Corcept Therapeutics (NASDAQ: CORT) crashed about 50% on Dec. 31 after the FDA requested additional data to support the efficacy of relacorilant, its candidate treatment for Cushing’s syndrome.

The setback cast doubt on CORT’s pipeline strength and triggered a sharp re-evaluation by analysts. It underscores the market’s sensitivity to regulatory developments in small-cap drug makers.

Following today’s plunge, Corcept stock is down 70% versus its year-to-date high in late March.

What FDA setback means for Corcept stock

FDA’s request for more evidence on relacorilant’s effectiveness has materially weakened investor confidence in Corcept’s near-term growth.

The drug was expected to be a key revenue driver in the Cushing’s syndrome market, where CORT already sells Korlym.

With relacorilant now facing delays or potential rejection, analysts have removed it from their financial models for this indication.

Korlym itself is under pressure from generic competition, particularly from Teva Pharmaceuticals. This leaves CORT stock with limited upside in its core therapeutic area.

The regulatory hurdle not only impacts future sales but also raises questions about the robustness of Corcept Therapeutics’ clinical data and trial strategy.

CORT shares’ price action may still be overdone

Despite the major FDA setback, some analysts believe the market reaction may have overshot the fundamentals.

Truist Securities, for example, slashed its price objective on Corcept shares to $50, acknowledging the recent news is significantly bearish for the biotech firm.

However, the investment firm maintained a “buy” rating, with the downwardly revised price target still indicating potential upside of more than 40% from here.

“We see value in Korlym in Cushing’s with upside from relacorilant in PROC,” its analysts noted, referring to platinum-resistant ovarian cancer.

After today’s crash, Corcept Therapeutics is going for a price-to-sales (P/S) ratio of about 10 only, which isn’t particularly expensive for a fast-growing biotech company.

In short, while the FDA news is undeniably negative, the removal of relacorilant for Cushing’s  altogether from valuation models may be premature, especially if the management can address the agency’s concerns.

Should you buy Corcept on the pullback?

CORT shares may be worth owning heading into 2026, as it isn’t one of those unprofitable biotech names.

In the latest reported quarter, the company had nearly $20 million in net income and $208 million in revenue – up some 14% on a year-over-year basis.

Moreover, Corcept’s balance sheet remains strong, and its ongoing research in ovarian cancer could unlock new revenue streams.

Korlym, despite generic headwinds, continues to generate cash flow, and relacorilant’s potential in oncology remains intact.

For long-term investors, the current valuation may offer an attractive entry point, especially if management can navigate regulatory challenges and diversify its pipeline.

The selloff has reset expectations, but the fundamentals suggest Corcept is far from broken. With execution and clarity, the stock could rebound meaningfully in the months ahead.

The post Why Corcept Therapeutics stock crashed today and what comes next? appeared first on Invezz

Logan Mohtashami, a senior HousingWire analyst, believes mortgage rate stability – not rate cuts – will be the key driver for the US housing market in 2026.

While many focus on the Fed policy, Mohtashami told CNBC today that the real story actually lies in whether mortgage rates can hold steady near 6% next year.

In fact, “it’s very hard for mortgage rates to go below 5.75% with monetary policy where it’s at,” he argued, noting consistency in rates is more important than chasing a dramatic decline.

According to him, mortgage rate stability could mean a modest but meaningful increase in home sales in the coming year.

Why mortgage rate stability tends to drive the US housing market

Historically, the US housing market responds best when mortgage rates avoid sharp swings.

“As long as mortgage rates stay near 6% and not shoot up again as they have in past years – we could get a little bit of sales growth in 2026,” Mohtashami said in a CNBC interview on Dec. 31.

In recent years, rate volatility has been a major challenge for the housing market, with sudden 1% moves disrupting affordability and buyer confidence.

By contrast, steady rates create a more predictable environment not just for the households, but for lenders alike.

All in all, mortgage rate stability offers a workable environment for buyers and sellers, preventing the kind of freeze seen when rates spiked above 7% in 2023.

Also Read: What to expect from the US commercial real estate market in 2026

What else signals housing market activity will improve in 2026

Mohtashami believes housing sales will grow “modestly” next year, also because mortgage spreads have improved.

