US Capital Market Newsletter – 4Q25

US markets in 4Q25 adopted a more cautious tone as momentum moderated and policy expectations stabilized. Equity performance became increasingly selective, with Non-US markets outperforming on broader sector exposure and currency support, while US returns relied on stock leadership rather than broad earnings strength. Fixed income conditions remained stable, with yields largely range-bound and credit markets showing limited stress. Growth remained resilient but showed early signs of moderation, reflected in softer labour market dynamics and slower hiring momentum. Inflation eased only gradually but stayed above the Fed’s target, reinforcing expectations of a prolonged policy pause and a growing focus on liquidity management tools.