Global Markets Rally with Record Highs as CPI Data Looms

Global financial markets showed broad strength on Monday and Tuesday, 12-13 January, with Asian and U.S. equities climbing toward new highs while traders positioned themselves ahead of key U.S. inflation data later this week. Recent geopolitical and macroeconomic developments also influenced investor sentiment across asset classes.

Let’s dive deeper into the latest market shifts:

TL;DR

• Global stocks surged with Japan’s Nikkei and U.S. indices hitting record highs. 

• Gold prices rose as traders sought safety amid news of a probe into Fed Chair Powell.

• Investors are now eyeing U.S. CPI inflation data and the upcoming earnings season for further market direction.

Key developments

Asian and U.S. equities gain ground

On Monday, U.S. stock markets continued their bullish momentum record into the year, with the Dow Jones Industrial Average closing above 49,000 recently, while the S&P 500 and Nasdaq 100 reached new all‑time highs as well, reflecting ongoing demand for equities.

However, ahead of the open on Tuesday, U.S. stock futures showed a slight retreat following gains on Monday, with major names like Nvidia, Tesla, and Walmart highlighted as key movers by market data. Investors remain focused on the upcoming U.S. Consumer Price Index (CPI) report for December, which is expected to influence expectations for Federal Reserve policy.

On Tuesday, Japan’s Nikkei 225 index surged to an all‑time high, driven by strong gains in tech and auto stocks alongside speculation of early elections expected to support fiscal stimulus plans. The broader Topix index also reached new record levels. Asian shares broadly climbed, with the MSCI Asia‑Pacific index marking strong performance, underpinned by optimism around AI‑led growth and supportive macro narratives. (Source: Reuters)

Safe‑haven demand pushes gold pricing higher

Gold and silver prices surged significantly on Monday, bolstered by heightened uncertainty following news of a criminal investigation into Federal Reserve Chair Jerome Powell. The probe and concerns about central bank independence have encouraged safe‑haven asset demand in the precious metals market.

Indian equity markets show mixed signals

In India, equity performance was mixed as the benchmark Sensex briefly rebounded after breaking a recent losing streak before later pulling back amid sector‑specific weakness in FMCG and IT names. Domestic markets reflected global risk sentiment while reacting to both local and external drivers.

Additional context

Global macro backdrop

After a strong end to 2025, equity markets entered 2026 with a persistent “risk‑on” tilt, driven by fiscal stimulus expectations, stabilising inflation trends, and an expanding role for AI‑related investment themes. However, geopolitical pressures and structural market dynamics remain key considerations for traders.

Broader economic outlook

Economists forecast moderate global growth in 2026, with advanced economies facing slowing momentum while emerging markets show relative resilience. Inflation trajectories and central bank policy direction, especially in the U.S., Europe, and Asia, are likely to remain influential for markets in the near term.

What investors are watching next

• U.S. CPI inflation report: Traders are bracing for headline and core inflation data later this week, with implications for interest rate expectations and equity valuations.

• Earnings season: Major U.S. banks are set to kick off the Q4 2025 earnings cycle, offering fresh insights into corporate performance under evolving macro conditions.

• Safe‑haven trends: Continued flows into gold and other risk‑off assets could intensify if uncertainty around central bank leadership or geopolitical tensions persists.

Conclusion

Markets began the week on a strong note, fuelled by record equity performances in Japan and the U.S., along with a rebound in gold prices amid rising uncertainty. Traders may now be eying the U.S. CPI release, which may redefine market expectations for the Federal Reserve’s policy trajectory. Until then, traders remain sensitive to earnings results, macro signals, and geopolitical risks influencing short‑term sentiment.

*Past performance does not reflect future results. The above is for marketing and general informational purposes only, and are only projections and should not be taken as investment research, investment advice or a personal recommendation.