2025 as rate cuts signaled a shift from monetary tightening to support, particularly in the face of weakening consumer confidence and persistent inflationary pressures.

Economic Crosswinds Keep Fed in a Delicate Balancing Act

The macroeconomic environment remains highly complex. U.S. inflation continues to exceed the Federal Reserve’s 2% target, even as the job market shows signs of softening. Consumer confidence, a crucial economic indicator, has eroded over the course of the year due to higher living costs and trade-related disruptions. The ongoing trade war, spearheaded by the U.S., has intensified pricing pressures and threatens to further hinder economic expansion.

The Fed now finds itself navigating a precarious balancing act. Cutting interest rates could stimulate growth and ease employment losses, but it also risks adding more fuel to inflation. The conflicting nature of these outcomes is central to current market indecision and explains the Fed’s recent cautious tone.

As global markets prepare to transition into 2026, the final days of 2025 have been characterized by mixed signals. While Asian stocks offered no unified direction and U.S. equities wobbled under policy uncertainty, commodities rallied on supply constraints and macroeconomic concerns. With interest rate decisions hanging in the balance and inflation remaining stubborn, investor positioning is likely to stay cautious in early 2026, as markets search for clarity in a fragmented economic landscape.

Source: AP

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Gerik

Economic

Commodity

Oil Markets Close 2025 on a Bearish Note Despite Volatile Year

Crude oil markets ended 2025 on a downtrend, capping a year marked by sharp geopolitical flashpoints and growing economic uncertainty. Brent crude, the global benchmark, dropped nearly 18% its worst annual performance since 2018 settling around $61.27 per barrel for March delivery. Meanwhile, U.S. West Texas Intermediate (WTI) stood at $57.90, down approximately 15% for the year. This marks Brent’s third straight annual decline, the longest streak of yearly losses in its trading history, a milestone shaped more by structural supply-demand imbalances than transient market shocks.

Oil prices began the year with strong upward pressure. Former U.S. President Joe Biden exited office by tightening sanctions on Russian oil, directly affecting shipments to major importers like China and India. These disruptions, initially perceived as a catalyst for a price surge, were further amplified by intensified warfare in Ukraine, including Ukrainian drone strikes on Russian energy infrastructure. Additionally, a brief 12-day conflict between Iran and Israel in June, which threatened transit through the Strait of Hormuz a critical oil shipping route drove prices higher in mid-year trading.

However, these geopolitical events, though causal in generating temporary price spikes, failed to produce lasting effects. The price impact was diluted as the market swiftly adjusted to alternative supply chains, and as OPEC+ responded with a surprisingly aggressive ramp-up in production volumes.

OPEC+ Strategy Adds to Bearish Supply Dynamics

OPEC and its allies, collectively known as OPEC+, significantly influenced the year’s bearish tilt. Since April, the group added nearly 2.9 million barrels per day (bpd) to the global market. This production increase, though initially intended to stabilize market shares and offset lost supplies from sanctioned states, ultimately led to an oversupplied market environment. The decision to pause further hikes in Q1 2026 reflects a strategic recalibration, but the damage to price levels had already been done by year-end.

Forecasts for 2026 further highlight the imbalance. The International Energy Agency (IEA) expects supply to exceed demand by as much as 3.84 million bpd, while Goldman Sachs estimates the surplus at around 2 million bpd. These estimates imply that unless demand recovers unexpectedly or OPEC+ initiates a round of deep cuts, the oil glut is likely to persist well into the next year.

Macroeconomic Uncertainty and Tariffs Dampen Demand Growth

Another critical factor behind oil’s prolonged weakness in 2025 was the slowdown in global economic momentum. Rising tariffs, especially under President Donald Trump’s administration, have curtailed international trade flows and introduced renewed strain on fuel consumption patterns. As trade volumes contracted, the transportation and industrial sectors two of the largest consumers of oil saw muted demand growth.

Here, the link is causal: reduced economic activity led directly to weaker oil consumption, which, when combined with excessive supply, drove prices lower. Tariffs did not merely correlate with falling oil prices they contributed to a chain reaction of declining demand, weaker refinery margins, and reduced cargo flows.

Future Outlook Hinges on OPEC+ Cuts and Price Sensitivity

Looking forward, oil strategists, including Martijn Rats of Morgan Stanley, believe that deeper cuts will be necessary to stabilize the market if Brent prices fall below the low $50s. His forecast suggests that current prices while already soft are not yet low enough to compel OPEC+ into aggressive corrective action. If present price levels persist, the group may continue tapering their previous cuts instead of reintroducing fresh ones.

