Weekly market commentary

Market review

Global equities were mixed while bond markets moved higher over the week. Asia and Japanese equities were standout performers as Korean stocks continued their positive momentum, while the landslide victory in the lower house for Japanese Prime Minister Sanae Takaichi helped domestic stocks move higher. US stocks underperformed over the week due to more fears about AI disruption which led to risk-off sentiment in the market which supported bond prices. We also saw soft Q4 GDP data in the UK, a strong jobs report in the US and signs of progress towards a deal between the US and Iran.

Global stocks in Asia got off to a strong start to the week with Korea being one of the standout performers, boosted by the news that Samsung Electronics will commence mass production of its next-generation HBM4 memory chips later this month. Meanwhile in Japan, equity markets moved higher after Japanese PM Takaichi won a huge majority of 316 seats out of 465 which was the largest election win for a single party in Japan in the post WW2 era. The ‘supermajority' has raised the likelihood of even more aggressive fiscal policy which was well received by investors.

In the US, fears of AI disruption are continuing, impacting software stocks as well as sectors like wealth management and logistics. A new tax-strategy AI tool from Altruist Corp sparked a sell-off in wealth-management stocks as investors fear businesses could be at risk from automated advice. Meanwhile a small AI logistics company called Algorhythm (formerly a Karaoke company) said it could scale freight volumes by 300-400% without increasing headcount, which caused other logistic stocks to fall. Whilst the full impact on these sectors is unknown, investors appear to be taking a ‘sell now and worry later approach’. The risk-off sentiment supported bond markets as investors moved into safer assets.

On the economic data front, the US saw a strong nonfarm jobs report, with the US adding 130,000 jobs in January which was above expectations of 70,000 jobs. However, retail sales growth – a measure of consumer demand – stalled in December, falling short of forecasts for a 0.4% gain. Moving closer to home, UK GDP Growth was 0.1% in Q4 2025, below expectations of a 0.2% rise. The lower growth rate provided further support to UK gilt prices over the week.

Oil prices fell over the week as reports suggest Venezuelan officials may grant more oil permits to Chevron and Repsol, while Trump announced he would like to ‘reach a deal’ with Iran over the next month.

Outlook

Markets remain attentive to evolving economic data, with volatility centred around key macro announcements, while geopolitical risks continue to grab the headlines. Diverging inflation paths and uneven growth are driving increasingly asymmetric central bank policies, while fiscal dynamics and liquidity conditions add complexity. This backdrop sets the stage for greater dispersion across assets and regions in the months ahead.

Movers table