Asian Stocks Face Tepid 2026 Start After Recent Drop, Despite Strong 2025

• Asian stocks are set for a cautious start to 2026, following a subdued end to 2025, despite a generally buoyant year for global equities.
• Trading is expected to be thin due to holidays in key regional markets like Japan and China, with South Korea having a delayed start.
• The S&P 500 and Nasdaq 100 experienced recent post-Christmas losses, yet both indexes achieved double-digit gains for three consecutive years.
• Global stocks recorded their strongest year since 2019, driven by earnings expectations and optimism around artificial intelligence.
• Despite recent optimism, uncertainty over US monetary policy and elevated valuations remain key risks for the market outlook.

Why It Matters: Asian markets anticipate a cautious 2026 start, contrasting a strong global equity performance in 2025.