This outlook illustrates a responsive rather than proactive supply-side strategy, with producers opting to watch market signals before acting. The implication is that volatility may remain high, with any meaningful recovery in prices requiring both significant supply restraint and signs of demand revival both of which remain uncertain.

The oil market's performance in 2025 serves as a stark reminder that geopolitics, while influential in the short term, cannot override structural supply-demand fundamentals. Despite a series of global flashpoints ranging from war in Ukraine to tension in the Middle East the dominant force was the sustained oversupply and tepid economic activity. Unless major producers move decisively in 2026 or global trade conditions improve, oil may face another year of bearish pressure. The year ends not with a shortage, but with a surplus that the market has yet to fully absorb.

Source: Reuters

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Justin

Stocks

An electronic trading board at Hana Bank headquarters in central Seoul shows the benchmark KOSPI closing at 4,214.17 points on Tuesday, the last trading day of 2025. Yonhap

A greater number of Korean companies will be required to provide regulatory filings in English starting next year, offering enhanced transparency and wider market access to foreign investors, while the recently legislated "yellow envelope" pro-labor law will take effect, expanding labor-related liabilities of companies, officials noted Wednesday.

According to the Financial Services Commission, the scope of firms subject to mandatory English regulatory disclosures will be widened from companies listed on the Korea Composite Stock Price Index (KOSPI) with assets of 10 trillion won ($6.94 billion) or more to those with assets of a minimum of 2 trillion won.

The new disclosure requirement will take effect May 1.

The move is aimed at improving transparency and accessibility for overseas investors amid efforts to enhance the competitiveness of the local capital market, according to officials.

Another major change is the enactment of the yellow envelope law, scheduled to take effect in March.

The revision to the Labor Union Act is primarily designed to guarantee the bargaining rights of indirectly employed workers of subcontractors. It also prohibits companies from filing lawsuits for damages or provisional seizures against unionized workers, which many argue businesses have used to suppress strikes.

The labor reform measure is expected to increase compliance burdens for large conglomerates and foreign firms that rely heavily on subcontracting structures.

The country's minimum wage will increase 2.9 percent to 10,320 won per hour in 2026, lifting minimum monthly labor costs to 2.15 million won.

The government will also expand tax incentives for reshoring Korean firms and extend eligibility to companies that complete the downsizing of overseas operations within four years after newly establishing or expanding domestic facilities.

Foreign companies operating liaison offices in Korea will face stricter compliance requirements as well, as a newly introduced rule allows authorities to impose fines of up to 10 million won on foreign corporations that fail to submit necessary liaison office status reports or submit false information.

Source: Koreatimes

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Samantha Luan

Forex

Commodity

China has bought at least 8 million tons of US soybeans this year, according to people familiar with the matter, putting the world's top importer on track to meet a pledge it made two months ago as part of an apparent trade truce with Washington.

State-owned buyers have continued to book US cargoes into late December, the people said, asking not to be named as they are not authorized to discuss the purchases. That extends a buying spree that began in October and maintains a pace that has reassured American exporters, otherwise wary that Beijing's commitment might slip amid limited visibility and unclear deadlines.

The shipments booked so far are mostly for loading between December and March, the people said.

The White House said immediately after talks between President Donald Trump and Chinese counterpart Xi Jinping that China had pledged to buy at least 12 million tons of US soybeans by the end of this year. US officials later clarified the deadline was in fact the end of February. Beijing has not confirmed the commitment, but the Chinese government has moved to reduce tariffs on the crop and lifted import bans on three American exporters.

The return of Chinese buyers is welcome news for US exporters, and a reminder that buying patterns can change fast — but it is not yet a full reset. Even as Beijing takes US shipments, state-owned firms have bought large quantities of beans from Brazil and Argentina, the people said. Commercial buyers in particular have stayed on the sidelines when it comes to US purchases.

Almost 80% of Brazil's soy went to China in 2025, with exports through November climbing 16% compared to the previous year. That trade continued in December, even in a period when sales are seasonally weaker, and Brazil's upcoming harvest is forecast to be a record.

"We cannot confirm from China's side that anything beyond the 12 million tons has been pledged," said Ben Buckner, grains and dairy analyst at AgResource Co. The brokerage wrote in a note this week that China was seeking shipments and could reach a "soft target" of 10 million tons in 2025, with an additional 2 million tons in January.

