Global markets are generally falling today (December 12, 2025) due to investors reacting to high interest rate signals from the US Federal Reserve, growing worries about AI stock valuations, potential weakening of US-China trade relations, significant profit-booking after recent rallies, and concerns over specific sectors like tech and real estate, leading to broad risk-off sentiment.

Key Factors Driving the Decline:

Higher-for-Longer Interest Rates: Comments or data suggesting the Fed might keep rates elevated longer than anticipated dampens investor enthusiasm, making borrowing costlier for companies and reducing stock appeal.

AI Hype Cools: After a strong run, some investors are taking profits and questioning the extreme valuations of AI-related stocks, causing a sector pullback.

Geopolitical & Trade Uncertainty: Lingering US-China trade tensions and policy unpredictability create market jitters, especially for global supply chains.

Inflation & Economic Data: Stronger-than-expected economic data can push yields up, signaling persistent inflation and prompting rate hike fears, while upcoming inflation reports (like PCE) create anticipation and volatility.

Profit-Booking & Expiry: Ahead of major options/futures (F&O) expirations, investors often sell existing holdings to lock in profits, adding downward pressure.

Sector-Specific Weakness: Weak guidance from major tech companies (like Meta) or slowing performance in key areas like Chinese semiconductor stocks can drag down broader indices. In essence, it's a mix of macroeconomic caution (rates, inflation) and profit-taking after a strong market run, amplified by global uncertainties.