In 2023, that metric stood at 3% versus about 2% only at the time of writing – a narrowing that’s helped mortgage rates remain near 6% even as amid a restrictive Fed policy, he noted.  

According to the HousingWire analyst, inventory growth may help ease pressure on buyers, while incremental wage growth outpacing home prices has improved affordability slightly as well.  

Taken together, these factors suggest that the market may not boom, but it will sustain modest sales growth next year – continuing the trend seen in 2025.

Labour market and policy risks remain

On the flip side, risks remain – Mohtashami agreed – adding the outlook could change if the labour market shifts the balance.

“Only reason mortgage rates are even here is that the unemployment rate has risen,” he noted.

If job growth accelerates, unemployment falls, and wage growth picks up, the Fed may adopt a more hawkish stance, pushing rates higher, especially since inflation remains about 1% above target – leaving little room for complacency.

In short, a stronger labour market would hurt affordability and stall sales growth. Conversely, if softness persists, rates may hold steady, supporting incremental demand for the US housing market in 2026.

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On December 1^st, famed investor Jim Cramer looked into the camera on CNBC’s Mad Money and made a provocative statement – “maybe the stretched consumer is a false narrative.”

At first glance, the statement seemed to fly in the face of conventional wisdom.

For months, headlines have been dominated by “vibe-cession” talks, the impact of the 2025 tariffs, and a record-long government shutdown that paralysed federal data for weeks.

Yet, as the final data points of the year trickle in, Cramer’s contrarian take looks less like hyperbole and more like a roadmap for the 2026 market.

What’s the stretched consumer narrative

The stretched consumer thesis — the idea that Americans have finally hit a wall of exhaustion under the weight of high interest rates and depleted pandemic savings — has been the safest bet on Wall Street all year.

But heading into 2026, hard numbers suggest the American consumer isn’t just surviving, they are powering a “no-landing” economic scenario that few saw coming.

The GDP surprise — a 4.3% reality check

The most jarring piece of evidence arrived on December 23, 2025, when the Bureau of Economic Analysis (BEA) finally released its delayed third-quarter GDP figures.

According to its latest data, the US economy grew at an annualised rate of 4.3% in Q3 – notably more than 3.2% that experts had forecast.

This wasn’t a fluke driven by government spending alone. Personal consumption, the heart of the US economy, was the primary engine.

Real consumer spending rose by 3.5% in the third quarter, fuelled by a labour market that, while cooling, has maintained real wage growth.

As James Knightley, chief international economist at ING, noted following the release: “The US economy is doing remarkably well for those in the middle and higher-income brackets, who are using their housing wealth and investment gains to keep the engines humming.”

While the “stretched” narrative focuses on the 100-month car loan and rising credit card balances, it ignores the massive wealth effect from an S&P 500 that sits near all-time highs, up roughly 19% for the year.

The consumer isn’t broke; they are bifurcated.

Corporate resilience: beyond the ‘Trade War’ noise

Corporate America’s latest earnings reports provide “boots on the ground” evidence that Cramer’s thesis holds water.

Throughout December, we’ve seen a recurring theme: discretionary spending is only shifting – not disappearing.

• Beauty as a Bulwark: Retailers, including Ulta Beauty and Macy’s (via its Bluemercury and Bloomingdale’s wings), posted record-breaking holiday quarters. Consumers are opting for “attainable luxuries” even as they cut back on big-ticket home renovations.
• The Travel Boom: Despite “sticky” inflation at 2.8% (Core PCE), international travel and healthcare services saw a significant uptick in December. This is indicative of a consumer who prioritises experiences and essential services over the accumulation of more “stuff”.
• Retail Divergence: While Walmart reported a rare profit miss due to shifting margins, the underlying volume remains robust. Consumers are “trading down” to value – but they are still buying.

As Jim Cramer said, “consumer comeback has ignited anything related to discretionary spending.”

Sentiment vs spending: the great decoupling

The strongest argument for the “stretched” narrative has always been consumer sentiment.

The University of Michigan and Conference Board surveys for December 2025 showed confidence hitting yearly lows, driven by fears of the “Liberation Day” tariffs and job security concerns among Gen Z.

However, this year has proven that what consumers say to pollsters — and what they do with their iPhones are two different things.