Without a formal deal confirmed by both sides, traders say uncertainty over future sales is reinforcing pressure on soybean prices. Futures in Chicago are down nearly 7% in December, on track for the worst monthly performance since July 2024.

Matt Bennett, an Illinois corn and soy farmer, said many farmers have been "pleasantly surprised" with the steady flow of purchases from China so far, but added there has been frustration with the direction of soybean prices.

"From our vantage point, once you quantify that they're going to buy 12 million tons, you need something in excess of that to get everyone excited," Bennett, co-founder of farm advisory AgMarket.Net, said in a phone interview.

Trump earlier this month announced $12 billion in relief for US farmers, but growers are still waiting for the administration to provide details on how much they will get in payments promised by February.

Source: Bloomberg Europe

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Justin

Political

Economic

The Philippines Coast Guard said it deployed an aircraft on Tuesday to challenge a Chinese research ship that serves as a base for submersible vessels after it was spotted about 19 nautical miles off the coast of the northern Cagayan province.

The pilot issued multiple radio challenges to the CRV Tan Suo Er Hao seeking to confirm whether it was conducting marine research without Manila's consent, which would violate Philippine and international law, but received no response, the Philippine Coast Guard (PCG) said in a statement.

The 87.25‑metre deep‑sea research vessel, which left China's Hainan province earlier this month and entered the western part of the Philippine Exclusive Economic Zone, was then monitored heading east about 55.8 nautical miles off Santa Ana, Cagayan, the PCG said.

Cagayan, the northernmost province of Luzon near Taiwan, hosts one of nine military bases accessible to U.S. forces under the Enhanced Defense Cooperation Agreement (EDCA).

On Tuesday, China staged war games around Taiwan, firing rockets into surrounding waters and simulating strikes and blockades in drills dubbed "Justice Mission 2025," launched days after Washington announced a record $11.1 billion arms package for Taipei.

The PCG said the Chinese research vessel was detected through Canada's satellite-based Dark Vessel Detection system.

The Chinese Embassy in Manila did not immediately respond to a request for comment.

Source: Reuters

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FastBull Featured

Daily News

[Quick Facts]

1. Zelenskyy denies talks have broken down: Daily dialogue with the U.S. continues.

2. U.S. October home price growth hits lowest level in over 13 years.

3. Fed meeting minutes: Most officials expect further rate cuts.

4. Despite U.S. sanctions, oil tankers continue arriving in Venezuela.

5. Global stocks are poised to post the largest annual gain in six years, with the AI boom and Fed rate cuts the main drivers.

[News Details]

Zelenskyy denies talks have broken down: Daily dialogue with the U.S. continues

On December 30th, local time, Ukrainian President Volodymyr Zelenskyy denied Russian claims that U.S.–Ukraine talks had collapsed, stating that dialogue with the United States continues every day. Zelenskyy confirmed that he is currently negotiating with U.S. President Donald Trump regarding the deployment of U.S. troops to Ukraine, but emphasized that the decision will be entirely up to American leadership.

U.S. October home price growth hits lowest level in over 13 years

According to government data released on Tuesday, U.S. home prices rose at their slowest annual pace in more than 13 years in October, indicating that the long-sluggish housing market is gradually regaining affordability. The Federal Housing Finance Agency (FHFA) reported a 1.7% year-on-year increase in home prices for October, compared with an upwardly revised 1.8% rise in September. This marks the lowest annual price gain since March 2012. Current price growth is only a fraction of what it was during and immediately after the pandemic, when widespread work-from-home policies fueled a housing frenzy, driving annual price increases close to 20%.

Fed meeting minutes: Most officials expect further rate cuts

The Federal Reserve published minutes from its early December interest-rate meeting, revealing intense debate among officials over whether to support the labor market or remain concerned about still-elevated inflation. However, most officials believed that if inflation declines as expected, further rate cuts would be appropriate.

The FOMC ultimately approved a 25-basis-point cut by a vote of 9 to 3 — the highest number of dissents since 2019. Some officials explicitly stated they believe rates should remain unchanged for some time after the December 9th–10th meeting.

Officials were generally confident the economy would continue expanding at a moderate pace, while acknowledging downside risks to employment and upside risks to inflation. The minutes noted that most participants felt a more neutral policy stance would help prevent serious deterioration in the labor market.

