USA: Moderate declines, less fear and more indecision

The last trading week of 2025 and the first few days of 2026 were characterized by relatively thin trading in the US, as expected around the end-of-year holidays. The major stock indexes recorded slight declines, but without significant signs of pressure.

The declines were not accompanied by a sharp increase in volatility, on the contrary:
the VIX index fell by about 1.16%, which suggests that the market is not pricing in systemic risk but mainly tactical adjustments after a long rally during the year.

The US dollar index (DXY) rose by about 0.16%, an important figure in a broader context. A moderate strengthening of the dollar alongside slight declines in stocks indicates caution rather than a flight from risk. Investors did not exit the market, but mainly refocused positions ahead of the upcoming earnings season and early-year macro data.

The message from the US is clear:
there is no panic, but there is also no desire to continue chasing prices.

Israel: Clear Outperformance and Strong Entry into 2026

The Tel Aviv Stock Exchange was one of the strong stories of the week.
The TA-35 index rose by about 3.33%, and the TA-125 index added about 3.57% – a sharp gap compared to most developed markets.

The increases come against the backdrop of a combination of several factors:
an improvement in local sentiment, a return of institutional investors to stock positions, and a feeling that the market is pricing negative scenarios more cautiously than before.

It is important to note that the move was not narrow or isolated. The increases were recorded in a reasonable market breadth, with participation from key sectors such as financials, infrastructure and energy. Trading volumes improved, which strengthens the credibility of the move and does not indicate a mere “technical jump.”

Israel enters 2026 from a position of relative strength, at least in the short term.

Europe: Moderate but consistent increases

Europe continued to demonstrate relative stability, with broad-based increases in almost all major indices:
the British FTSE 100 rose by about 0.82%,
the German DAX added about 0.73%, and
the French CAC 40 rose by about 0.83%.

The IEUR index, which represents broad exposure to Europe, also rose by about 0.89%, a figure that illustrates that the move is not specific to just one country.

Sentiment in Europe is being affected by two opposing forces: on the one hand, a continuing economic slowdown in some countries; on the other, relatively conservative pricing and investors’ preference for defensive sectors and exporters that benefit from a less volatile global environment.

Europe is not taking off, but it is not breaking down either – and that is exactly what the market is pricing.

Asia: Sharp disparities between countries

Asia saw a more mixed picture.
In China, the SSE Composite Index rose by only 0.11% – a symbolic increase that mainly indicates stability rather than a sharp change in direction.

In contrast, South Korea stood out:
the KOSPI index jumped 3.93%, one of the strongest performers in global markets this week. The rise reflects a return to demand for technology and industrial stocks, along with cautious optimism about exports and supply chains.

In Hong Kong, the Hang Seng Index rose by about 1.58%, continuing a positive correction after a prolonged period of weakness.

Japan was the exception:
the Nikkei 225 index fell by 0.44%, in line with the weakening of the Japanese yen. The yen index (JXY) fell by 0.33%, weighing on the local stock market and raising questions about monetary policy and continued market support.

Crypto: A Controlled Return to Risk

The crypto market opened 2026 on a positive note.
Bitcoin rose by about 2.4% during the week and is trading around $90,000.

The move does not appear to be particularly speculative, but more like a continuation of the gradual entry of investors seeking exposure to alternative assets, mainly against the backdrop of an interest rate environment that is expected to be less restrictive later this year.

The fact that Bitcoin and the dollar strengthened at the same time indicates a market that is trying to hedge risks from different directions, rather than a sharp shift to “risk-on.”

Looking ahead: What the market is trying to say

The overall picture is clear: The markets are not opening 2026 with euphoria, but with calculated caution.

There are no signs of systemic pressure, but there is selectivity, performance gaps between regions, and waiting for clear triggers: inflation data, interest rates, and the first financial reports of the year.

Those who are looking for a clear direction will not get it yet. Those who understand the context see a stable, but much more selective, market.