This “Great Decoupling” is the cornerstone of why the narrative is false.

Despite some signs of improvement to close out the year, sentiment remains low since pocketbook issues dominate views,” says Joanne Hsu, director of the Survey of Consumers.

Yet the same report shows expectations for personal finances are actually rising.

People are worried about the economy, but they’re increasingly confident in their own bank accounts.

Conclusion: the “no-landing” 2026

Jim Cramer’s observation was a warning to those betting against the American shopper.

If the consumer was truly “stretched” to the breaking point, a 4.3% GDP print should have been mathematically impossible.

Instead, we are entering 2026 in a “no-landing” environment where growth remains high, interest rates stay restrictive, and the consumer remains the ultimate firewall against recession.

The narrative isn’t that everyone is wealthy – it’s that the American consumer is more durable than the bears give them credit for.

Betting against that durability has been a losing trade for a century – and the recent economic data proves it still is.

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Analysts increasingly believe Microsoft could reach a $5 trillion market valuation in early 2026.

The analysis is driven by accelerating artificial intelligence monetisation, dominance in enterprise cloud infrastructure, and expanding operating margins that are reshaping the company’s earnings trajectory.

Currently valued at approximately $3.59 trillion as of late December 2025, Microsoft would need a 41% appreciation to hit the $5 trillion milestone.

The company’s unique positioning at the intersection of AI infrastructure, enterprise adoption, and recurring subscription revenue creates a structural advantage over peers.

Azure’s explosive growth and AI integration drive Microsoft’s acceleration

Microsoft’s path to $5 trillion hinges on Azure cloud’s continued momentum and successful monetization of artificial intelligence across its product portfolio.

In the fiscal first quarter of 2026, Azure and cloud services revenue surged 40% year-over-year.

This growth outpaces Microsoft’s legacy business segments, including Windows and Office, signaling a fundamental shift in where the company generates its highest-margin revenue.

Management specifically highlighted that demand for Azure infrastructure is exceeding supply, prompting the company to roughly double its data center capacity.​

The scale of committed customer spending underscores the depth of demand.

Microsoft’s commercial remaining performance obligations climbed 51% year-over-year to $392 billion, significantly exceeding the $294 billion in trailing twelve-month revenue.

This ratio implies that Microsoft is booking future business faster than it can recognise revenue, a powerful signal of durable demand visibility.

The company reported that commercial bookings nearly doubled, driven by Azure commitments extending its partnership with OpenAI through 2030 and including an additional $250 billion in committed Azure spend from OpenAI specifically.​

Risks that could derail the move in 2026

To reach $5 trillion, Microsoft would need to grow revenue to approximately $392 billion by 2026 while trading at 13 times sales.

If the company achieves 20% revenue growth (above consensus estimates of 15-16%), combined with modest margin expansion from AI-driven productivity gains, analysts say the $5 trillion target becomes realistic.

Wedbush’s Dan Ives explicitly projects a $5 trillion valuation by 2026, citing AI infrastructure expansion and expected acceleration in Azure deployment.

Wells Fargo analyst Michael Turrin’s $700 per share price target implies a $5.1 trillion valuation.​

Wall Street’s consensus reinforces optimism: 98% of 34 surveyed analysts rate Microsoft a Strong Buy, with average price targets clustered between $600 and $650, implying 23% to 33% appreciation from current levels. ​

However, risks exist. Microsoft faces elevated capital expenditure obligations, $34.9 billion in capex as of Q1 2026, which could pressure free cash flow if revenue growth disappoints.

Competitive pressure from Amazon Web Services and Google Cloud Platform remains real.

Additionally, if enterprise customers prove cautious about AI spending in a recessionary environment or if regulatory scrutiny on AI intensifies, Microsoft’s growth could decelerate sharply.

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The Federal Reserve cut rates by a quarter percentage point on December 10, but beneath the surface, the official meeting minutes reveal a sharply divided committee.

The FOMC is wrestling with a troubling concern: inflation could become permanently stuck above the Fed’s 2% target.

The 9-to-3 dissent vote exposes the real source of tension within the central bank, not jobs or growth, but the stubborn refusal of prices to fall.

Three officials voted against the rate cut, with two wanting to hold rates steady entirely.

