Markets were broadly positive over the month, with equities performing well across most regions.
US, Eurozone, and UK equities posted gains, supported by strength in technology, materials, and energy, while emerging markets outperformed on a weaker US dollar and strong returns in Asian technology markets.
Bond markets were mixed, with higher US and Japanese yields and better performance from eurozone government bonds, while credit delivered positive returns.
Commodity markets were strong overall, led by energy, though precious metals were volatile and sold off toward month-end.
US equities
US equities ended the month higher, with the S&P 500 gaining 1.5%. Markets rallied strongly toward month-end, briefly pushing the index above 7,000 for the first time.
Gains were driven by a narrow group of stocks, and volatility picked up at times, including a sharp one-day selloff following renewed tariff concerns.
Late in the month, the Trump Administration announced that former Fed Governor Kevin Warsh would succeed Jerome Powell as Chair of the Federal Reserve.
Eurozone equities
Eurozone equities delivered positive performance. Information technology, energy and utilities led returns.
Economic data was supportive, with Eurostat reporting eurozone GDP growth of 0.3% in the fourth quarter of 2025, ahead of expectations.
UK equities
UK equities also performed well in January, supported by strength in the basic materials sector.
Gains were underpinned by rising commodity prices and improving sentiment toward UK value stocks, with broader market performance helped by resilient corporate earnings and a stable macro backdrop.
Emerging Market equities
Emerging market equities outperformed developed markets, supported by a weaker US dollar, improved investor sentiment and strong performance in technology-focused markets such as Korea and Taiwan.
Asia equities
Asia ex-Japan equities advanced sharply.
Within the region, China posted more modest gains. India and Indonesia declined amid weak earnings, foreign outflows and, in Indonesia’s case, governance concerns and falling commodity prices.
Japanese equities continued to rise, supported by optimism around generative AI demand, which boosted technology stocks, and higher government bond yields, which benefited financials.
Global bonds
Fixed income markets were mixed.
US Treasury yields ended the month higher, and the Federal Open Market Committee left rates unchanged at 3.5%–3.75%.
Eurozone government bonds outperformed US Treasuries, while Japanese government bond yields rose sharply following a snap election announcement.
Credit markets performed well, with investment grade credit generating positive total and excess returns.
Commodities
Commodity markets were broadly strong, supported by geopolitical developments, including political change in Venezuela and rising tensions between the US and Iran.
Energy posted robust performance. Precious metals were more volatile: gold and silver extended their rally earlier in the month before selling off sharply toward month-end. Gold recorded its largest one-day decline in more than 40 years on 30 January.
Please note
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
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