Despite U.S. sanctions, oil tankers continue arriving in Venezuela

At least two oil tankers have recently arrived in Venezuela, with several more en route. It means that despite U.S. sanctions reducing exports to minimal levels, state oil company PDVSA is still working to expand floating storage and continue crude sales.

The U.S. has seized two shipments of full Venezuelan crude cargoes and deployed naval vessels to patrol the Caribbean Sea. This high-pressure stance has deterred many shipowners, prompting route changes or mid-journey returns. Only a few tankers are still following their original routes.

According to monitoring data from tanker tracking website TankerTrackers.com, some owners remain resolute. In recent days, at least two sanctioned tankers have reached Venezuela, while two unsanctioned ones are approaching its coast.

This week, nearly 20 tankers were visible anchored near José port, waiting for loading windows or departure instructions. Data and documents show that the volume of oil stranded on stationary tankers increased from 11 million barrels in mid-December to around 16 million barrels.

Global stocks are poised to post the largest annual gain in six years, with the AI boom and Fed rate cuts the main drivers

As 2025 enters its final trading day, global stocks are set to record their biggest annual gain in six years. Benefiting from Fed rate cuts and the artificial intelligence investment boom, the MSCI All Country World Index has risen 21% this year. Asian equities are expected to advance for a third consecutive year, with gains potentially reaching the highest level since 2017. Optimistic economic growth expectations, corporate earnings prospects, and accommodative monetary policy boosted the index from April's shock caused by Trump's tariff plans and repeatedly hit new highs.

However, entering 2026, markets face challenges such as elevated valuations and policymakers' rifts over further easing. Amanda Agati, Chief Investment Officer at Panix Asset Management Group, pointed out that for stocks to keep rising, a dovish Fed is needed. From a seasonal perspective, investors can remain optimistic about the new year: over the past decade, the MSCI All Country World Index has averaged a 1.4% rise in January, posting positive returns in six of those years.

[Today's Focus]

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Samantha Luan

Forex

Economic

Indian sovereign bonds eligible for inclusion in global indexes are on track for a record monthly outflow, as a weaker rupee and signs the central bank is nearing the end of its interest-rate cut cycle weigh on sentiment.

Global funds have sold 143 billion rupees ($1.6 billion) of bonds so far in December, according to Clearing Corporation of India data. That marks the biggest outflow since the so-called Fully Accessible Route — a framework under which select government bonds have no foreign investment restrictions - was created in 2020. Outflows may continue in the coming months, Standard Chartered Plc said.

The selling comes as the rupee tested a series of record lows against the dollar this month, eroding returns for foreigners. For a euro-based investor, the rupee's total return has been "a whopping negative 10%" this year, while Hungary's forint and the Mexican peso have posted double-digit returns, according to Gama Asset Management SA.

"Foreign investors have been reallocating their emerging-market local bond investments to countries with higher yields and greater potential for currency appreciation," said Rajeev De Mello, global macro portfolio manager at Gama Asset. Including carry, the rupee is the worst-performing major EM currency in 2025, he added.

The outflows are pressuring Indian bonds, which are on track for their biggest monthly decline in four months in December, weighed by heavy debt issuance from states. The selloff has pushed up government borrowing costs even as India faces the harshest US tariffs in Asia. Expectations for deeper interest-rate cuts are also fading after the central bank signaled higher inflation next year.

The rupee, Asia's worst performer this year, weakened past the closely watched 91-per-dollar mark to an all-time low in December before recovering on central bank interventions.

Year-end profit-taking also drove some foreign selling as investors trimmed bond holdings and entered interest-rate derivative trades after a jump in swap rates, said Vikas Jain, head of India fixed income, currencies and commodities trading at Bank of America Corp.

Still, developments next year have the potential to shift momentum back in favor of the Indian securities. Should a long-awaited US trade deal come together, it may revive foreign interest in local bonds, as lower tariffs would ease pressure on the rupee. Analysts at Australia and New Zealand Banking Group see scope for the currency to strengthen as much as 1.5% to 88.5 per dollar if an accord is reached.

The prospect of more global bond-index compilers including the securities next year may spur foreign demand for Indian debt, traders said. "India may also get included in the Bloomberg global index next year, which should help bring in more real-money flows," Jain said. India's index-eligible bonds are already part of JPMorgan Chase & Co.'s widely followed emerging market gauge.