Their message was blunt: cutting rates now, while inflation remains elevated, could dangerously signal the Fed is softening its commitment to controlling prices.​​

The dissent breakdown: What each group feared

The vote split tells a revealing story about the Fed’s internal battle over priorities.

Two officials, Austan Goolsbee and Jeffrey Schmid, wanted to pause rate cuts and keep policy unchanged.

They worried that inflation had “been above target for some time” and showed no signs of moving closer to the 2% goal over the entire past year.

For them, cutting rates while prices remain elevated felt backwards, like abandoning inflation-fighting at the worst possible moment.​

A third dissenter, Stephen Miran, actually pushed in the opposite direction.

He wanted a bigger cut of half a percentage point, seeing faster progress on jobs as the priority.

But even his more dovish stance reflected deeper anxiety about the economy’s fragility.​

Here’s the critical point that matters for markets: the two officials who opposed any cut were primarily motivated by inflation concerns, not labor market worries.

This is striking because the Fed’s public messaging emphasized jobs.

The minutes reveal that “progress toward the 2% inflation objective had stalled” in 2025.

When the largest central bank in the world acknowledges that its inflation-fighting efforts are treading water, that’s a warning signal.

Officials noted that if inflation remained above target for longer periods, it could actually “risk an increase in longer-run inflation expectations,” meaning Americans and businesses might stop believing the Fed will ever bring prices back down.​

The phrase that haunted the discussion was “entrenched inflation.”

Several committee members warned directly that “higher inflation becoming entrenched” posed a genuine threat.

Entrenched means it becomes locked into behavior, workers demand higher wages, businesses raise prices preemptively, and the entire economy shifts into a higher-inflation mode that becomes much harder to break.​

Tariffs and persistent pressures

The dissent makes more sense when you look at what’s actually driving inflation.

The minutes show that officials “expressed uncertainty about when these effects would diminish” on tariffs and “the extent to which tariffs would ultimately be passed through to final goods prices”. ​

Core goods prices have already picked up noticeably, and the Fed staff directly attributed much of this to tariffs.

But here’s what kept officials nervous: some participants reported that their business contacts had mentioned “persistent input cost pressures unrelated to tariffs”.

Even without trade policy headwinds, companies are still struggling with rising costs. That’s a separate, structural problem the Fed can’t easily fix with interest rate moves.​

The uncertainty cuts both ways.

Some officials believed tariff effects would fade, reducing upside inflation risks. But others weren’t convinced.

The honest truth buried in these minutes is that the Fed doesn’t have clear visibility into when inflation will genuinely fall back to target.

That uncertainty explains why officials are moving cautiously.

The committee signaled it’s “not on a preset course,” meaning they won’t mechanically cut rates every month.

Each decision will depend on fresh data about whether inflation is actually moving toward 2%.​

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Mark Mahaney – a senior Evercore ISI analyst – has named his top internet stock picks for 2026, highlighting opportunities across both large-cap and small/mid-cap names.

According to him, Amazon, Expedia, and Zillow are particularly strongly positioned for continued momentum in the coming year.

Mahaney’s thesis rests on improving fundamentals, attractive valuation, and narratives he believes aren’t yet fully appreciated by the market.

Let’s take a closer look at what AMZN, EXPE, and Z shares have in store for investors in 2026.

Amazon stock: AI tailwinds and cash flow upside

Mahaney’s top large-cap choice is Amazon, where he sees a powerful combination of improving fundamentals and a shifting narrative around artificial intelligence.

“The AI narrative has flipped positive for Amazon Web Services,” he explained, noting that AWS is positioned to benefit from rising enterprise adoption of generative AI.

Beyond cloud, Mahaney expects Amazon’s free cash flow to inflect higher over the next two years, providing a catalyst for shareholder returns.

Mahaney’s “buy” rating on AMZN stock is tied to a price target of $335, indicating potential upside of a whopping 45% from current levels.

According to him, the titan’s high-margin advertising business will continue to drive growth in the new year (2026).  

Expedia stock: undervalued turnaround story

Mark Mahaney has immense confidence in the new management’s ability to turn around Expedia in 2026.

The company’s leadership is committed to streamlining the EXPE platform and improving the overall customer experience – changes that he believes aren’t fully reflected in the current share price.

