Weekly market commentary

Market review

Geopolitics remained in focus this week, particularly with attention on the World Economic Forum in Davos. Comments from the US President about Greenland created concerns around defence and trade relations between the US and the EU. This caused some early volatility in markets, however conditions later stabilised as tensions eased.

Global stock markets eased slightly after their strong start to the year. Earlier gains had been supported by steady economic data and optimism around Q4 company results. US earnings season has now begun, and early updates from banks, industrial companies and healthcare firms have mostly met or slightly exceeded expectations. The S&P 500 is on track for a fifth quarter of strong double digit earnings growth, helped by technology, investment in artificial intelligence, and select cyclical sectors. Some emerging markets also performed well due to favourable currency movements and progress on domestic reforms.

Bond markets saw sharp movements this week, with increased volatility in yields. In Japan, long dated government bonds saw sharp moves, with the 30 year yield rising to its highest level in decades after a weak auction and more cautious comments from the Bank of Japan. US Treasury yields also rose as strong economic data reduced expectations of interest rate cuts in 2026, while concerns about government spending and trade policy added pressure. Similar trends were seen across major European bond markets.

Commodity prices moved sharply. Gold and silver reached record highs as investors looked for protection against uncertainty. Oil prices were steadier due to hopes of progress in peace talks and shifts in Venezuelan supply. Natural gas prices increased as colder than average temperatures were forecast across the US.

Outlook

Markets continue to react to shifting economic data, with price swings following major announcements. Geopolitical risks remain in the background but are gradually becoming more significant. Different inflation trends and uneven growth across countries are leading central banks to take varied approaches, while government spending and cash flow conditions add further uncertainty. Overall, this environment is likely to create wider differences in performance across regions and asset classes in the months ahead.

Movers table