Market Watch: 2026 Starts with Economic Waves Amid AI and Fed Shifts

Stocks opened strongly in 2026 despite low liquidity due to holidays, with a focus on AI and Federal Reserve changes. Precious metals sustained last year's gains. The market's 2025 rally was driven by AI, robust earnings, and retail flows. Fed policy remains pivotal amid U.S. dollar weakness.

Stocks began 2026 on a positive note despite thin holiday trading, as investors anticipated the impacts of AI developments and upcoming changes at the Federal Reserve. This comes amid potential market turbulence under Donald Trump’s presidency.

Markets saw muted moves across different asset classes, maintaining momentum from the previous year's rally, with limited liquidity due to New Year’s celebrations. Notably, precious metals continued their upward trend, with gold rising by 0.9% and silver jumping 2%.

In 2025, gold experienced its largest gain in 46 years, driven by factors such as Federal Reserve rate cuts and geopolitical tensions. Meanwhile, Asia-Pacific and U.S. stock indices showed slight increases, whereas European futures were mixed. Investors now focus on the Federal Reserve's policy path amid economic uncertainties.