Entering 2026: Market Trends and Sectoral Analysis

Market Developments and General Analysis

As we welcome the year 2026 on this first trading day, U.S. indices closed higher, ending the 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 notable recovery. Following the year-end rally that was not observed by the end of 2025, the direction of 2026 in global markets appears to depend on the path of monetary policies and macroeconomic data.

Monthly Data Calendar and Expectations

This week, the data calendar in the U.S. becomes more intense. The process will begin with the ISM manufacturing PMI data to be announced. Additionally, the ADP private sector employment report, JOLTS job openings, and non-farm payroll data will also be closely monitored by investors.

Fed's Interest Rate Cut Expectations

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

Geopolitical Risks and Their Impact on Markets

The operation carried out by the U.S. towards Venezuela is another development that raises risk premiums. However, market reactions appear to remain limited for now. The energy markets have not seen significant short-term volatility; crude oil futures are trading with a nearly 1% decline, while gold and silver prices are showing upward responses.

Developments in Asian Markets

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

Turkey's Markets and Inflation Data

Domestically, the significant agenda item for the 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 disinflation trend.

Investment Strategies and Stocks

The BIST 100 index in Borsa Istanbul started strong, led by bank shares, and the technical outlook has improved in a positive direction. Additionally, with the central bank's interest rate cut process, a downward trend is being observed in bond yields. The Turkish lira's weak performance against the global dollar is noteworthy.

As we start the year 2026, the impact of developments both domestically and abroad on pricing should be taken into account. Inflation data and the stance of the Central Bank of Turkey will hold critical importance for investors.