Global Stocks Pause as New Year Rally Broadens Beyond US – Europe Market Wrap
A pause in the New Year rally for US equities underscored a shift in leadership as gains spread beyond American megacaps and investors waited for fresh clues on the health of the world’s largest economy.
US stock futures pointed to a flat open, tempering the AI-fueled surge that marked the opening sessions of 2026. European equities edged 0.2% higher, while Asian markets extended a historic start to the year and an emerging-market index climbed to a second straight record.
Moves in commodities were mixed. Gold retreated from intraday highs to trade little changed after earlier rising as much as 0.6%. Copper gave back part of a rally that had topped 3%, silver outperformed with a 1.9% gain, and Brent crude edged up toward $62 a barrel.
So far, equity investors have largely shrugged off geopolitical frictions tied to Venezuela, staying focused on the powerful, three-year bull run driven by enthusiasm for artificial intelligence. The durability of that rally now hinges on whether incoming data — including business activity surveys and labor-market readings due this week — reinforce expectations that the Federal Reserve will move ahead with additional policy easing.
Markets outside the US have taken the lead early in the year, but confidence in American equities remains firm. A Markets Pulse survey shows investors broadly expect the S&P 500 to extend its winning streak after three consecutive years of double-digit gains — a rarity not seen since the late 1990s.
Roughly 60% of the 590 respondents surveyed in late December see the benchmark rising as much as 20% this year. Fewer than one-third anticipate declines, while only about 10% forecast gains exceeding 20%.
Technical indicators also point to potential upside. The S&P 500’s 14-day relative strength index suggests US stocks are not yet overstretched, unlike several overseas markets that have already moved into overbought territory.
In rates, Treasuries gave back part of Monday’s rally, with the 10-year yield climbing two basis points to 4.18%. Yields had fallen earlier after data showed US manufacturing contracted in December at the sharpest pace in more than a year, reinforcing the argument for further Fed easing.
