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A collection of the world’s most prominent leaders convened at the 2026 World Economic Forum in Davos last week. As is somewhat common these days, the assembly resulted in a few dramatic developments.
Global equity markets finished the first full week of 2026 on the front foot, posting strong gains. Performance was driven by aerospace and defence stocks amid expectations for greater US defence spending.
As 2025 ends, it’s clear that patience and discipline paid off. Despite unsettling headlines and economic concerns, markets showed unexpected resilience.
News at the beginning of the week was dominated by more US economic data, while the latter half delivered interest rate decisions from three of the world’s largest economies.
AI jitters persisted last week with Broadcom and Oracle leading the sell-off. Both companies released quarterly earnings which disappointed under the market’s microscope.
Stocks moved higher last week as the market priced in an interest rate cut from the Federal Reserve with increasing certainty.
Markets started on a positive note on Monday after another central banker within the Federal Reserve called for a December rate cut, and the dovish sentiment continued to grow throughout the week.
A sense of uncertainty continued to prevail last week, causing global stocks to suffer their worst week since April.
US stocks slipped on Thursday and finished the week flat on Friday, even though they recovered part of the earlier decline.
There were a number of positive drivers last week that helped global equities to steam ahead on the current rally.