Entering 2026: Market Trends and Sector Analysis

Market Developments and General Analysis

As we say hello to the year 2026 on this first trading day, US indices closed higher, ending the recent series of declines. Technology shares 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, representing small-cap firms, also showed a significant recovery. After the year-end rally that wasn’t observed by the end of 2025, the direction of global markets in 2026 seems to depend on the course of monetary policies and macroeconomic data.

Monthly Data Calendar and Expectations

This week, the data calendar in the US is getting busier. The process will start with the upcoming ISM manufacturing PMI data. Additionally, ADP private sector employment, 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, employment data is expected to 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 postpone these expectations.

Geopolitical Risks and Their Effects on Markets

The US operation against Venezuela stands out as another development increasing risk premiums. However, market reactions have been limited so far. Energy markets have not seen significant fluctuations in the short term; crude oil futures are trading with a nearly 1% decline, while gold and silver prices are responding upward.

Developments in Asian Markets

Asian stock markets show a buying trend in Japan, China, and Hong Kong. Recent statements from the Bank of Japan indicate that tightening monetary policy could be on the agenda.

Turkey Markets and Inflation Data

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

Investment Strategies and Stocks

The BIST 100 index started strongly, led by bank stocks, and the technical outlook has developed positively. Additionally, with the ongoing interest rate cut process by the Central Bank of the Republic of Turkey (TCMB), a downward trend has been observed in bond yields. The Turkish Lira's weak performance against the global dollar is noteworthy.

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