Global Markets Enter 2026: Mixed Returns & a Metals Surge Shake Outlook

At the close of 2025, global equities displayed contrasting dynamics as the holiday season resulted in closures across several major exchanges, especially in Asia and parts of Europe. Markets that remained open saw light volume and mixed results, reflecting cautious positioning amid year-end risk management and uncertainty over future policy directions. [1][2]

In Asia, indices diverged: the Hang Seng index dropped significantly (near 0.9%), while China’s Shanghai Composite showed marginal gains (about +0.1%) and Taiwan’s Taiex climbed close to 0.9%. Australia’s ASX 200 edged lower by <0.1%. These movements reflect a market environment sensitive to domestic economic signals and global supply chain pressures. The mixed performance is compounded by the fact that Tokyo and Seoul were closed for multiple days given the New Year holiday, reducing regional liquidity. [1][2][4]

European markets saw slight declines in core indices: France’s CAC 40 was down ~0.5%, Britain’s FTSE 100 dropped about 0.2%. Nonetheless, European equities are finishing the year strong; the STOXX 600 is posting its best performance since 2021 with gains of approximately 16% year-on-year. Defensive sectors, notably banks and defence contractors, are among year-end beneficiaries of fiscal stimulus and shifting investor preferences. [3][15]

US equity markets experienced light losses (~0.1-0.2%) in thin trading ahead of the New Year. Despite the weak close, the broader equity benchmarks (S&P 500, Nasdaq, Dow Jones) are all on track for double-digit advances in 2025, driven by strength in tech, AI, and yield expectations. [1][2][14]

In commodities, a standout story: precious metals have outperformed dramatically. Silver is up ~140% for the year; gold’s gains are estimated at ~65%. Base metals like copper surged over 40% YTD, tied to robust demand outlooks linked with AI infrastructure and global energy investments. [1][4]

Strategic implications include potential volatility in early January as markets re-open, with policy uncertainty still central (rate decisions, inflation trajectory). Weak consumer confidence and rising inflation pressures, especially in the US, together with global trade tensions, make the near-term outlook fragile. Investors would do well to guard against overlapping risks as they take new positions. Open questions linger around how central banks will navigate inflation vs growth trade-offs in 2026, and how much of the commodity rally is sustainable in face of potential demand shocks or supply constraints easing.