January was a month in which geopolitics and macroeconomic developments largely dictated market performance. Major global equity indices posted positive returns, supported by solid corporate earnings and resilient economic growth.
The month was characterized by significant progress in international trade, particularly from Europe, as well as growing concerns surrounding dependence on the United States. Despite the favorable performance of equity markets, January also brought strong demand for gold and silver, pushing both metals to record highs. However, the final days of the month saw corrections across risk assets and commodities, slightly tarnishing overall market performance.
On January 30th, gold fell by approximately 11%, while silver declined nearly 27%. Despite these sharp corrections, both metals still closed the month with double-digit positive returns.
Meanwhile, Bitcoin posted a decline of nearly 13% during the month.
United States: Political Tensions, Dollar Weakness, and Mixed Labor Market Signals
The United States remained one of the primary focal points throughout the month. The formal investigation launched against Jerome Powell, Chairman of the Federal Reserve, regarding the management of certain budget allocations raised investor concerns about potential political interference in monetary policy. This episode reignited the debate surrounding the Fed’s independence and had a direct impact on bond and currency markets.
In an unexpected development that further intensified market volatility, Donald Trump announced his intention to appoint Kevin Warsh as the next Chairman of the Federal Reserve. The potential arrival of Warsh raised concerns among analysts regarding the possibility of a less orthodox monetary policy and greater political influence over the Fed’s decisions.
U.S. equities began 2026 on a positive note, supported by continued strength in the technology sector and the ongoing corporate earnings season. The S&P 500 gained approximately 1.3%, while the Nasdaq advanced around 1.2%.
Within this context, most companies belonging to the so-called “Magnificent 7” have already reported earnings, although their stock market performance has been mixed. While Amazon, Meta, Nvidia, and Alphabet delivered a very strong January performance, Apple, Tesla, and Microsoft closed the month in negative territory. Overall, however, the balance remained positive, helping sustain current index levels.
From a macroeconomic perspective, during its January 28th meeting, the Federal Reserve decided to leave interest rates unchanged, breaking the rate-cutting cycle initiated in July. Fed Chairman Jerome Powell emphasized that inflation remains “relatively elevated,” justifying a cautious approach toward monetary policy.
Regarding the labor market, the U.S. unemployment rate fell to 4.4% in December, down from 4.5% in November, while annual wage growth reached 3.8%, exceeding the market expectation of 3.6%. Additionally, the number of unemployment benefit claims declined to its lowest level in two years.
Taken together, these indicators suggest an orderly cooling of the labor market, although underlying strength remains sufficient to potentially influence the pace and scope of future monetary easing.
The U.S. dollar depreciated by approximately 1.5% against the euro, reaching its lowest level in four months and trading around 1.20 EUR/USD. This move reflects both growing domestic political uncertainty and increased capital flows toward safe-haven assets and alternative currencies.
Toward the end of the month, President Trump stated in an interview that he felt comfortable with a weaker dollar, reinforcing our view that the currency could continue depreciating toward the 1.22–1.24 range.
At Asset Growth, we began systematically hedging dollar exposure in June 2025, when the exchange rate stood around 1.14–1.15 after a sharp dollar depreciation during the first months of 2025. Although our thesis anticipated a gradual depreciation, these levels were not reached until this month.
On the political-economic front, another significant development was the Trump administration’s decision to acquire a 10% stake in the U.S. mining company USA Rare Earth in order to develop a domestic mine and build a magnet manufacturing facility. This operation aligns with the administration’s broader strategy of securing critical raw material supplies, reducing external dependencies, and strengthening national security and U.S. industrial policy — an interpretation widely shared by the market.
Europe: Diplomatic Leadership and Relative Market Stability
Europe maintained a more stable performance than the United States, supported by meaningful progress in international trade, including the agreement with Mercosur and ongoing trade negotiations with India.
These developments reinforce Europe’s strategy of diversifying trade partners in a context of increasing global fragmentation and rising American mercantilism.
The World Economic Forum in Davos once again placed Europe at the center of global economic discussions. Conversations focused on multilateral cooperation, energy transition, and supply chain resilience, with a more constructive tone than in other regions, although still influenced by geopolitical tensions originating from the United States.
From a geopolitical perspective, tensions surrounding Greenland generated concern in European markets due to the risk of deteriorating transatlantic relations.
Nevertheless, European equities slightly outperformed U.S. equities in relative terms. The Euro Stoxx 50, MSCI Europe, and Euro Stoxx 600 all posted moderate but consistent gains of approximately 3% during the month.
Asia and Global Context: Caution and Search for Stability
Asian equities started 2026 with predominantly positive performance, particularly Chinese equities. The MSCI Asia index gained close to 8% year-to-date, supported by improving investor sentiment and more favorable macroeconomic expectations.
Specifically, the MSCI China index advanced around 5%, benefiting from attractive valuations and expectations of additional policy support from Chinese authorities.
In contrast, the MSCI India index corrected approximately 5%. Despite this, the country’s structural outlook remains favorable.
During the month, India reached a free trade agreement (FTA) with the European Union, a deal considered particularly beneficial for the Indian economy as it facilitates access to one of the world’s largest markets, reduces tariff barriers, and supports key sectors such as textiles, agriculture, and jewelry.
This agreement strengthens India’s medium- and long-term growth prospects despite the short-term volatility observed in equity markets.
Portfolio Implications
The close of January highlights the importance of maintaining a prudent and diversified approach within investment portfolios.
The increase in political uncertainty in the United States, combined with geopolitical tensions and the depreciation of the dollar, reinforces the attractiveness of maintaining exposure to real and safe-haven assets such as gold, while also actively managing currency risk.
In this context, we believe 2026 may present attractive opportunities in emerging markets, consistent with the trends observed in 2025, supported by attractive valuations and a weaker dollar environment.
At the same time, we believe it is appropriate to gradually reduce overall portfolio risk levels over the coming months.
Although we maintain a cautious stance due to an environment still characterized by elevated uncertainty and demanding valuations in certain segments, equity markets continue to display remarkable resilience month after month.
This scenario leads us to maintain a selective and cautious approach, prioritizing capital preservation and diversification without entirely abandoning exposure to risk assets.