European stock futures fell, as U.S. futures declined after Fed Chair Jerome Powell said the Department of Justice had subpoenaed the Federal Reserve on Friday and threatened a criminal indictment against him over cost overruns at the agency's headquarters. In a statement late Sunday, Powell said the accusations that he misled Congress over the cost of the renovations were a pretext for President Donald Trump to pressure the Fed to cut interest rates, and that the investigation threatens the Fed's independence. Earnings season is also set to start this week, with quarterly reports expected from big U.S. banks such as Goldman Sachs, JPMorgan Chase, Bank of America and Morgan Stanley. The criminal investigation into Federal Reserve Chair Jerome Powell isn’t ultimately about the Fed’s headquarters, or Powell, or even interest rates. It’s about power. President Trump intends to take control of the central bank, no matter what the law or the courts say. In that sense, the investigation is also a message to whoever succeeds Powell, likely either Trump adviser Kevin Hassett or former Fed governor Kevin Warsh. Both claim they will be independent. But if either sets interest rates contrary to Trump’s desires, they can expect the same treatment as Powell. That’s a powerful incentive to stay in line.

On Friday, the SMI gained 0.5 percent to 13,422 points. Cyclical stocks were in demand, led by Amrize shares, which rose 3.1 percent. Kühne + Nagel gained 1.7 percent and Sika 1.5 percent. Among the index heavyweights, Nestlé added 1.4 percent. Shares in the food company had been sold off in recent days after Nestlé recalled baby food that may have been contaminated with bacteria. The share prices of pharmaceutical giants Novartis (+0.3%) and Roche (+0.4%) were slightly firmer. Logitech, which had recorded a sharp drop in its share price on Thursday, recovered by 1.3 percent. Support also came from Taiwanese chip manufacturer TSMC, which had presented strong figures for the fourth quarter. Shares in SMI insurers came under pressure. Swiss Life, Swiss Re, and Zurich lost up to 2 percent.

Europe
European stock markets closed on a positive note on Friday. The Stoxx Europe 600 index gained 1% to 609.7 points. In Paris, SBF 120 and CAC 40 each climbed 1.4%. The Paris stock market's flagship index set a new record, closing at 8,362.09 points. In Frankfurt, the DAX 40 rose 0.5%, while the FTSE 100 added 0.8% in London. L'OREAL (+6.3% to €385.85): UBS raised its recommendation on the cosmetics group's stock from “neutral” to “buy” and increased its target price from €367 to €430. For the first time in more than two years, L'Oréal shares are benefiting from a rare combination of upward catalysts, UBS notes. BNP PARIBAS (+5.7% to €87.20): On Friday, JPMorgan upgraded its recommendation on the bank's stock from “neutral” to “overweight” and increased its target price from €89 to €102.

United States
Investors opened 2026 feeling optimistic about the economy, lifting both the S&P 500 and the Dow Jones Industrial Average to fresh records in the first full week of the new year. The Nasdaq composite advanced 1.9%. Friday’s jobs report, which showed the U.S. added fewer jobs than expected in December, wasn’t enough to weaken confidence that this year will be better than the last. The economy is growing at a healthy clip, and consumer sentiment is inching higher, according to a preliminary University of Michigan survey. On Friday, the S&P rose 0.6% to close at its second all-time high of 2026. The Dow added 238 points, or 0.5%, closing at a record for the third time this year. The tech-heavy Nasdaq rose 0.8%. The Russell 2000 index of small-cap stocks jumped 0.8% Friday and 4.6% for the week, signalling that Wall Street’s “rotation trade” is in full swing. Driven by economic optimism and fears of an artificial-intelligence bubble, investors are increasingly trimming their exposure to the tech sector’s heavyweights and adding other stocks that also thrive in a growing economy. Some investors remain cautious about the implications of a Supreme Court ruling on President Trump’s sweeping tariffs. Shares of Intel jumped 11% after President Trump said late Thursday he had “just finished a great meeting” with Chief Executive Officer Lip-Bu Tan. The U.S. government has said it would convert around $9 billion in federal grants into a 10% equity stake in the chip maker.

Asia
In Asia, major indexes broadly closed with gains on Monday. The Japanese stock market is closed for Coming of Age day on Monday. Japanese shares ended sharply higher on Friday. Elsewhere in Asia, South Korea and Taiwan are up 1.3 and 1.0 percent, respectively. China, Hong Kong, Singapore, Malaysia and Indonesia are higher by between 0.3 and 0.5 percent each. The Australian stock market is notably higher on Monday with the benchmark S&P/ASX 200 Index gaining 55.40 points or 0.64 percent to 8,773.20. Among tech stocks, Afterpay owner Blockis is advancing more than 3 percent, Zip is surging by almost 6 percent and WiseTech Global is gaining almost 1 percent, while Appen is losing more than 2 percent.

Bonds
Long-dated U.S. government debt yields slipped on Friday. The 10-year Treasury note yield declined by 1 basis point to 4.17%. Long-dated Treasury yields lost ground after the reported down-tick in the unemployment rate, but finished the week mixed as traders awaited a Supreme Court ruling on tariffs. According to the CME Group's FedWatch Tool, investors are now betting on a 95.0% chance of the U.S. Federal Reserve keeping interest rates unchanged at its upcoming January 27-28 meeting.

Analysis
UBS raises Galderma to 200 (190) CHF - Buy
Berenberg lifts Holcim to 70 (60) CHF - Hold

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