Market Commentaries   |   January 9, 2026

Global Asset Allocation Team Market Update – January 2026

Financial markets generated some mixed results in December as fears around lofty valuations saw the AI trade fizzle towards year end – while investors were also contemplating the path for global monetary policy as the synchronized easing cycle winds down. While global equity markets extended their winning streak to end 2025 at fresh record highs – bond markets edged lower on the back of lingering inflation risks and the prospect for a transition from monetary policy easing to fiscal policy expansion.

Jean-Guy Desjardins
Founder of Fiera Capital and Executive Chair of the Board
Candice Bangsund
Vice President and Portfolio Manager, Global Asset Allocation and Private Markets Solutions

Global equity markets (+0.9%) edged higher in December. The S&P 500 (-0.1%) lost some of its lustre, with technology stocks struggling as AI-related momentum stalled towards year-end. The Nasdaq was down -0.7%. The S&P/TSX (+1.1%) pushed higher thanks to solid performance in the heavyweight financials and materials sectors. Elsewhere, the MSCI EAFE (+2.9%) breached a new record – while the MSCI gauge of emerging market stocks (+2.7%) rallied after President Xi Jinping declared China is set to meet its 5% growth target for 2025.

By contrast, fixed income markets generated negative results. While the Federal Reserve cut rates by 25 basis points at the final gathering of 2025, signs of economic resilience saw traders push out their wagers for additional rate cuts to late 2026. The yield curve steepened. While the policy-sensitive two-year treasury yield was little changed at 3.47% – the ten-year yield jumped to 4.17% as lingering inflation risks pushed longer-term yields higher. In Canada, the combination of labor market strength and sticky core inflation cemented the case for the Bank of Canada to hit the sidelines. Consequently, the two-year government bond yield rose 17 basis points to 2.59% – while the ten-year yield jumped 29 basis points to 3.43%. For the month, the Bloomberg US Aggregate Bond Index declined -0.2%, while the FTSE Canada Bond Universe shed -1.3%.

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