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 the 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 like Apple, Microsoft, and Amazon limited the gains in the S&P 500 and Nasdaq.

Recovery in Small-Cap Stocks

The Russell 2000 index, representative of small-cap firms, showed a significant recovery. After the year-end rally, which was not observed by the end of 2025, the direction of global markets in 2026 seems to depend on the course of monetary policies and macro data.

Monthly Data Calendar and Expectations

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

Fed's Interest Rate Cut Expectations

On the Fed front, it is anticipated that data regarding the labor 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 may delay these expectations.

Geopolitical Risks and Their Impact on Markets

The U.S. operation towards Venezuela stands out as another development that increases risk premiums. However, market reactions seem to be limited for now. Energy markets have also not experienced significant volatility in the short term; crude oil futures are trading with a nearly 1% decline, while gold and silver prices show upward reactions.

Developments in Asian Markets

In Asian stock markets, buying trends are observed in Japan, China, and Hong Kong. Statements 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 of the week is the inflation data for December. Monthly inflation is expected to be around 1%. This data could indicate a yearly inflation rate around 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 developed positively. Additionally, with the ongoing interest rate cut process by the Central Bank of the Republic of Turkey (CBRT), there is a downward trend in bond yields as well. The weak performance of the Turkish Lira against the global dollar is noteworthy.

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