Global markets began 2026 with a mixed performance across regions as investors balanced optimism for the new year with lingering macroeconomic and geopolitical uncertainties. Thin liquidity due to holiday closures in key European and Asian exchanges shaped trading patterns on January 1, while Tel Aviv saw broad-based gains. As trading resumes fully on January 2, investors will watch for liquidity restoration, sector rotation, and early-year signals from global economic data.

Americas: U.S. and Latin America Start 2026 Cautiously

U.S. equities faced declines on the first trading day of the year, reflecting investor caution amid low-volume trading. The S&P 500 slipped 0.74% to 6,845.50, while the Dow Jones Industrial Average fell 0.63% to 48,063.29. The Nasdaq Composite declined 0.76% to 23,241.99, with the Russell 2000 small-cap index down 0.75% to 2,481.91. Canada’s S&P/TSX Composite also retreated 0.48% to 31,712.76. In contrast, Brazil’s IBOVESPA rose 0.40% to 161,125.38, buoyed by commodity-related sectors. Market volatility remained muted, with the VIX steady at 14.95, while the US Dollar Index edged down 0.12% to 98.20, reflecting modest risk appetite among investors at the start of 2026.

Europe: Holiday-Thinned Markets See Mixed Activity

European trading was constrained by public holidays in multiple countries, including Bulgaria, Hungary, Malta, Montenegro, Romania, Russia, Serbia, Slovenia, and Switzerland. Among active markets, the EURO STOXX 50 advanced 0.69% to 5,791.41, and Germany’s DAX rose 0.57% to 24,490.41. The FTSE 100 declined 0.09% to 9,931.38, and broader indices like the Euronext 100 and MSCI Europe were slightly down, reflecting uneven sector performance. Currency movements were minimal, with the Euro Index slipping 0.02% and the British Pound Index up 0.06%. The overall tone was cautious, with investors awaiting clearer macroeconomic signals as European liquidity normalizes on January 2.

Asia: Gains Lead Global Markets Amid Holiday Closures

Asian markets delivered strong gains despite key holiday closures. The Hang Seng jumped 2.18% to 26,189.79, KOSPI climbed 1.54% to 4,279.23, and India’s S&P BSE SENSEX increased 0.46% to 85,579.44. Australia’s S&P/ASX 200 inched up 0.16% to 8,728.20, and the SSE Composite rose 0.09% to 3,968.84. Japan’s Tokyo Stock Exchange remained closed, as did the Shenzhen Stock Exchange, Kazakhstan, and Thailand exchanges, limiting regional volume. Investor focus remained on early-year economic signals, AI and tech sector performance, and recovery trends from the 2025 year-end.

Tel Aviv: Strong Start as Domestic Indices Surge

The Tel Aviv Stock Exchange started 2026 with broad-based gains across its major indices. The TA-35 increased 1.76% to 3,695.29, the TA-90 climbed 2.40% to 3,899.78, and the TA-90 Banks index rose 2.85% to 4,023.82. Sector-focused indices such as the TA-125 and TA-125 Value also saw strong gains of 1.90% and 2.01%, respectively. Equity turnover exceeded 2.95 billion NIS, while bond market activity remained solid, with the All-Bond General Index up 0.11% to 421.28 and short-term bond indices rising modestly. Investor optimism was supported by sector rotation and expectations of continued macro stability in early 2026.

Outlook: Key Market Drivers for January 2, 2026

As markets return to full liquidity on January 2, global investors will monitor early-year macroeconomic data, corporate guidance, and central bank commentary. U.S. equities may respond to economic indicators and earnings previews, while European and Asian markets will adjust as holiday-thinned volumes normalize. Tel Aviv’s strong opening could face testing against international flows, with currency movements, sector rotation, and risk sentiment influencing performance. Key risks include volatility in technology and commodity sectors, geopolitical developments, and shifts in interest rate expectations, while opportunities may emerge in high-momentum equities and defensive sectors in early 2026.