Global Market Performance in 2025 (as of December 31, 2025)

The global market performed steadily overall in 2025, achieving synchronized growth in stocks, bonds, and gold assets. Major global stock markets generally trended higher, with U.S. tech stocks and Asian markets rising between 10% and 30%. This round of gains primarily benefited from the continued market momentum driven by artificial intelligence technology, with related companies maintaining strong growth trends in profitability and capital expenditures. At the same time, global monetary policy shifted toward an easing cycle, particularly with the Federal Reserve implementing three rate cuts in the second half of the year, significantly boosting the performance of risk assets and effectively countering market volatility triggered in the first half by the Trump administration's renewed tariff policies. The declining interest rate environment also strongly supported the positive trend in the bond market. Additionally, the weakening U.S. dollar exchange rate further enhanced the relative attractiveness and investment returns of non-U.S. currency assets and gold. In contrast, traditional commodities like crude oil and cryptocurrencies performed relatively sluggishly, failing to achieve significant premiums. Hedge funds and private credit strategies continued to exhibit stable return characteristics, demonstrating relatively strong anti-volatility capabilities.

 

Global Macroeconomic Outlook for 2026

The market generally expects global economic growth in 2026 to remain within a stable range of 2%-3%, presenting a pattern of "resilient growth."

 

Growth Paths of Major Economies

United States: The economy is expected to achieve a soft landing, with 2025 GDP growth between 1% and 2%. The core drivers lie in the sustained resilience of consumer demand and the steady recovery of corporate profits (S&P 500 earnings per share are projected to grow approximately 14% year-on-year). Although fiscal deficit pressures persist, Sino-U.S. trade relations may see a phase of easing: if bilateral agreements materialize, actual tariff levels could be lower than current market expectations, potentially boosting global trade confidence and investment sentiment.

China: Economic growth in 2025 is projected to be around 5%. Policy focus in 2026 will shift toward stimulating domestic demand, supported by proactive fiscal policies and appropriately accommodative monetary policies.

 

Global Monetary Policy Outlook

Federal Reserve: Expected to continue a moderate rate-cutting cycle, with full-year rate cuts ranging between 25 and 50 basis points, targeting an interest rate range of 3.0%-3.25%.

European Central Bank: Policy rates are expected to remain stable around 2%, but there is a possibility of a slight rate hike by the end of 2026 to address inflationary pressures.

Bank of Japan: The overall policy tone for the year leans toward "pause and observe," with limited room for further rate hikes—only a potential modest increase of 25 basis points.

 

Excerpts from Institutional Views

Morgan Stanley: Global growth remains resilient, with 2026 global GDP growth projected at 2.5% (slightly below 2025's 2.7%). U.S. growth is forecast at 2.0%. U.S. inflation persistence remains, but the impact of Trump's tariffs may be partially offset by productivity gains from AI and declining energy prices.

HSBC: Maintains an overall optimistic outlook, believing the U.S. economy will stay on its potential growth track, while the Eurozone is expected to benefit from fiscal stimulus measures and achieve recovery.

 

 

 

 

Three Core Growth Drivers for 2026

Energy Bottlenecks and Profit Realization in the AI Frenzy

With surging electricity demand from AI data centers (projected to account for about 8% of total U.S. electricity consumption in 2026), the world faces an unprecedented "power gap." Reliable electricity supply has become a key prerequisite for the sustainability of AI capital expenditures. This trend creates strong long-term demand for grid modernization, nuclear power, gas peaker plants, and energy transition metals like copper. Additionally, market focus is shifting from AI chip manufacturers like NVIDIA to those who can truly translate AI into commercial value. The financial industry leverages AI to optimize risk control and automate trading; the medical field accelerates new drug R&D; industrial software enhances supply chain efficiency. Companies in these areas are using AI to effectively reduce costs or create new revenue streams, rather than merely investing huge capital expenditures, thus possessing more sustainable profitability and valuation appeal.

The Long-Term Bull Market in Gold Driven by De-Dollarization

Central banks worldwide (especially in emerging markets) continue to significantly increase gold holdings to hedge against U.S. dollar hegemony risks, fiscal deficit inflation, and geopolitical uncertainties. Global central bank gold purchases hit a new historical high in 2025, and this trend is expected to accelerate further in 2026. DBS and LGT set a year-end 2026 gold target price of $5,100 per ounce, citing reasons including: U.S. national debt reaching new highs, the Fed's rate cuts suppressing real interest rates in a non-recessionary environment, and the accelerated formation of a global "multipolar currency system." Gold has evolved from a traditional safe-haven asset into a core tool for global asset-liability rebalancing, possessing long-term allocation value.

It is worth noting that in this macro wave centered on "de-dollarization" and "real asset reallocation," Bitcoin is gradually being viewed by some investors as a complementary or alternative digital reserve asset to gold. Despite its volatility being significantly higher than gold's, the continuous inflow of institutional funds through compliant channels like spot Bitcoin ETFs reflects rising market demand for "non-sovereign, censorship-resistant, fixed-supply" assets. Morgan Stanley, Goldman Sachs, and others point out that the correlation between Bitcoin and gold increased noticeably in 2025, particularly when both strengthened synchronously during periods of rising Fed easing expectations. However, gold still holds irreplaceable advantages such as central bank backing, deep liquidity, and no counterparty risk, making it the preferred safe-haven tool during systemic risk escalations, while Bitcoin plays more of a role as a tail hedge in high-risk preference scenarios or a tool for opportunistic diversification.

Government Fiscal Policies and National Security Expenditures Become New Growth Engines

Against the backdrop of diminishing effectiveness of global monetary policy, major economies like the U.S., Germany, Japan, and India are shifting toward a fiscal policy-led growth model, stimulating their economies through large-scale defense, infrastructure, and industrial subsidy expenditures. This fiscal-led approach not only supports cyclical sectors like defense, industrials, and construction materials but also creates opportunities for alternative assets like prioritized private credit, as government spending crowds out traditional bank lending, making room for private capital.

Furthermore, the tense global geopolitical landscape (Ukraine, Taiwan Strait, Middle East) is driving major economies to significantly increase defense budgets, forming a structural spending wave lasting several years. NATO has raised its defense spending target from 2% to 5% of GDP; Germany, Japan, India, and others have announced modernization plans worth hundreds of billions of dollars. This trend benefits not only traditional defense contractors (e.g., Lockheed Martin, Raytheon) but also drives high-end materials, cybersecurity, satellite communications, unmanned systems, and other niche sectors. Morgan Stanley, Goldman Sachs, and LGT all list "defense" as a high-confidence overweight sector for European and Japanese stock markets in 2026.

 

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