Analysis: Global Stock Markets Mostly Rise Ahead of U.S. PCE Inflation Data Release

This analysis is based on the December 5, 2025, Wall Street Journal (WSJ) report [1] covering December 4 market movements, combined with market data from the Ginlix Analytical Database [0]. On December 4, European markets exhibited cautious optimism, with the FTSE 100 (UK) and DAX (Germany) both closing 0.19% higher, reflecting anticipation of the U.S. PCE inflation data release [0]. In contrast, U.S. indices (S&P 500: -0.14%, NASDAQ Composite: -0.09%, Dow Jones Industrial Average: -0.08%) pulled back slightly after earlier gains, likely driven by profit-taking ahead of the key inflation indicator [0]. Notably, Japan’s Nikkei 225 closed 2.17% higher, contradicting the WSJ report’s initial claim that Japan was an exception to the positive trend—this discrepancy is likely due to the article being written before the Nikkei’s trading session concluded [0]. Market expectations from the December 3, 2025, Manila Times report [2] project PCE inflation to remain above the Fed’s 2% target (headline ~2.8%, core ~2.9%), making the data critical for the central bank’s upcoming December rate decision.

• Intraday vs. Close Data Discrepancy
  : The discrepancy between the WSJ’s initial note on Japan’s market and the Nikkei’s final close highlights the potential for incomplete intraday reporting to create temporary narrative gaps, emphasizing the importance of verifying final trading data.
• Regional Sentiment Differences
  : European markets showed greater optimism than U.S. markets, possibly reflecting their varying exposure to U.S. inflation dynamics and Fed policy decisions.
• Cautious Market Sentiment
  : The modest price movements across major indices indicate investors are adopting a wait-and-see approach ahead of the PCE data, as the outcome could significantly shift expectations for Fed rate cuts in December.

• Inflation Surprise Risk
  : If the PCE data shows higher-than-expected inflation, markets could reverse recent gains as hopes for a December Fed rate cut fade [2].
• Fed Policy Uncertainty
  : Divisions among Fed officials on further rate easing in 2025 create volatility risks, as the PCE data may intensify policy debates [2].
• Geopolitical & Fiscal Risks
  : Ongoing geopolitical tensions and U.S. deficit concerns remain potential tail risks that could add downside pressure to global markets [2].
• Opportunity Window
  : A lower-than-expected PCE inflation reading could boost rate-cut expectations, potentially leading to a market rally [2].

Global stock markets displayed mixed but mostly positive trends on December 4, 2025, ahead of the U.S. PCE inflation data release. European markets closed higher, U.S. indices pulled back slightly, and Japan’s Nikkei 225 closed with significant gains despite initial reports. The PCE data, as the Fed’s preferred inflation measure, is a critical driver for the central bank’s December rate decision, with current market expectations projecting inflation above the 2% target. Decision-makers should monitor the PCE data release, the Fed’s immediate reaction, and broader geopolitical and fiscal factors to assess future market trends.