After a whirlwind year marked by a trade war, political crises, and an artificial intelligence boom, markets will be tested by the same issues in 2026.

Looking back, the first half of 2025 was notably turbulent as US President Donald Trump’s “reciprocal” tariff announcement rocked markets. The shocking reveal in April sent major stock benchmarks down. Hong Kong’s Hang Seng Index recorded its biggest one-day drop since 1997.

US recession fears and concerns over the independence of the Federal Reserve prompted dollar-selling, while a “flight to quality” pushed investors to seek out gold and high-quality sovereign bonds.

But once uncertainty surrounding Trump tariffs and their impacts eased, many stock markets staged a rebound, with some benchmarks like Japan’s Nikkei Stock Average hitting record highs. The strong AI boom also played a significant part in the recovery.

What does 2026 have in store for investors? From stocks and commodities to currencies and bonds, here are some variables to weigh as we head into a new year.

Stocks

South Korea was the winner among major global equity markets with its benchmark KOSPI leaping over 70% in 2025. The momentum picked up after President Lee Jae Myung vowed to fix the “Korea discount,” in which stocks traded lower compared with peers. His administration has moved forward with reforms, including in corporate governance, which investors have welcomed.

The AI rally also contributed to the strong performance in South Korea as well as in Hong Kong, Japan, and Taiwan.

The question is, will this AI and tech rally continue in 2026?

While some point out that AI-related investment cycles tend to be independent of macroeconomic developments, concerns have mounted about stretched equity valuations.

According to a survey of more than 500 global institutional investors by Natixis Investment Managers, the asset management arm of the French bank, 74% predict markets will undergo a correction in 2026, with the risks of a geopolitical shock and a tech bubble being the top two concerns.

Dora Seow, CEO of Natixis IM Singapore, said in a statement that the survey “indicates that even as institutional investors prepare for another spell of heightened uncertainty in 2026, they remain both optimistic and pragmatic, seeking new sources of alpha in markets such as Asia Pacific.”

Alpha refers to excess returns compared with the investment benchmark.

“Capital investment in AI will slow down around the world next year,” said Li Xiong, strategist at Daiwa Shanghai, who added that this will prompt investors to seek other areas to deploy money.

Despite such concerns, “South Korean companies are forecast to have stronger earnings growth next year, and valuations are still relatively low,” Xiong said.

In Southeast Asia, Vietnam stood out this year, rising about 40% and with the benchmark VN index hitting historic highs. The climb was supported by the country’s economy, which was among the fastest-growing in Asia. For 2026, the government has set a gross domestic product target of 10% or higher.

“The country has benefited from the China-decoupling trend,” noted Xiong, who also pointed out that Vietnam has taken advantage of the shift in global supply chains. “Traditionally, China was the world’s factory, but Vietnam is becoming its successor.”

Commodities

The price of gold soared in 2025, rising over 70%. The precious metal repeatedly recorded fresh highs and has now surpassed the USD 4,500 threshold for the first time.

Heightening geopolitical risks fueled capital inflows, most recently with tensions escalating between the US and Venezuela. Economic uncertainty and demand for haven assets boosted the price, as investors sought out the asset as a hedge against inflation as well. Investors, as well as central banks, increased their allocation.

Gold-focused exchange-traded funds (ETFs) experienced steady inflows, too, as investors looked for easier access to the yellow metal. According to the World Gold Council, physically backed gold ETFs globally registered their sixth consecutive monthly inflow, adding USD 5.2 billion in November 2025.

Looking ahead to 2026, “Gold’s appeal is likely to remain in 2026 supported by the Fed easing cycle on a sticky inflation environment,” said Alexandra Symeonidi, corporate credit analyst on William Blair’s emerging markets debt team. She added that there is also potential risk for US-China tensions to flare up again.

Silver also had a record rally in 2025, with its price up over 150% since the beginning of the year. The commodity is set to log its biggest full-year jump in recent history.

Symeonidi said that in 2026, for silver as well as platinum, “tariff concerns might ease for these metals, alleviating the tight liquidity situation as the US might attract less metal.

“Silver’s industrial demand component [was] strong in the first half of the year due to solar [Photovoltaic] production in China, but some subsidies have rolled off in the sector, creating question marks over the trajectory of demand.”

Currencies

Earlier this year, the FX market witnessed the softening of the US dollar as confidence in the superpower was dented. One of the major beneficiaries was the Taiwanese dollar, where life insurers increased their hedging ratios. The Taiwan dollar’s rise has since moderated and is up around 4% against the greenback due to capital outflows by foreign investors.

The Malaysian ringgit and Thai baht stood out in terms of their appreciation against the US dollar, both rising around 10%. On the other hand, the Indian rupee, Vietnamese dong, and Indonesian rupiah remain weaker.

“I would say that Asia currencies broadly performed more on the disappointing side,” said Joey Chew, head of Asia FX research at HSBC Global Investment Research. “None of them did all that well in the second half of 2025. This was partly because US political uncertainty retreated and the dollar stopped weakening.”

In 2026, some of the common drivers for Asian currencies, according to Chew, will be “the dollar and risk appetite.”

As concerns over the US labor market linger and related data remains “on the deterioration side,” it is likely that “the Fed will be debating about rate cuts, which should slightly undermine the dollar,” Chew said. The central bank trimmed its benchmark lending rate three times in 2025.

While a relatively supported risk appetite amid a resilient global economy could also help capital flows into Asian currencies, “some currencies that have some of their own issues might not be able to overcome them and capitalize on the dollar weakness,” she said.

Thailand continues to be in a deadly conflict with its neighbor Cambodia, while Indonesia has faced government protests and damaging cyclones.

MUFG Bank analysts, including Lin Li, head of global markets research for Asia, forecast that Asia’s FX and rates markets will move “from convergence to divergence, with greater dispersion in macro and market outcomes” driven by local factors like fiscal and monetary policies as well as domestic growth outlooks.

In a note, they listed the Korean won, Taiwan dollar, and Malaysian ringgit as some of the currencies they are positive about, as the three have “exposure to persistent AI themes, domestic structural reform stories, coupled with good macro stability.”

Bonds

Japan made a historic milestone with the Bank of Japan hiking interest rates after a long pause to 0.75%, a level not seen since 1995. The move has pushed up yields on ten-year government bonds to over 2%, the highest level in more than two decades. JGB yields recorded one of the biggest rises in the region this year.

With the US in a rate-cutting cycle, the gap between ten-year treasuries and JGBs has narrowed, albeit slightly.

BofA strategists predict JGB yields will “continue their upward trajectory through 2026, with renewed steepening pressure on the curve.”

In a note led by Shusuke Yamada, Japan’s chief FX and rates strategist, the broker noted that economic growth is projected at around 1% while wage growth will likely support inflation. In terms of supply and demand, the BOJ’s continued monetary tightening and fiscal expansion “will push net JGB supply higher, while domestic demand—primarily from pension funds—would remain insufficient to absorb the increase in supply.

“This imbalance would require engagement from price-sensitive investors, leaving the superlong end particularly exposed to upward yield pressure.”

UBS economist Masamichi Adachi visited Singapore and Hong Kong last month to meet clients, where he said discussions focused on the BOJ’s “magnitude and pace” of future hikes. Prime Minister Sanae Takaichi’s expansionary fiscal stance was also a topic, according to Adachi.

“The prevailing market view was that yen weakness and higher long-term rates would persist for the time being, given the lack of clear catalysts for yen appreciation,” he said in a note. “Many questions also centered on measures to counter rapid yen depreciation and rising rates, including the timing of FX intervention and potential BOJ responses such as emergency JGB purchases.”

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.