Entering 2026: Market Trends and Sector Analysis

Market Developments and General Analysis

As we greet the year 2026 on this first trading day, U.S. indexes closed higher, ending a recent streak of declines. Technology stocks and the semiconductor sector stood out, while the positive outlook in industrial and defense stocks supported the Dow Jones. However, weak signals from giants like 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 distinct recovery. Following the year-end rally, which was not observed at the end of 2025, the direction of global markets in 2026 seems likely to depend on the course of monetary policies and macro data.

Monthly Data Calendar and Expectations

From this week onwards, the data calendar in the U.S. is becoming busier. The process will begin with the upcoming ISM manufacturing PMI data. Additionally, ADP private sector employment, JOLTS job openings, and non-farm payroll data will be closely monitored by investors.

Fed’s Interest Rate Cut Expectations

On the Fed front, it is anticipated that data regarding the employment market will be decisive for interest rate cut expectations. A weak employment report could support interest 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 targeting Venezuela stands out as another development that has increased risk premiums. However, market reactions have so far remained limited. The energy markets have not experienced significant fluctuations in the short term; crude oil futures are trading with a decline of about 1%, while gold and silver prices are responding upward.

Developments in Asian Markets

In the Asian stock markets, a buying trend is observed in Japan, China, and Hong Kong. Statements from the Bank of Japan suggest that the possibility of tightening monetary policy is on the agenda.

Turkey Markets and Inflation Data

Domestically, the important agenda item this week is the inflation data for December. Monthly inflation is expected to be around 1%. This data may indicate an annual inflation rate of about 31% and could maintain the trend of disinflation.

Investment Strategies and Stocks

The BIST 100 index in Borsa Istanbul started strongly led by bank stocks, and the technical outlook has developed positively. Additionally, with the ongoing interest rate cut process of the CBRT, a downward trend in bond yields is also being observed. The weak performance of the Turkish Lira against the global dollar is notable.

As we begin the year 2026, the effects of developments both domestically and abroad on pricing must be taken into account. Inflation data and the stance of the CBRT policy are of critical importance for investors.