Weekly market commentary

Market review

Global markets began the third week of January balancing political uncertainty, the first signals from earnings season, and renewed interest in industrial metals. Caution set in early after reports that Federal Reserve Chair Jerome Powell may face a criminal indictment related to renovation disclosures at the Fed’s headquarters. The news weighed on US equity futures as investors considered the potential implications for confidence in the central bank.

Geopolitical developments added to market unease. President Trump again expressed interest in purchasing Greenland, reviving an issue that has previously tested relationships with US allies. At the same time, reports from Iran pointed to escalating unrest, with estimates suggesting more than 2,000 fatalities linked to ongoing protests. Markets remained resilient despite these pressures, though investors approached the week’s upcoming economic data with care.

In the US, December inflation data came in broadly as expected. Headline inflation held at 2.7%, and core inflation at 2.6%, reinforcing a sense of stability as price pressures are settling. In the UK, the Office for National Statistics (ONS) reported that Gross Domestic Product (GDP) grew by 0.3% in November. This was better than expected and reversed declines seen in the two previous months, lifting annual growth to 1.4%.

In Asia, attention turned to Japan, where speculation around a possible snap election influenced bond markets. Long‑term Japanese government borrowing costs rose, with one key bond reaching its highest level in nearly 27 years.

Earnings season also got under way. Delta Airlines reported stronger than expected revenue and earnings, supported by steady demand for premium travel. Major US banks posted solid top‑line growth while keeping a cautious outlook. Taiwan Semiconductor (TSMC) delivered standout results, with Q4 revenue rising over 30% year on year and record profits driven by strong Artificial Intelligence (AI) related chip demand.

Outlook

Markets continue to watch economic data closely, with volatility driven by major announcements. Geopolitical risks remain in the background, adding another layer of uncertainty. Differences in inflation trends and uneven economic growth are leading central banks to take increasingly varied approaches, while fiscal policy and liquidity conditions add further complexity. Together, these factors suggest we may see greater differences in how assets and regions perform in the months ahead.

Movers table