TWD Monthly Market Update – January 2026
Broader Market Moves1
Macro Commentary
The Australian share market exhibited a generally positive tone through January, with the S&P/ASX 200 gradually climbing over the month as investors digested macroeconomic data and shifts in global sentiment. After starting the year around 8,727.80 points on 2 January , the index oscillated amid mixed sector performance before finishing higher at approximately 8,869.10 points on 30 January, representing a solid advance for the month.
Early in the month, local markets responded to domestic inflation data showing a slower than expected rise in prices of 3.4% month on month for November, supporting risk assets and lifting equities. Healthcare and technology stocks provided early leadership on some sessions, while energy and mining stocks were significant contributors later in the month as commodity prices surged. However, strength in commodities was counterbalanced by occasional weakness in technology and financial sectors, which at times weighed on broader index momentum.
As the month progressed however, further inflation readings surprised to the upside at 3.8% for December, suggesting that the Reserve Bank of Australia was likely to tighten policy in the near term. Solid labour market data, including continued employment growth and persistently low unemployment at 4.2% for December, further reinforced this view and supported confidence in the earnings outlook for domestically exposed sectors. These dynamics underpinned a market environment where rate sensitive areas such as real estate and consumer discretionary experienced mixed performance. Regional banks showed sporadic strength but also vulnerability to global sentiment swings.
Global equity markets delivered a mixed performance through January. In the United States, the S&P 500 rallied through much of the month, reaching levels near record highs before ending around 6,939.03 points on 30 January , reflecting an overall modest gain for January. This followed periods of strong early month momentum as technology and consumer sectors helped lift sentiment, although bouts of volatility, including pronounced sell-offs linked to tariff concerns and profit-taking in mega-cap names, tempered broader gains. The S&P 500’s January performance demonstrated resilience in the face of macroeconomic and geopolitical headwinds, with sector breadth showing rotation between cyclical and defensive exposures.
Commodity markets continued to be a focal point for investors in January, with significant divergence across key sub-sectors. Precious metals such as gold and silver experienced notable volatility, with gold trading near multi-year highs up to USD 5,586 per ounce in mid-January before periods of sharp price retracements as investors recalibrated expectations around interest rates with the nomination of a Federal Reserve Chair Warsh. Industrial metals, particularly copper, saw strong underlying support from structural demand drivers tied to electrification and infrastructure spending narratives, contributing to ongoing interest in materials stocks. In contrast, traditional energy commodities like crude oil experienced choppiness, balancing supply discipline from major producers against mixed demand signals from global economic data. These moves reinforced the notion that commodities remain sensitive to macro shifts, geopolitical developments, and currency fluctuations, and they exerted a meaningful influence on equity sector performance throughout January.
Looking into February and beyond, investor sentiment is likely to remain cautious but constructive. In Australia, persistent inflation and a tight labour market suggest the RBA is likely to maintain a tightening bias. This should continue to favour companies with strong fundamentals while tempering enthusiasm for more rate-sensitive sectors. Offshore, stretched valuations, geopolitical uncertainty and mixed economic data point to ongoing market volatility. In this environment, a selective focus on quality stocks with resilient earnings, strong balance sheets and exposure to supportive commodity pricing appears a prudent approach to portfolio positioning in early 2026.
1ASX 200 refers to SPDR S&P ASX 200 Fund (STW), S&P 500 refers to iShares S&P 500 (AUD Hedged) ETF, MSCI World refers to Vanguard MSCI Index International Shares (Hedged) ETF, NASDAQ 100 refers Nasdaq 100 Currency Hedged ETF, AU Comp refers to the Vanguard Australian Fixed Interest Index ETF, Global Agg refers to Vanguard Global Aggregate Bond Index (Hedged) ETF, Gold (USD) refers to the LSEG Gold Spot Price (USD)
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