Market update: 23 December 2025
The Australian share market, specifically the ASX 200, fell 0.9% this week as talk of more RBA rate hikes weighed on investor sentiment. Energy, healthcare and utilities were the biggest drags on the ASX 200, while industrials and financials posted small gains. With inflation still sitting above the RBA’s target range, markets are adjusting expectations and taking a more cautious view heading into the new year.
In the US, markets ended mixed but broadly held their ground. The Nasdaq rose 0.5% and the S&P 500 edged up 0.1%, helped by softer inflation and improving labour data. November’s core inflation came in lower than expected at 2.6%, reinforcing hopes that interest rate cuts may be on the horizon in 2026. While nonfarm payrolls grew by 64,000, the unemployment rate rose slightly as more people returned to the workforce. Despite some uncertainty around big tech and AI-related spending, the S&P 500 is up 16% this year, marking its third straight year of double-digit gains.
European markets finished higher, with gains across the FTSE, Euro Stoxx 600 and Euro Stoxx 50. The European Central Bank held interest rates steady, saying policy is “in a good place” while keeping decisions data-dependent. In the UK, the Bank of England made a small rate cut to 3.75% as inflation cooled and unemployment rose. The tone across Europe suggests a cautious but stabilising outlook.
In Greater China, markets slipped again. The Hang Seng fell 1.1% while the Shanghai Composite was flat, as retail sales, investment and industrial output all came in softer than expected. Signs of weak domestic demand remain, with only limited stimulus efforts from Beijing so far. In Japan, the Nikkei dropped 2.6% after the Bank of Japan raised interest rates to 0.75%, its first move in years. While the hike was widely expected, investors were hoping for clearer guidance on what might come next.
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This information has been issued by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) as Responsible Entity of the Raiz Invest Australia Fund (ARSN 607 533 022) and has been prepared without taking into account your objectives, financial situation or needs. Before acting on such information, you should conduct your own review or consult a financial advisor before making a decision to invest. Please read the relevant Product Disclosure Statement and any associated reference documents before making an investment decision. In accordance with the Design and Distribution Obligations, we maintain TMDs for our Funds. All documents can be found on the Raiz website www.raizinvest.com.au, or calling the Customer Support team on 1300 754 748.
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