The First Read on 2026

👋 ICYMI

U.S. markets wrapped up the final trading week of 2025 and kicked off 2026 with mixed but resilient performance. After holiday-thin volumes, major indexes began the new year modestly higher, led by industrials and financials, while tech showed pockets of softness. Precious metals — which surged to record levels late in 2025 — retraced some gains but remain elevated compared with year-ago levels as investors balance equity optimism with geopolitical and macro uncertainty. Global markets, including the UK’s FTSE 100, also started 2026 on upbeat footing, reflecting broad investor confidence in earnings and cyclical support.

🔁 Market Movers

• 📊 U.S. Equities Start 2026 With Calm Strength

  The Dow Jones Industrial Average jumped more than 300 points to open the new trading year, while the S&P 500 climbed modestly and the Nasdaq saw more muted gains as investors rotated into value and cyclical names.

• 📉 Tech Weakness Lingered Late in 2025

  In the holiday-shortened week of Dec. 29, major tech names lost ground, pulling the Nasdaq and S&P slightly lower before year-end. Tech weakness reflected profit-taking after strong 2025 performance and lighter liquidity.

• 🪙 Precious Metals Retrace but Remain Elevated

  Gold and silver, after hitting record highs in late December amid rate-cut hopes and geopolitical tension, pulled back but stayed above prior levels — signaling ongoing safe-haven interest alongside equity gains.

• 🌍 FTSE 100 Hits Record Early in 2026

  Across the Atlantic, the UK’s FTSE 100 crossed above 10,000 for the first time, driven by strong performance among miners and defensive sectors, even as U.S. tech softened — a sign of robust global investor confidence at the start of 2026.

👀 Signals I’m Watching

• 📈2026 Earnings & AI Narratives Still in Focus

  Despite some tech softness, strong earnings momentum — especially around AI and infrastructure — remains a potential tailwind into January and beyond. Morgan Stanley $MS ( ▲ 2.46% ) forecasts a notably higher S&P 500 target for 2026, driven by synergistic fiscal and monetary support coupled with AI-efficiency gains.

• 🛠️ Industrial Names Gaining Early Leadership

  2026 opened with heavy equipment stocks like Caterpillar $CAT ( ▲ 4.46% ) and industrial gas suppliers like Linde $LIN ( ▲ 0.64% ) seeing notable gains as analysts raised targets and investors focused on capital goods strength.

• 💼 Banks and Financials Are Quietly Outperforming

  Citigroup $C ( ▲ 1.72% ) and Goldman Sachs $GS ( ▲ 4.02% ) both climbed in early trading as the new year began, suggesting financials may be carving out leadership alongside cyclicals.

• 🧠 Early Trading Reaction to Jobs Data Looms

  With a relatively light earnings slate but major U.S. jobs data on the horizon, markets are positioning cautiously; labor trends have historically been among the most market-moving macro reports.

⚠️ Red Flag to Note

Geopolitical Price Pressures Could Re-Emerging

While equity markets have started the year with resilience, geopolitical tensions — including energy supply concerns and trade uncertainty — still pose potential price shocks that could affect commodity markets, currency flows, and risk sentiment if escalated unexpectedly.

🔍 Insider Transactions I’m Watching

→✨NEW ✨ My framework for reading insider moves — when buy signals outweigh noise (and when they don’t)

📬 Closing Note

Investors have reasons to be constructive — especially as liquidity returns after the holidays. Keep risk controls tight, watch macro catalysts like jobs and inflation data, and approach 2026 with both optimism and discipline.

Here’s to a strong start and thoughtful positioning in the year ahead.

Until next Sunday,

George