Three Counterintuitive Market Signals to Watch as 2025 Winds Down

With investors entering the final stretch of the year, attention is turning to three surprising trends that could shape market performance into 2026.

First, global equities are showing far broader strength than many assume. While U.S. mega-cap technology companies have dominated headlines, stock markets across developed and emerging economies are also climbing. Indexes such as ACWI and EAFA have hit new highs, and technical indicators show that most S&P 500 stocks are trading above long-term averages. In Europe, earnings expectations for 2026 are improving, with Germany projected to deliver double-digit growth comparable to U.S. forecasts.

Second, the so-called “Magnificent Seven” technology giants may be losing their edge. Heavy spending on artificial intelligence infrastructure is eroding the capital-light business model that long fueled their rapid growth. Investment as a share of cash flow has surged, squeezing margins and slowing expected profit expansion. By contrast, earnings growth for the rest of the S&P 500 is set to remain steady in the mid-teens, potentially shifting leadership away from big tech.

Finally, China’s 10-year government bond yield has emerged as one of the most important global indicators. Currently near 1.8%, it reflects Beijing’s effort to manage deflation by limiting supply and boosting demand. If these measures succeed, Chinese equities could extend their recent rally and take on a bigger role in driving global market momentum.

Together, these developments highlight how leadership in financial markets is evolving. The late-2025 picture is not only about U.S. tech dominance but also about broader global participation and key macro signals from China.