INSIGHT WEEKLY: January 25, 2026
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🌐 Markets Overview
📈 Markets get nervous about tariffs
The good start to the year was set back this week by a familiar topic - tariffs. Greenland and tense meetings at Davos looked ominous, and the market has not fully recovered because there are still tensions. As stock markets fell, gold rose 8.5% in the week.
The latest risk is the possibility of 100% tariffs on Canada, if it concludes a trade deal with China.
With conversations about a changing world order, the outlook could be a slow moving change.
What about 2026?
This is the short list I am watching. It is not a prediction set. It is a map of the debates that are likely to matter for markets this year.
1. AI diffusion beyond software
The next leg is more about deployment. That means upgrades in hardware, devices, networks, industrial workflows, and “edge” compute, with knock-on effects for capex, productivity narratives, and sector leadership. This could be the start of corporates implementing AI to improve productivity.
2. The Fed’s baseline is cautious, and the committee is split
The Fed’s median projection still implies just one additional cut in 2026, with the median end-2026 policy rate around 3.4%. The Federal Reserve target range is 3.50% to 3.75% currently.
3. Credit spreads are tight, and AI capex may mean more bond supply
Corporate bond investors are currently earning only a small extra yield over government bonds, which means there is less cushion if the cycle turns. At the same time, bond issuance is expected to rise in 2026, partly to fund big AI and data-center buildouts by the large cloud firms. More supply does not automatically push yields higher, but it does mean demand has to stay strong to absorb it.
4. Hyperscaler capex is still accelerating, and scrutiny will move from “spend” to “returns”
Multiple analysts now peg 2026 capex for the big hyperscalers above $600bn, with a large share linked to AI infrastructure. The market’s next question is not whether spending continues. It is whether revenue and productivity gains show up fast enough to justify the pace and the financing mix.
5. The dollar outlook is for a weaker first half, then a rebound
Morgan Stanley expects the dollar index (DXY) to weaken into mid-2026, then recover later in the year, mainly driven by relative growth and interest-rate differences. If that happens, it matters for commodities, how US multinationals report overseas profits, and the relative performance of markets outside the US.
6. Gold remains the market’s clearest “policy and uncertainty” hedge
Gold is already close to $5,000/oz after a sharp run-up. Some banks are still publishing lower average-2026 forecasts like Deutsche Bank’s $4,450, which implicitly allows for pullbacks during the year, while others have moved their end-2026 targets higher. Goldman, for example, now sees $5,400 by 2026 end.
Wild cards that can override the base case
Geopolitics and trade policy that hit supply chains. Fiscal decisions that change the inflation and rates mix. Energy and power constraints that slow data-center buildouts. These are the areas where markets can move quickly even if the “main” forecasts stay steady.
Tech Stocks Performance
Big tech and semis. The story is dispersion, and it is indicating where the market’s confidence sits.
The market is separating business models.
1) Mega-cap is being treated as mature.
Within the Mag 7, there are winners that are still tied to clear monetisation engines, and laggards where the narrative is more “cycle” than “cashflow.” Apple is the obvious example.
2) The AI buildout is still the cleaner trade, but it is narrowing to specific bottlenecks.
Semis are where the momentum is, especially into the parts of the stack that look capacity-constrained. Memory has become a bottleneck trade again because AI training and inference are not just about GPUs. That is why Micron’s stock price has outperformed.
3) Equipment and foundry exposure is getting pulled up by the capex narrative.
ASML’s strength fits the same pattern. If you believe the buildout continues, the tooling that enables leading-edge capacity stays in demand. The market is still comfortable underwriting the multi-year cycle.
4) Volatility is rising where the story is “turnaround” or “expectations.”
Intel is the clean example of a high-beta recovery trade. It can move fast in both directions because expectations are still being rebuilt. It also sits at the intersection of policy and industrial strategy, which adds another layer of headline risk.
5) Broadcom is a reminder that “AI exposure” is not a free pass.
When a stock has run hard, the market starts caring more about margins, mix, and execution than the growth headline. Broadcom’s pullback is consistent with that.
What I’m watching next
The next move is likely to come from earnings guidance rather than AI headlines or announcements.
What matters most is what the big cloud firms say about capex. How much they plan to spend on data centres and the AI buildout, and where that money is going across chips, memory, networking, and power. If capex stays strong, the infrastructure suppliers should keep benefiting. If capex guidance cools or shifts, the market will hit the most expensive AI-linked stocks first.
Macro Watch: This Week’s Economic Developments
2026 Global Market Outlook
🇺🇸 United States
Markets traded on policy, not data. Stocks fell on the Greenland tariff threat, then rebounded after the White House said the February 1 tariffs would not go ahead. But there is a new possibility of 100% tariffs on Canada.
Underneath the noise, the data stayed firm. Q3 GDP was revised up to 4.4%, and core PCE (November) rose 0.2% m/m and 2.8% y/y.
PCE is headline inflation. Core PCE excludes food and energy and is the Fed’s key metric.
🇪🇺 Eurozone and 🇬🇧 United Kingdom
Europe took the trade shock directly, but the activity surveys held up. The flash Eurozone composite PMI stayed at 51.5 and confidence improved. The UK also saw better survey momentum, with the flash composite PMI at a 21-month high, but inflation ticked up again, with December CPI at 3.4%. The UK remains in the uncomfortable zone where growth is fragile but inflation is still high enough to keep the Bank of England cautious.
🇯🇵 Japan
Japan was driven by politics and bonds. A snap election was called for February 8, alongside a pledge to cut the consumption tax on food from 8% to 0% for two years. That pushed long yields higher. The BOJ held rates at 0.75% while sounding more confident on inflation. The yen stayed volatile, and officials warned they would act against “speculative” moves.
🇨🇳 China
China’s data reinforced the same split. Strong exports and industry, weak domestic demand. Growth was reported at 5.0% for 2025 and 4.5% in Q4, but the detail was soft. Fixed asset investment shrank 3.8% over 2025, and retail sales rose only 0.9% in December. That keeps China highly sensitive to policy support and to any renewed global protectionism.
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🌐 Artificial Intelligence and Tech
This cover has been designed using assets from Freepik.com
Citi’s 4,000-person AI internal rollout Citi’s approach is basically “peer-led adoption with controls.” Instead of keeping AI inside a small specialist team, it has built a network of roughly 4,000 volunteer “champions” and “accelerators” embedded in business units. Their job is to help colleagues use approved tools for everyday work like summarising documents, drafting internal notes, and basic analysis, without turning it into a compliance headache.
Apple Reports suggests Apple is preparing a major Siri reboot, moving it closer to a chatbot that lives inside iPhone, iPad and Mac, rather than a separate feature you “go to.” Siri sits on the home screen, inside the OS, and in front of billions of daily actions. That kind of placement can change usage habits fast. The same reports also suggest Apple may lean on Google’s Gemini models in the background, which would be a pragmatic shift if true, but it is still unconfirmed by Apple.
Anthropic’s latest usage data matters because it shows how AI adoption is really happening. It is not spreading evenly across knowledge work. It is clustering into a small set of repeatable tasks. In enterprise traffic, the growth is in back-office processes like documents and routine workflow steps, because those jobs are easy to verify, easy to control, and cheap to fix when something goes wrong.
YouTube says creators will be able to make Shorts using an AI version of their own likeness. Faster production and new formats but also more synthetic content, more impersonation attempts, and more pressure on YouTube to enforce disclosure and give creators tools to control their likeness.
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Stay tuned for more insights and updates each week.