Global Markets Weekly Update - January 02, 2026
U.S. Market Overview
U.S. stocks experienced a decline during the holiday-shortened week, with most indexes closing out 2025 on a positive note, having achieved double-digit gains for the third consecutive year. The Nasdaq Composite saw the largest drop, while the Dow Jones Industrial Average and S&P MidCap 400 Index performed relatively better, losing 0.67% and 0.71%, respectively. The energy sector was a standout performer, benefiting from rising oil prices due to geopolitical tensions.
Housing Market Insights
The National Association of Realtors reported a 3.3% increase in the Pending Home Sales Index for November, the largest monthly increase since February 2023. This surge is attributed to lower mortgage rates and wage growth outpacing home price increases, enhancing housing affordability.
Federal Reserve Updates
The Federal Reserve's minutes from the December meeting indicated a division among policymakers regarding future rate cuts. While most officials support further cuts if inflation decreases, some advocate for maintaining the current rate for an extended period. Jobless claims fell to 199,000, marking a three-week decline.
Bond Market Performance
U.S. Treasury yields showed mixed performance, with shorter-term yields stable and longer-term yields rising. High yield bonds outperformed investment-grade corporate bonds amid low trading volumes.
European Market Highlights
The pan-European STOXX Europe 600 Index reached a new high, closing 1.26% higher, supported by a favorable economic environment. Inflation in Spain eased to 3.0%, while France saw a decrease in registered unemployment.
Japan's Economic Landscape
Japan's stock markets declined slightly, with the Nikkei 225 Index down 0.8%. The yield on the 10-year Japanese government bond rose to its highest level since 1999, reflecting expectations of continued interest rate increases by the Bank of Japan.
China's Manufacturing Sector
China's manufacturing purchasing managers' index improved to 50.1 in December, signaling an end to an eight-month contraction. This suggests a cautious approach to stimulus measures by the government in 2026.
Other Key Markets
In Colombia, a significant minimum wage increase could lead to higher inflation, while South Korea's stock market started the new year strong, buoyed by record export figures.
Market Index Performance
| Index | Friday's Close | Week's Change | % Change YTD |
|---|---|---|---|
| DJIA | 48,382.39 | -328.58 | 0.66% |
| S&P 500 | 6,858.47 | -71.47 | 0.19% |
| Nasdaq Composite | 23,235.63 | -357.47 | -0.03% |
| S&P MidCap 400 | 3,349.39 | -23.90 | 1.34% |
| Russell 2000 | 2,508.22 | -26.12 | 1.06% |
This summary is for informational purposes only and does not constitute investment advice.