- This article is a roundup of global stock markets ahead of Wednesday's Fed decision by 1800 GMT. Global stock markets are clearly cautious.
Ahead of the Fed rate decision on Wednesday, December 10, 2025, global stock markets remain cautious. This meeting is the last for the year and will also provide an insight into the Fed’s plan for its 2026 rate decisions. Fed Funds futures have priced in a 25 bps rate cut.
Asia
Asian markets have started the week lower. Hong Kong’s Hang Seng has shed 2.52% as of writing, while the Nikkei 225 index lost 0.2% after revised data revealed a sharper-than-expected slowdown in Japan’s economy.
Asian stocks were mixed with a general softer bias on Tuesday. The regional gauge dropped 0.28% due to investor caution ahead of the Fed decision. On Wednesday, the Nikkei, ASX 200 and Kospi all closed lower. The same fate hit the Hang Seng (-0.3%) and the Shanghai Composite index (-0.5%), as the Fed decision looms.
Asian investors are in a Fed wait-and-see mode, and are clearly not risk-on at the moment.
Europe
European equities also started the week in cautious mode. Within European indices, consumer staples were the main losers on Monday, led by Unilever and L’Oréal. Unilever is traded lower after the merger with Magnum. Defense stocks limited the damage after showing resilience.
On Tuesday Dec 9, 2025, European stocks had a mixed day as traders became cautious ahead of the Fed decision. Germany’s DAX rose 0.5%, the CAC40 shed 0.7% while the FTSE 100 and Stoxx 600 were flat, as financials and defense stocks helped to limit losses.
Early trade this Wednesday reveals that Europe is edging lower. The Stoxx 600 is down 0.1%, as markets continue to remain cautious ahead of today’s Fed decision.
United States
On Monday, the Dow, S&P 500, and Nasdaq were up slightly as the 25 bps expectation filtered through. Lower rates reduce bond yields, driving flows from the bond markets to equities. No surprise here.
However, Tuesday brought a mixed picture as investors went into a mode of caution. The S&P 500 was down 0.1%, The Dow shed 0.4% to close at 47,560.59, while the Nasdaq and Russell 2000 rose by 0.1% and 0.2%, respectively. The Dow was weighed down by JP Morgan, which flagged higher expense expectations for 2026.
The dominant driver: the Fed
The market has heavily priced in a 25 bp cut for the Dec 10 Fed decision. The question is: will the rate be cut dovishly (a signal for further easing in 2026) or hawkishly (one cut, the rest to be data-dependent)?
If the Fed provides dovish guidance for 2026, expect the global stock markets to go back into risk-on mode. However, traders must be wary of volatility in the immediate aftermath of the Fed decision.
Cross-assets Picture
As expected, gold has inched higher on a softer dollar amid easing expectations. Bitcoin is also leading the charge in cryptocurrencies, gaining 2.3%. Ethereum is also up by 6.44%, as risky assets get a lift from the bearish sentiment around the US Dollar. A coverage of Ethereum’s potential response to the Fed decision has been published earlier.
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