European Stocks Soar as AI-Led Rally Marks 2026

European stocks started 2026 with record gains as markets prepare for AI-driven growth, changes at the U.S. Federal Reserve, and potential volatility with Donald Trump's presidency. The FTSE 100 reached 10,000 points and the STOXX 600 hit a new peak, driven largely by falling interest rates and Germany's fiscal policies.

European stocks surged to new heights as 2026 kicked off, buoyed by an AI-driven rally and anticipation of changes at the U.S. Federal Reserve. London's FTSE 100 reached a significant milestone of 10,000 points, while the pan-European STOXX 600 index continued its upward momentum.

Asian markets also celebrated gains, with Hong Kong stocks reaching a fresh 1 1/2-month high and Taiwan, South Korea, and Singapore achieving record levels. Precious metals sustained their strong performance, bolstered by various economic factors, including geopolitical uncertainties and central bank buying.

Looking ahead, market focus remains on the U.S. economy and Federal Reserve policies, with potential rate cuts on the horizon. Investors continue to navigate a complex landscape marked by AI enthusiasm and global political concerns, requiring vigilance for potential market fluctuations.

(With inputs from agencies.)