Global Markets Mixed: FTSE Rises on UK Inflation & Tech Stocks Weigh on US Equities

Global stock markets were mixed on 17-18 December 2025, with London's FTSE 100 outperforming due to easing UK inflation, while US and Asian equities fell amid weakness in the technology sector. Policy developments in China, the UK, and the EU also shaped broader investor sentiment ahead of year-end.

Let’s take a look at what’s shaping the markets recently: 

TL;DR

• FTSE 100 gained as UK inflation dropped to 3.9%, raising hopes of rate cuts.

• US tech stocks fell after Oracle faced financing issues on a major AI project.

• Asian markets slid, led by Japan’s Nikkei falling over 400 points on tech concerns.

• China launched a US$113 bn free-trade zone in Hainan to boost foreign investment.

• UK plans to cut benchmark regulation by 90%, easing financial compliance.

• EU budget talks signal long-term policy shifts across the bloc.

• Fed liquidity support stabilised US bond markets despite equity volatility.

• Global trade volumes remain on track to exceed US$35 trillion in 2025.

Key developments

FTSE 100 climbs as UK inflation drops

On Wednesday, 17 December, the FTSE 100 rose as UK inflation slowed sharply in November, with the annual CPI falling to 3.9%, down from 4.6% the previous month. This marked the lowest level in over two years, bolstering expectations that the Bank of England (BOE) may begin cutting interest rates. Banking and consumer stocks rallied on the news, helping lift the index to a near one-month high. (Source: Yahoo Finance)

US tech stocks retreat amid AI financing concerns

US markets fell yesterday, led by declines in tech and AI stocks after Oracle faced financing issues on a large AI data-centre project. The Nasdaq and S&P 500 both closed lower, with investor confidence in high-growth AI investments taking a hit.

Asian equities drop on global sentiment

Today, Thursday, 18 December, Asian indices followed Wall Street lower. Japan’s Nikkei dropped more than 400 points as tech weakness spread, and traders reacted to year-end volatility.

China unveils $113bn free-trade zone

China announced a massive US$113 billion free-trade initiative on Hainan Island, promoting foreign investment and tariff-free trade flows as part of its broader economic opening strategy. 

UK proposes benchmark regulation overhaul

The UK government plans to significantly reduce oversight on financial benchmarks, cutting the number of regulated indices by as much as 90% to ease burdens on the financial sector.

EU faces internal debate over budget plans

The European Union is preparing a €2 trillion budget framework for 2028-34, but faces internal divisions on spending priorities and potential new EU taxes. These talks will influence long-term fiscal policy across the region. 

Additional context

Fed liquidity support stabilises bond markets

The Federal Reserve’s recent liquidity injections have helped stabilise short-term funding markets, easing year-end pressure in the bond market despite volatility in equities.

Global trade remains strong

Despite geopolitical tensions, global trade flows are on track for a record-breaking year, exceeding US$35 trillion in 2025. This reflects ongoing resilience in global commerce.

Conclusion

Global markets closed with diverging performances, as UK equities rose on cooling inflation and interest rate optimism, while tech-driven losses weighed on US and Asian benchmarks. Meanwhile, trade and regulatory shifts in China, the UK and the EU continue to inform investor outlooks heading into 2026.

*Past performance does not reflect future results. The above are only projections and should not be taken as investment advice.