Global markets moved into a more optimistic gear as equities and commodities advanced together, reinforcing expectations of a strong finish to 2025. The synchronized rally reflects a shift in investor psychology after weeks of hesitation driven by valuation concerns, central bank uncertainty, and doubts around the durability of the artificial intelligence trade. With US equities recovering sharply late last week, global investors are once again leaning into risk, though with a more selective and tactical mindset.

Equities Regain Momentum Across Regions

Global stock benchmarks climbed to their highest levels in more than a week, extending a recovery that began in US markets on Friday. A broad gauge of world equities is now up roughly 20% for the year, underscoring the resilience of risk assets despite repeated macro headwinds. Asian markets led early gains, driven by technology stocks, while US equity futures pointed modestly higher as investors positioned for a constructive close to the year.

The rebound follows a period of volatility sparked by concerns over AI-related capital spending and uncertainty about the pace of future Federal Reserve rate cuts. Dip buyers stepped in aggressively during last week’s pullback, particularly during a heavy options and futures expiry, signaling confidence that downside risks are increasingly priced in. Strategically, this behavior suggests investors remain committed to the broader equity narrative, even as valuations demand greater scrutiny heading into 2026.

Commodities Take Center Stage as Gold Breaks Records

Commodity markets emerged as a central theme of the session, with precious metals leading gains. Gold surged to a fresh all-time high above $4,400 an ounce, while silver and copper also reached record levels. The rally reflects a potent mix of geopolitical risk, tight supply conditions, and expectations that global monetary policy will remain accommodative over the medium term.

For gold and silver, the appeal is twofold. Heightened geopolitical tensions, particularly surrounding US actions in Venezuela, have reinforced their safe-haven status. At the same time, the prospect of lower interest rates enhances the attractiveness of non-yielding assets. Copper’s surge, meanwhile, speaks to longer-term optimism around electrification, infrastructure investment, and constrained supply, marking one of its strongest annual performances in over a decade.

Oil prices also advanced as geopolitical developments raised concerns about supply disruptions. While energy markets remain volatile, the price action underscores how geopolitical risk premiums are quietly rebuilding across commodities.

Japan’s Rate Hike Ripples Through Bond and Currency Markets

Japan remained a focal point after its central bank lifted interest rates to the highest level in three decades. Government bond yields climbed to levels last seen in the late 1990s, reflecting shifting expectations around future tightening and fiscal sustainability. The yen, which had weakened sharply following the policy decision, stabilized as officials signaled readiness to respond to excessive currency moves.

Rising Japanese yields add a global dimension to bond market pressures, particularly as US and European yields also edged higher. For investors, this introduces a more complex cross-asset landscape, where equity optimism must be balanced against tighter financial conditions and currency volatility.

Looking Ahead

As the final trading days of the year approach, markets appear supported by improving sentiment, robust commodity trends, and fading fears of an abrupt policy shock. However, risks remain. Elevated valuations in parts of the equity market, geopolitical uncertainty, and the evolving stance of central banks could quickly test confidence.

Still, the simultaneous strength in equities and commodities suggests investors are positioning for a world where growth holds up and inflation risks remain manageable. Monitoring bond yields, currency responses, and commodity momentum will be critical in assessing whether this late-year rally can extend into early 2026.