Global stock markets delivered strong returns through 2025 despite geopolitical and macro headwinds, and analysts believe key indices are well-positioned to continue outperforming in 2026. Supportive macro conditions — including expectations for additional Federal Reserve rate cuts, easing inflation expectations and weaker oil prices — may provide a strong backdrop for risk assets in the year ahead.
Among regional indices, Asia-Pacific markets led the performance for 2025, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng Index posting gains that outpaced many U.S. benchmarks. The strong showings were driven by supportive policy environments, improved liquidity, and investor rotation into Asian equities after valuation resets in earlier years.
The Dow Jones Industrial Average, which lagged behind more technology-heavy U.S. averages in 2025 due to its heavier exposure to financials and other non-tech sectors, may benefit from a broader market rotation in 2026. Lower interest rates and a potential re-steepening yield curve could boost value-oriented stocks and help the Dow catch up as leadership shifts beyond mega-cap tech.
In contrast, momentum in the Nasdaq 100 — driven by AI and large-cap technology names — may see slower relative gains if capital continues to flow toward value and cyclically-oriented sectors. Meanwhile, investors will be watching critical technical levels for key indices, such as resistance zones on the Hang Seng and support trends for the Nikkei, which have remained in major bullish structures.
Overall, the 2026 outlook reflects optimism for sustained equity gains globally, with diversified leadership potential stemming from a dovish policy environment and shifting sector dynamics.