On November 25, 2025, global stock markets continued their upward trajectory, supported by expectations that the U.S. Federal Reserve will cut interest rates in December. This helped ease concerns over inflated valuations in the artificial intelligence (AI) sector and led to a decline in the yields on long-term U.S. Treasury bonds.
Just a week ago, the stock markets experienced a sharp drop, marking the largest decline since early August. The reasons for this drop included growing pessimism regarding the prospects of further rate hikes and uncertainty caused by the partial shutdown of the U.S. government. However, toward the end of the week, comments from Federal Reserve officials, such as those from John Williams, about the possibility of rate cuts stirred optimism in the market and helped restore positive sentiment.
Freddy Miller, senior analyst at NEWSCENTRAL, notes: “Expectations of a rate cut in December have become a strong factor driving positive sentiment in the markets. At NEWSCENTRAL, we see that labor market weakness and other economic factors suggest the need for a more accommodative monetary policy.” These statements, along with support from other Fed officials such as Christopher Waller, have significantly increased the likelihood that the Fed will reduce rates by 25 basis points at its December meeting. Currently, the chances of such a move stand at 85.1%, according to the CME FedWatch tool, a significant increase from the 42.4% probability recorded just a week ago.
These expectations have led to a rise in investor confidence. U.S. stock indices – Dow Jones, S&P 500, and Nasdaq – showed positive performance, particularly driven by gains in companies in the communications sector, such as Alphabet (Google), which saw a 6% increase. At NEWSCENTRAL, we emphasize that this is also linked to positive expectations for artificial intelligence and the anticipated easing of rates.
“Markets continue to show positive sentiment in anticipation of rate cuts, which will likely support the growth of risk assets. However, at NEWSCENTRAL, we forecast that short-term volatility will likely persist as the market adapts to changes in monetary policy,” added Freddy Miller, senior analyst at NEWSCENTRAL.
Simultaneously, the decline in U.S. Treasury yields – particularly the 10-year bonds – confirms expectations of a softer monetary policy. The yield on these bonds fell to 4.036%, reflecting reduced expectations for future rate hikes. Strong demand for two-year bonds, as seen in a recent auction, also signals a recovery of confidence in government securities.
Currency markets also reacted to changes in monetary policy. The U.S. dollar index continued to fall, leading to the strengthening of the euro and the British pound. Meanwhile, the weakening of the yen drew attention to potential measures by the Bank of Japan to intervene and stabilize its currency.
In the coming weeks, the market will focus on key macroeconomic data, such as retail sales reports and U.S. producer prices. At NEWSCENTRAL, we predict that these indicators could influence the Fed’s monetary policy outlook, which in turn will have a significant impact on financial markets.
We at NEWSCENTRAL forecast that further rate cuts will contribute to the growth of stock markets in 2026, though it is important to understand that short-term adjustments remain likely.
In conclusion, the current dynamics of the stock markets remain positive, supported by expectations of a Fed rate cut in the coming months. At the same time, despite the anticipated growth, investors should be mindful of potential short-term volatility and closely monitor economic data that could affect market sentiment. We at NEWS CENTRAL recommend maintaining a balanced approach, considering both risks and opportunities in the near term.