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3d ago

Markets Start 2026 on Broad Rally’s Momentum as Fed Caution, Jobs Data and Venezuela Test Sentiment

Investors are recalibrating rate‑cut expectations after divided Fed minutes, putting this week’s U.S. labor readings in sharp focus.

South Korea's benchmark Kospi index surged almost 76% in 2025.
Commuters drive past the Taiwan Semiconductor Manufacturing Company's fabrication plant in Kaohsiung, Taiwan, on June 7, 2025. TSMC shares hit record highs in 2025.
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Tourists watch the 5th century B.C. Parthenon temple free of scaffolding after decades of restoration, in Athens on October 17, 2025.

Overview

  • Measured across equities, bonds, credit and commodities, 2025 was the strongest cross‑asset year since 2009, lifted by AI enthusiasm, easing inflation and three Fed rate cuts, with gold hitting records.
  • Minutes from the Fed’s December meeting highlighted internal splits and signaled that cuts in 2026 could be limited, tempering hopes for aggressive easing as yields and the dollar held firm into the new year.
  • Friday’s U.S. December jobs report headlines a labor‑heavy data slate that will guide bets for the Fed’s late‑January decision, with markets largely expecting no change in rates for now.
  • Indian benchmarks touched fresh highs to start the year led by banks and autos, then saw a muted Monday open as IT stocks fell on tariff concerns and traders shifted attention to upcoming Q3 results.
  • Reports of U.S. military action in Venezuela, including the capture of President Nicolás Maduro, added short‑term uncertainty for energy markets, with oil prices choppy and investors watching potential knock‑on effects.