Global markets painted a bullish picture in early January 2026. Between January 5th and 11th, synchronized rallies swept across the U.S., Europe, and Asia—a sharp contrast to the cautious year-end trading we saw just days earlier. The shift? Risk appetite has roared back. AI momentum continued fueling optimism, driving equity flows into tech-heavy sectors and growth plays. But beneath the surface, two factors kept traders on their toes. The Federal Reserve's policy signals remained crucial—any hint about rate direction could reshape positioning overnight. Meanwhile, geopolitical tensions simmered in the background, a reminder that external shocks can flip sentiment quickly. Still, the broader narrative leaned bullish: thin liquidity conditions from the holidays were clearing out, and fresh capital was eager to deploy. This risk-on environment reflected growing conviction that AI tailwinds would sustain growth momentum into the new year.