Additionally, at a price-to-sales (P/S) multiple of only 2.57, the travel booking giant is trading at a steep discount to peers, despite showing signs of operational improvement, the Evercore ISI expert told clients in a recent research note.

Mahaney sees upside in EXPE stock to about $350 next year, suggesting investors willing to look beyond near-term skepticism could benefit from the company’s improving fundamentals in 2026.

Zillow stock: long-term opportunity after a pullback

In the small- and mid-cap names, Mahaney’s favourite internet stock heading into 2026 is Zillow.

Z shares have lost more than 20% in under four months, which the Evercore ISI analyst dubbed a rare opportunity for long-term investors to initiate or expand a position in them.  

According to him, Zillow stock could recover next year as housing affordability challenges drive more consumers online for listings and rental options.

All in all, Mahaney sees the company’s digital platform as strongly positioned to capture demand once market conditions stabilize.

His “buy” rating on Zillow comes with a $95 price target, indicating potential upside of about 35% from here.

Like other names on his list, however, this Nasdaq-listed firm doesn’t currently pay a dividend to appear particularly attractive for income-focused investors.

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The market value of Nio shares increased during the first week of the month because investors analyzed positive fourth-quarter projections and Chinese government backing, and European market development.

The stock price increased by 4.71% during Monday trading before reaching $5.34, and then it rose by 4.87% to $5.60 during Tuesday trading, according to Benzinga Pro data.

The stock price increased by 4.71% during Monday trading before reaching $5.34, and then it rose by 4.87% to $5.60 during Tuesday trading, according to Benzinga Pro data.

Nio stock jumps on subsidy boost

The stock price increased because of positive Q4 sales projections and Chinese government support for the company.

The Chinese government decided to maintain vehicle trade-in subsidies until 2026, which will boost market demand.

The Austrian market received Firefly delivery services while facing ongoing challenges with semiconductor component availability.

The stock price increased because of positive guidance and supportive government policies.

The Chinese electric vehicle market sector experienced a broad-based market increase when the National Development and Reform Commission of China announced vehicle trade-in subsidies would continue until 2026.

The government extension of trade-in subsidies creates a short-term market advantage for companies that focus on electric vehicle development.

The company founder, William Li, announced to customers that Nio plans to reach 30 billion yuan ($4.27 billion) in vehicle sales during the fourth quarter of 2025, according to 36kr Chinese news outlet.

The company predicted delivery numbers between 120,000 and 125,000 units for the current quarter, which would represent a 65.1% to 72% increase from 2024 levels.

The company expects to generate $4.6 billion to $4.78 billion in total revenue, which would represent a 66.3% to 72.8% increase from the previous year.

The third quarter of 2025 brought Nio $2.7 billion in vehicle sales through 87,071 deliveries, which resulted in $3.06 billion in total revenue.

The company operates in Europe while dealing with a potential shortage of semiconductors.

The premium small EV brand Firefly from Its company started delivering cars to Austrian customers during this week, while the company expanded its market reach through Norway and the Netherlands.

CnEV Post reports that Belgian and Danish, and Greek customers began receiving their vehicles during this current month.

The NIO Day 2024 event brought Firefly to market when the hatchback became available in China during April 2024 and achieved its initial delivery goals.

The European market has experienced rising delivery numbers since mid-2025, while Nio schedules additional market entries for 2026.

The company faces a current shortage of ES8 SUV chip supplies, which will impact manufacturing output and extend delivery times for certain customers.

CNEV Post reports that the company has developed an emergency solution to maintain its production levels.

Why it matters

The market shows interest in Nio because the company achieved better-than-expected results and China kept its subsidy program active, and Europe demonstrated its market development.

The market will observe Nio achieve its fourth-quarter delivery and revenue targets while the company handles its present ES8 component supply shortage.

The European market launch in 2026 will create a fresh business expansion potential for Nio when the company achieves supply stability and executes its expansion plans.

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South Korea’s KOSPI Index was one of the best-performing stock market benchmarks globally in 2025 as it jumped by 75.53% and reached its all-time high. It was trading at KRW 4,215, up by 85% from its lowest level this year. 

