Entering 2026: Market Trends and Sectoral Analysis

Market Developments and General Analysis

On this first trading day of 2026, U.S. indices closed higher, ending a recent streak of declines. Technology stocks and the semiconductor sector stood out, while the positive outlook for industrial and defense stocks supported the Dow Jones. However, weak signals from giants such as Apple, Microsoft, and Amazon limited the rise in the S&P 500 and Nasdaq.

Recovery in Small-Cap Stocks

The Russell 2000 index, representing small-cap firms, also showed a notable recovery. Following the year-end rally that was not observed at the end of 2025, the direction of the global markets in 2026 seems to depend on the course of monetary policies and macroeconomic data.

Monthly Data Calendar and Expectations

This week marks the beginning of a busy data calendar in the U.S. The process will start with the release of the ISM manufacturing PMI data. Additionally, the ADP private sector employment, JOLTS job openings, and non-farm payroll data will be closely monitored by investors.

Fed's Interest Rate Cut Expectations

It is anticipated that employment market data will be decisive for interest rate cut expectations from the Fed. A weak employment report could support rate cuts for the second half of the year, while strong data could delay these expectations.

Geopolitical Risks and Their Impact on Markets

The U.S. operation against Venezuela is drawing attention as another development that has increased risk premiums. However, market reactions appear to be limited for now. Energy markets have not experienced major fluctuations in the short term; crude oil futures are trading with a decline of nearly 1%, while gold and silver prices are showing upward responses.

Developments in Asian Markets

In Asian stock markets, a bullish trend is being observed in Japan, China, and Hong Kong. Announcements from the Bank of Japan indicate that the possibility of tightening monetary policy is on the agenda.

Turkish Markets and Inflation Data

Domestically, the important agenda item for the week is the December inflation data. Monthly inflation is expected to occur at around 1%. This data could signal an annual inflation rate of about 31% and may continue to reflect a disinflation trend.

Investment Strategies and Stocks

The BIST 100 index in Borsa Istanbul made a strong start led by bank stocks, and the technical outlook has developed positively. Additionally, with the TCMB's interest rate cut process, a downward trend in bond yields is also being observed. The Turkish Lira's weak performance against the global dollar stands out.

As we begin 2026, the effects of both domestic and international developments on pricing should be considered. Inflation data and the stance of the TCMB are of critical importance for investors.