Welcome back to another market update. As we move toward mid-January, markets faced a highly volatile week driven by escalating geopolitical tensions, key inflation data, labor-market signals, and major U.S. corporate earnings.
Let’s break down the most important developments:
🌍 Geopolitical Developments – Middle East in Focus
Geopolitical risk dominated market attention last week as tensions in the Middle East intensified.
* Iran experienced widespread electricity and internet shutdowns amid rising protests
* U.S. President Donald Trump issued strong warnings toward the Iranian regime
* U.S. military bases across the Middle East were placed on high alert
* U.S. Navy supercarrier USS Abraham Lincoln was deployed to the region
As a result, gold and silver surged, benefiting from increased safe-haven demand.
🇺🇸 U.S. Inflation – CPI
U.S. Consumer Price Index data came in in line with expectations:
* CPI-U rose 0.3% MoM in December 2025
* Headline inflation increased 2.7% YoY
* Core CPI (excluding food & energy) rose 0.2% MoM
* Shelter costs increased 0.4%, the largest contributor to monthly inflation
This confirms inflation is cooling gradually but remains sticky, particularly in housing.
🇺🇸 Producer Prices – PPI
* U.S. PPI for final demand increased 0.2% in November
* Prices for final demand goods rose 0.9%
* Final demand services remained unchanged
Upstream inflation pressures persist, mainly driven by goods prices.
🇺🇸 Labor Market – Jobless Claims
Initial jobless claims fell to 198,000, back below the key 200K threshold.
This reinforces the Fed’s view that the U.S. labor market remains resilient, despite broader economic uncertainty.
🇬🇧 United Kingdom – GDP
UK economic growth remained weak but positive:
* Real GDP grew 0.1% in the three months to November 2025
* Monthly GDP rose 0.3% in November
* Growth was driven by services
* Production and construction continued to contract
This highlights ongoing sectoral divergence within the UK economy.
🏦 Corporate Earnings – Q4 2025
Several major companies reported earnings last week:
* JPMorgan & Wells Fargo posted strong profits supported by resilient consumers and trading revenue
* BlackRock delivered robust results due to strong inflows and rising assets under management
* TSMC exceeded expectations as demand for advanced chips remained strong, reinforcing optimism around the AI cycle
Frequently Asked Questions
Why did markets turn volatile last week?
Markets became highly volatile due to escalating geopolitical tensions in the Middle East, combined with key U.S. economic data releases and major corporate earnings reports. Heightened uncertainty pushed investors toward safe-haven assets like gold and silver.
How did Middle East tensions impact gold and silver prices?
Rising geopolitical risk increased safe-haven demand, driving gold and silver prices higher as investors sought protection against uncertainty and potential market shocks.
What did the latest U.S. inflation data show?
U.S. CPI rose 0.3% month-over-month in December 2025 and 2.7% year-over-year, matching expectations. Core inflation increased 0.2%, with shelter costs remaining the largest contributor, indicating inflation is cooling but still sticky.
What does the jobless claims data suggest about the U.S. labor market?
Initial jobless claims fell to 198,000, remaining below the key 200,000 level. This suggests the U.S. labor market remains resilient, supporting the Federal Reserve’s cautious, data-dependent policy stance.
Why were corporate earnings important for market sentiment?
Strong earnings from major companies like JPMorgan, Wells Fargo, BlackRock, and TSMC helped support market confidence, highlighting resilient consumer activity, strong asset inflows, and continued demand in the AI-driven semiconductor sector.
