Global Markets Rally Cautiously as Oil Rises & Investors Await the Fed

Global markets showed signs of renewed optimism on 4 December 2025, with Asian shares bouncing back and oil ticking up following geopolitical tensions, all while investors eye a likely rate cut by the Federal Reserve (Fed) scheduled next week.

TL;DR

• Global markets rose on 4 December 2025 as oil prices firmed following Ukrainian strikes on Russian energy infrastructure.

• Asian equities rebounded, led by Japan, while precious metals like gold and silver slipped as traders positioned themselves for a possible US Federal Reserve rate cut next week.

Key Market Developments

Oil edges higher as Ukraine strikes Russian infrastructure

Oil prices firmed after reports that Ukrainian forces struck the Druzhba pipeline in Russia’s Tambov region, the fifth such attack, stirring fears of supply disruption amid stalled peace talks.

As a result, Brent crude rose to $62.91 a barrel, and U.S. West Texas Intermediate (WTI) climbed to $59.24.

Despite pipeline operators reporting that flows remain steady, many analysts note the sustained campaign against Russian refining infrastructure has already contributed to a drop of 335,000 barrels per day in refining throughput between September and November, potentially tightening supply if the trend continues. (Source: Reuters)

Precious Metals Retreat as Traders Await Upcoming US Rate Decision

Gold slipped around 0.5% to $4,179.71 per ounce as investors booked profits ahead of the Fed’s meeting next week and looked ahead to fresh data, including US jobless claims and the delayed September Personal Consumption Expenditures (PCE) Index,  the Fed’s preferred inflation gauge.

Silver dropped by 2.1% to $57.22, after recently hitting record highs. The metal’s surge this year, up over 100%,  has been driven by supply tightness, export increases from China, and its inclusion on the US critical minerals list.

Other precious metals also eased: platinum declined 0.9% to $1,640.30, while palladium fell 1.4% to $1,439.91. (Source: Reuters)

Asian Equities Rebound Led by Japan on Strong JGB Demand

In Asia, markets took heart from a strong 30‑year Japanese Government Bond (JGB) auction,  the strongest in over six years,  which helped ease concerns after recent volatility in global fixed income markets.

Japan’s benchmark Nikkei 225 jumped more than 2%, boosted by a near‑12% gain in industrial‑robot maker Fanuc.

Elsewhere in Asia, markets were mixed: technology and consumer names helped lift Hong Kong’s Hang Seng. At the same time, South Korea’s Kospi and Taiwan’s Taiex saw declines amid softness in tech and auto sectors. (Source: APNews)

Growing bets on Fed rate cut bolster optimism in equities and Treasury markets

Investor focus remains squarely on the Fed’s upcoming meeting (9–10 December), with markets pricing in an ~89% chance of a 25 basis‑point cut.

This expectation has helped drive gains in risk assets, including equities and lower‑yielding bonds, as market participants position for an easing cycle.

However, some analysts warn the rally may be overstretched, citing weak economic indicators,  including falling private payrolls and soft consumer data,  which raise questions over whether equities fully reflect underlying fundamentals. (Source: Economic Times)

Additional Context

Markets have spent much of November and early December grappling with a shift from a risk-on environment to a more cautious stance. According to recent analyses, rising global bond yields,  particularly in the US and Japan,  along with unwinding carry‑trade positions, have contributed to a broader re‑evaluation of portfolios as investors favour preservation over aggressive risk‑taking

That said, the backdrop remains constructive: corporate earnings,  especially among tech and AI‑linked firms,  have generally outperformed expectations, helping support equity valuations in recent quarters.

If the Fed delivers a rate cut as widely expected, it could reinforce investor appetite for growth‑oriented assets, while putting pressure on yield‑bearing instruments in developed markets.

Conclusion

Today’s session saw cautious optimism gradually permeate global markets. Oil prices rose on renewed concerns about supply disruptions following strikes on Russian infrastructure, while equities in Asia, led by Japan, rallied on strong demand for bond auctions. Meanwhile, gold and silver retreated as investors booked profits and positioned for the upcoming Fed decision. With markets largely pricing in a December rate cut, all eyes remain on key U.S. economic data and how the central bank moves will shape asset flows in the coming days.

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