Reasons behind the KOSPI Index rally

There were several important drivers for the KOSPI Composite Index this year. The first notable one came from Lee Jae-myung, the country’s president who pledged to push it to KRW 5,000 during his term. 

As part of his plan, he noted that the country would implement some policies to boost the stock market. These policies included corporate governance reforms aimed at removing the South Korean discount. 

This discount refers to the chronic undervaluation of South Korean stocks compared to their peers. Indeed, this discount still exists, with the index having a price-to-earnings (P/E) ratio of 17 compared to S&P 500 Index’s 22.

The KOSPI Composite Index also benefited from the ongoing boom in the artificial intelligence (AI) industry. This boom has lifted several companies that offer products in the industry. For example, Samsung Electronics’ stock jumped by 127% this year.

SK Hynix, another company in the tech industry, soared, with its market cap jumping to over $306 billion. This surge coincided with that of its top competitors, like Western Digital and Micron, which were the top gainers in the S&P 500 Index. 

The KOSPI Index also jumped after South Korea and the United States reached a deal. Donald Trump reduced tariffs to 15% from the previous 25%, while South Korea pledged to invest $350 billion in US assets. The focus areas of these investments will be in shipbuilding, semiconductors, and infrastructure. 

While the 15% tariff is still a high one, the deal helped to reduce the tensions that existed between the two countries. South Korea now hopes that the US Supreme Court will find the 15% tariff illegal. 

The actions by the South Korean Central Bank also had an impact on the KOSPI Index. The central bank slashed interest rates four times, bringing the benchmark rate to 2.5%. 

Most importantly, officials pointed to more cuts in 2026, citing the slowing economy. Still, the country’s bond yields continued rising despite the rate cuts. The ten-year yield rose to 3.385% from the year-to-date low of 2.5%.

KOSPI Composite Index technical analysis

The daily chart shows that the KOSPI Index has been in a strong bull run this year. It ends the year at KRW 4,215, its highest point on November 3. 

The index has remained above all moving averages and the key resistance level at $3,835, its lowest point in November this year. It has remained above all moving averages.

The Relative Strength Index (RSI) and the MACD indicators have continued rising. Therefore, the index will likely continue rising in the coming year as bulls target the key target at KRW 5,000. This view will be confirmed if it moves above the resistance at KRW 4,223 as this will invalidate the double-top pattern.

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China’s economy closed the year with a modest improvement in momentum, as official data showed factory activity expanding in December for the first time since March, offering a positive surprise to markets and economists.

According to data released Wednesday by China’s National Bureau of Statistics (NBS), the official manufacturing purchasing managers’ index (PMI) rose to 50.1 in December, up from 49.2 in November.

The reading also exceeded the 49.2 forecast by economists surveyed by Reuters.

A PMI reading above 50 indicates expansion, while anything below that threshold signals contraction.

Factory activity returns to expansion

The improvement in manufacturing was supported by a pickup in new orders and production.

Huo Lihui, chief statistician at the NBS, said new orders rose in December, signaling a “significant expansion” in both production and demand across the manufacturing sector.

Private-sector data echoed the official figures.

A separate PMI survey from independent research firm RatingDog showed manufacturing activity rising to 50.1 in December from 49.9 in November, beating expectations of 49.8.

Yao Yu, founder at RatingDog, said the data suggested manufacturing had returned to expansion, with total new orders growing for a seventh consecutive month.

Yao attributed the rise in orders to domestic new product launches and ongoing business development, which supported production growth.

However, he cautioned that while firms remain confident about 2026, overall optimism has eased and remains below the historical average.

Broader economic indicators improve

Beyond manufacturing, broader measures of economic activity also showed improvement.

The composite PMI, which tracks both manufacturing and services, climbed to 50.7 in December from 49.7 in November, pointing to wider-based growth across the economy.

China’s non-manufacturing PMI, covering services and construction, rose to 50.2 from 49.5 in the previous month, indicating that activity in these sectors also moved back into expansion territory.

The gains were driven primarily by large enterprises.

Data from the NBS showed the PMI for large firms rose to 50.8 in December, up 1.5 percentage points from November.

In contrast, activity among smaller companies remained weaker.

The PMI for medium-sized enterprises increased slightly to 49.8, while the index for small enterprises fell to 48.6, down 0.5 percentage points from the previous month.

