Global equities enjoyed a strong first full trading week of 2026, with most major indices ending the week higher. Investors largely looked through a growing list of geopolitical concerns, helping to push markets in the US, the UK and across Europe to record levels. In the US, small caps and value stocks showed particularly strong momentum, following several years of dominance by large, growth-focused companies (1). Despite lagging its local peers, the S&P 500 still gained +1.6% in dollar terms. Mixed policy signals from the White House also drove notable sector-level moves, particularly in defence and housebuilding. President Trump called for a surge in military spending while suggesting defence contractors should refrain from dividends and share buybacks unless production is ramped up. In housing, he outlined plans to restrict institutional purchases of family homes, alongside pressure on government-backed mortgage providers Fannie Mae and Freddie Mac to lower borrowing rates. Initial sharp retracements in both sectors were followed by strong rebounds as investors processed possible impacts at company level.

The MSCI Europe ex UK index advanced +2.3% in euro terms, with gains broad based and particularly strong in Germany and France. Markets were supported by a combination of solid corporate earnings and improving industrial production data from across the Continent. In the UK, the FTSE 100 and FTSE 250 rose by +1.7% and +2.8% respectively, with the small-cap outperformance dynamic also firmly in play. Asian markets also delivered strong returns, led by China where the Shanghai Composite surged +3.8% in renminbi terms. Optimism around the technology sector was a key driver of market direction across the region last week. In Japan, the Nikkei 225 climbed +3.2% in yen despite rising geopolitical tensions with China. Technology stocks continued to lead, with ongoing yen weakness providing an additional tailwind for the country’s export-heavy companies.

Turning to commodities, oil prices rose for a third consecutive week as traders continued to assess geopolitical risks linked to Venezuela and Iran. Brent crude advanced by +4.2% to $63.36 a barrel, marking oil’s longest run of weekly gains since early last summer. Gold matched the move seen in Brent, with the precious metal continuing to benefit from rising political uncertainty globally. The latest rally pushed prices back above the $4,500 level, with a softer US dollar providing an additional tailwind.

Sources: (1) T. Rowe Price – Global Markets Weekly Update, 09/01/2026

SJP Approved: 12/01/2026

Past performance is not indicative of future performance.

The value of an investment with Rowan Dartington may fall as well as rise. You may get back less than the amount invested.

The value of investments may fall as well as rise purely on account of exchange rate fluctuations. The information contained does not constitute investment advice. 

Full advice should be taken to evaluate the risks, consequences, and suitability of any prospective investment. Opinions provided are subject to change in the future as they may be influenced by changes in regulation or market conditions. Where the opinions of third parties are offered, these may not necessarily reflect those of Rowan Dartington.

FTSE Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies. “FTSE Russell®” is a trademark of the relevant LSE Group companies and is used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data, and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor, or endorse the content of this communication.

MSCI Source: Certain information contained herein, including without limitation text, data, graphs, charts (collectively, the “Information”) is the copyrighted, trade secret, trademarked and/or proprietary property of MSCI Inc. or its subsidiaries (collectively, “MSCI”), or MSCI’s licensors, direct or indirect suppliers or any third party involved in making or compiling any Information (collectively, with MSCI, the “Information Providers”), is provided for informational purposes only, and may not be modified, reverse-engineered, reproduced, resold or redisseminated in whole or in part, without prior written consent.

S&P & Dow Jones Source: © S&P Dow Jones LLC 2025. All rights reserved.

Rowan Dartington is a trading name of St. James’s Place Investment Management Limited which is part of St. James’s Place PLC. St. James’s Place Investment Management Limited is a member firm of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales No. 02752304 at St. James’s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom.