On December 31, 2025, markets traded in a tight range into the year-end, with thin holiday trading keeping moves muted as investors weighed fresh signals from the Federal Reserve against new energy headlines that kept broader uncertainty in focus.
On the diplomatic front, tensions between Russia and Ukraine sharpened after Moscow said Kyiv tried to hit President Vladimir Putin’s residence, a claim Ukraine dismissed, adding pressure to already fragile U.S. efforts to keep peace talks moving and narrowing the room for near-term diplomatic progress.
Furthermore, Europe’s shift away from Moscow became clearer after Russia’s pipeline gas deliveries to Europe fell sharply in 2025 following the shutdown of the Ukraine transit route, leaving TurkStream as the main remaining conduit for those flows.
The European Union has already set out plans to end imports of Russian gas by the close of 2027, keeping geopolitics tied to the region’s energy bill even as the market adjusts, according to Reuters.
Corporate risk in Russia also stayed in focus after the central bank relaxed reserve treatment for some reworked loans, a move that could make it easier for lenders to renegotiate debt loads with large borrowers, such as Russian Railways, as high rates bite and activity cools.
On the economic front, investors studied minutes from the Fed’s December meeting that showed policymakers were split over the decision to cut rates, with several officials describing it as a close call and others leaning toward holding steady as inflation progress remains uneven.
Currency trading reflected that caution: the dollar strengthened after the minutes were released, with the dollar index near 98.25, even though it is still on track for its weakest annual performance in years; meanwhile, sterling held near recent highs at around $1.3468, and the euro was near $1.1769.
In credit and rates, bond investors are looking beyond a strong 2025 and starting to question how much upside remains if the Fed eases more slowly in 2026 and fiscal policy turns more expansionary, a mix that could keep longer-dated yields elevated and make it harder to repeat this year’s gains.
Equities, meanwhile, struggled to find direction, with communication services supported by a lift in Meta after it agreed to buy the AI startup Manus, while weakness in parts of tech and financials kept major indexes from building momentum in the quiet tape.
In commodities and trade, China added another layer to the global supply picture by naming the firms permitted to export tungsten, antimony, and silver in the 2026 and 2027 window, underscoring Beijing’s willingness to manage outbound flows of materials it views as strategically important.
In crypto, digital assets remained sensitive to the same year-end constraints hitting broader markets. With liquidity light, Bitcoin traded near $87,900, Ethereum around $2,970, BNB about $858–$860, and Solana near $124.3, as traders tracked positioning ahead of the new year.
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