18 January 2026
Week in Review: Global Markets Mixed as Resources Rally
Global equity markets delivered mixed performances over the week, with small-cap and value stocks extending their year-to-date outperformance relative to large-cap and growth-oriented shares. The start of the fourth-quarter earnings season in the US set the tone, particularly within the financial sector, where results and market reactions varied.
Several major US banks reported earnings during the week. JPMorgan Chase and Citigroup shares declined after both institutions posted lower quarterly profits, while Morgan Stanley and Goldman Sachs advanced, supported by results that broadly exceeded market expectations. Technology shares provided some support to broader markets, led by the semiconductor sector. Taiwan Semiconductor, Nvidia, Micron and peers rallied on strong earnings updates, continued AI-driven optimism, and news of a US–Taiwan trade agreement committing approximately USD 250 billion toward US-based semiconductor manufacturing.
Outside of precious metals, markets were notably calm despite heightened political uncertainty in the United States. Late Sunday, news emerged that Federal Reserve Chair Jerome Powell was under investigation by the US Department of Justice regarding testimony on cost overruns related to the Federal Reserve’s headquarters renovation. Powell pushed back strongly, characterising the investigation as politically motivated amid renewed pressure from President Donald Trump to accelerate interest rate cuts and challenge central bank independence. Market reaction, however, remained muted.
On the macroeconomic front, US inflation data surprised modestly to the downside. Core CPI rose 0.2% month-on-month and 2.6% year-on-year in December, below consensus expectations. Headline CPI increased 0.3% month-on-month and remained steady at 2.7% year-on-year, easing concerns that prior methodological adjustments would lead to a renewed acceleration in inflation.
For the week, US equity indices ended lower, with the S&P 500 down 0.4%, the Dow Jones Industrial Average declining 0.3%, and the Nasdaq Composite falling 0.7%.
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Market Moves of the Week
The South African rand weakened modestly on Friday, as market participants positioned ahead of next week’s inflation release, which is expected to provide further insight into the health of Africa’s most industrialised economy and the South African Reserve Bank’s (SARB) interest rate trajectory for the year ahead.
Inflation eased for the first time in three months in November, slowing to 3.5% year-on-year and remaining comfortably within the SARB’s 3% target band. At its most recent policy meeting, the central bank cut the repo rate by 25 basis points to 6.75% in a unanimous decision, noting that an improved inflation outlook had created scope for a less restrictive policy stance.
Looking ahead, a further rate cut at the end of January is increasingly likely, supported by subdued inflation dynamics and the continued resilience of the rand amid a weaker US dollar. A further 25 basis point reduction would lower the repo rate to 6.50%, bringing the prime lending rate down to 10%. Such a move would provide additional relief to indebted consumers and enhance the domestic economy’s resilience against ongoing global uncertainty.
Equity markets responded positively over the week. The FTSE/JSE All Share Index advanced 1.74%, led by strong gains in resource stocks, reflecting firmer commodity prices and renewed investor appetite for mining counters.
Chart of the Week:
.Credits: Strategiq
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