United States
Wall Street extended its bullish early-January run on Friday, with US stocks hitting new closing records as bets on economic growth coalesced with expectations that the Federal Reserve remains on track to cut rates.
The S&P 500 rose 0.6 per cent to a fresh record while the Nasdaq 100 jumped 1 per cent. Small-cap and blue-chip benchmarks also hit new peaks as the rally broadened beyond big tech names. The Russell 2000 has been the standout performer to start 2026, beating the Nasdaq 100 by around 4 percentage points in the first week of trading – the second-best outperformance to start a year on record.
Stocks had dipped briefly after the Supreme Court failed to weigh in on the fate of President Trump’s import levies, but investors quickly refocused on the employment data. Nonfarm payrolls increased by 50,000 in December, below expectations of 70,000, while the unemployment rate fell to 4.4 per cent from 4.6 per cent in November. Revisions revealed fewer jobs created than previously believed, with private payrolls bearing the brunt of the downgrade.
Swaps traders are still expecting around half a percentage point of Fed rate cuts in 2026, with a January cut largely off the table. The data is expected to keep the Fed on hold for now, though policymakers will remain vigilant for signs of further labour market softening.
The 10-year Treasury yield was little changed at 4.17 per cent, while the US dollar rallied to a one-month high. The yen weakened the most among G10 currencies.
In corporate news, Meta Platforms agreed to a series of electricity deals for its data centres that will make it the biggest buyer of nuclear power among its hyperscaler peers. General Motors announced it will take another US$6 billion in charges tied to production cutbacks in its electric vehicle and battery operations.
Europe
European stocks ended the week at a fresh record high on Friday, with tech leading the charge after TSMC’s sales beat raised hopes of sustained global AI spending.
The Stoxx 600 gained 1 per cent, with tech stocks adding to their weekly gains. ASML jumped 6.8 per cent to a record close, while ASM International climbed 5.9 per cent. The sector posted its strongest weekly performance in months.
Mining stocks were in focus after Rio Tinto and Glencore confirmed they are in talks about joining forces to create the world’s biggest miner. Glencore surged 9.6 per cent, while Rio Tinto fell 3 per cent on concerns about the premium it may need to pay.
Defence stocks led the industrials sector to its best weekly gain since 2022, with Rheinmetall gaining 2.6 per cent and Rolls-Royce rising 1.7 per cent to a record close. BAE Systems and Saab also had their price targets lifted following President Trump’s military spending plans.
Luxury stocks outperformed after UBS upgraded L’Oréal and predicted an improvement in industry growth. L’Oréal jumped 6.3 per cent, LVMH gained 2.8 per cent, and Hermès added 3.7 per cent. However, Pandora was the week’s worst performer, slumping 13 per cent as weak US sales deepened concerns about the impact of rising silver prices on margins.
BNP Paribas hit a 2007 high after winning three ratings upgrades during the week.
Australia
The local market is set for a positive start to the week, with ASX 200 futures pointing to gains of around 0.3 per cent at the open.
Rio Tinto remains the dominant story. Reports suggest a deal with Glencore is closer than ever, with the premium and CEO succession now the key focus areas. Rio Tinto is reportedly open to owning coal assets if talks are successful – a significant shift given the company’s previous stance on thermal coal. The miner tumbled 6.3 per cent on Friday as investors digested the potential dilution from an all-stock merger.
The SEC announced it will drop its long-running fraud case against Rio Tinto’s former CFO, removing one legal overhang from the company.
Among broker moves, AMP was upgraded to buy at Citi with a price target of $2.10, while Brambles was also raised to buy. Ramelius Resources was upgraded to buy at Goldman Sachs, while Capricorn Metals and Vault Minerals were both cut to neutral.
New Zealand’s Rakon received a takeover notice from US-based Bourns, adding to the wave of M&A activity in the region.
On the economic front, US Treasury Secretary Scott Bessent has reportedly invited Australia and India to discuss critical minerals partnerships, potentially opening new avenues for resource exports.
Commodities and currencies
Oil notched its longest streak of weekly gains since June as geopolitical tensions intensified. Iran escalated its crackdown on protests across the country, and President Trump threatened repercussions if demonstrators were targeted. Brent crude rose 2.2 per cent to US$63.34 a barrel, while West Texas Intermediate gained 1.7 per cent to US$58.76.
Major oil executives from ExxonMobil, Chevron, and veteran wildcatter Harold Hamm met with Trump and senior officials at the White House on Friday to discuss rebuilding Venezuela’s energy sector. Chevron, the only American major currently permitted to operate in Venezuela, is loading tankers at the fastest pace in seven months.
Gold climbed 0.6 per cent to US$4,506.63 an ounce, extending its winning streak. Precious metals dominated ETF returns in 2025, with gold benefiting from central bank demand, geopolitical tensions, and safe-haven buying.
Iron ore eased slightly but remained near recent highs as Chinese restocking continued ahead of the Spring Festival holidays.
The Australian dollar slipped 0.3 per cent to US66.79 cents. Bitcoin fell 1.1 per cent to around US$90,100.
Economic Calendar
No Major Economic Releases
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
