Weekly Market Recap – January 5, 2026

Markets had a year of low lows and high highs, as two competing dynamics drove asset returns: tariffs and AI. In April, tariffs knocked down expectations for global growth, triggering a bond rally overseas and a stock selloff worldwide. Abroad, the disinflationary shock opened the door for central bank easing in Europe, the UK and Canada. Governments also responded with fiscal stimulus to alleviate short-term pain and strengthen long-term self-sufficiency. Looser monetary and fiscal policy, along with trade deals, drove international equity markets and bond yields higher.