Market reaction and policy backdrop

Financial markets fell after the data release.

Hong Kong’s Hang Seng index fell 0.87% following the release, while mainland China’s CSI 300 index also fell 0.44%.

The PMI figures came shortly after China’s central bank decided earlier this week to keep its loan prime rates unchanged, despite ongoing economic challenges.

The world’s second-largest economy continues to face pressure from a prolonged slump in the property sector and softer-than-expected recent data.

November retail sales and industrial output both missed expectations, and fixed-asset investment contracted.

Still, some economists viewed the December PMI data as an encouraging sign.

Hao Zhou, chief economist at Guotai Junan International, described the reading as a “very good, positive surprise to the market” in comments to CNBC’s “Squawk Box Asia.”

He noted that while concerns remain around China’s property market, stock market, and consumption, the latest data suggests the economy is moving in the right direction, with momentum appearing to remain solid heading into the new year.

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Asian markets closed out the year on a subdued note amid thin holiday trading, capping a year of strong gains driven by enthusiasm for artificial intelligence stocks and resilient risk appetite.

Elsewhere, geopolitical tensions resurfaced with a Ukrainian drone attack on a major Russian oil refinery, the United Nations approved budget cuts amid a funding crunch, and China’s latest data showed manufacturing activity returning to expansion for the first time since March, offering a modest boost to sentiment.

Asian markets drift at year-end as AI boom dominates 2025

Asian stocks drifted on the final trading day of the year, with investors reflecting on a period marked by strong equity returns despite tariff tensions, geopolitical risks, and policy uncertainty.

MSCI’s broadest index of Asia-Pacific shares outside Japan was unchanged at 0.02% gain on Wednesday and is set to post a 27% gain for the year, its strongest performance since 2017.

Much of that advance was driven by a rally in chipmakers amid the artificial intelligence boom.

China’s blue-chip index edged higher and is on track for a 21% annual gain, while Hong Kong’s Hang Seng slipped 0.8% on the day but is still poised for a 30% rise in 2025.

South Korea’s Kospi stood out as the world’s best-performing major market, up 76% for the year, with gains led by SK Hynix and Samsung.

Currency and commodity markets also reflected the year’s major themes.

The US dollar is heading for a 9.4% annual decline, its worst since 2017, leaving the euro and sterling with strong gains.

Gold is on track for a 66% rise in 2025, while silver’s gains exceeded 160%, despite some late-year profit-taking.

Ukrainian drone attack hits key Russian oil refinery

Geopolitical risks remained in focus after a Ukrainian drone attack injured two people and sparked a fire at the Tuapse oil refinery in Russia’s Krasnodar region, according to local authorities.

The blaze, which burned around 300 square metres, was quickly extinguished, though officials did not disclose whether refinery operations were halted.

The strike reportedly damaged refinery equipment, one port berth, and several homes nearby.

Tuapse is a critical Black Sea outlet for Russian oil products and is anchored by Rosneft’s export-oriented refinery, which has a capacity of about 240,000 barrels per day.

The facility and port have been targeted repeatedly during the war, at times disrupting operations.

UN approves budget cuts amid deepening financial strain

The United Nations General Assembly approved a $3.45 billion operating budget for 2026, representing a 7% cut from this year, as the organization grapples with a financial crisis driven largely by unpaid dues.

The reduction includes the elimination of around 2,900 positions.

UN Secretary-General Antonio Guterres has warned that liquidity remains fragile due to a high level of arrears, most of which are owed by the United States.

While the US typically contributes 22% of the UN’s regular budget, it has not paid its 2025 dues and still owes significant arrears from previous years.

China manufacturing activity returns to expansion

China’s economy ended the year with a modest improvement in momentum, as official data showed factory activity expanding in December for the first time since March.

The official manufacturing purchasing managers’ index rose to 50.1 in December from 49.2 in November, beating expectations.

Broader indicators also improved, with the composite PMI climbing to 50.7 and the non-manufacturing PMI rising to 50.2.

The gains were driven mainly by large enterprises, while smaller firms continued to lag.

Economists described the data as a positive surprise, even as challenges persist from a property sector slump and softer recent economic readings.

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