Markets Uncertain as Geopolitics Hit Powell Probe

Markets Open Uncertain Amid Geopolitics and the Powell Probe

Stocks slow, bonds reflect uncertainty, commodities rally and crypto as an alternative safe haven

The start of the trading week for financial markets – from Monday, January 12, 2026 – showed a mixed picture, dominated by geopolitical pressures and an unexpected wave of political uncertainty in the United States. Investors are navigating concerns over monetary policy, international tensions and a general caution toward risk assets.

Equities and global markets

Major European equity indices opened the week in negative or flat territory, with the FTSE MIB, DAX and CAC 40 all slightly lower at the start of trading in the Old Continent. On Wall Street, S&P 500, Dow Jones and Nasdaq futures were weak following emerging doubts about the independence of the Federal Reserve, triggered by a criminal investigation involving Fed Chair Jerome Powell. Sentiment was further weighed down ahead of U.S. inflation data and the start of the bank earnings season.

Bonds and currencies

The bond market reacted with moderate volatility: long-term U.S. yields showed tension, reflecting a possible reassessment of rate expectations. Treasury futures still point to bets on stable or slightly lower rates, while the U.S. dollar continued to weaken amid political concerns, with the euro and Swiss franc among the best-performing currencies.

Commodities in rally

Commodities stood out: gold and silver reached new record highs, driven by safe-haven demand in a context of political and geopolitical risk. Oil also maintained a positive tone, with Brent and WTI supported by concerns over potential supply disruptions, particularly linked to tensions in Iran and prospects for a reshaping of Venezuelan exports following U.S. intervention in the country.

₿ Crypto: an alternative safe haven

Cryptocurrencies showed decent resilience: Bitcoin and Ethereum edged higher despite risk aversion in traditional markets, suggesting that some investors are treating digital assets as potential hedges against macroeconomic uncertainty.

Geopolitical backdrop

Geopolitical factors are playing an increasingly central role in asset allocation:

• Ukraine continues to represent a key risk driver for European and energy markets.
• Iran is at the center of tensions due to potential internal unrest and international pressure on energy routes.
• Venezuela, following U.S. intervention, remains in the spotlight for possible impacts on oil flows.
• The U.S. “threat” toward Greenland has raised perceptions of unusual political instability in transatlantic relations, pushing flows toward defensive assets.
• Domestically, the investigation into Jerome Powell has sparked deep reflections on monetary governance, with potentially lasting effects on global risk and capital costs.

Multi-asset ETFs: concrete tools for a balanced portfolio

In a market phase marked by high geopolitical uncertainty and questions surrounding monetary policy, the use of well-diversified, low-cost ETFs allows investors to build robust portfolios without excessive complexity. Below are examples of instruments commonly used in a strategic allocation framework.

In this environment, a prudent yet diversification-oriented portfolio construction may rely on multi-asset ETFs combining exposure to different asset classes. Here are some global strategy ideas, taking into account moderate volatility and risk protection.

Global equities (growth engine)

For the core equity allocation, global exposure remains the most efficient choice:

• Vanguard FTSE All-World UCITS ETF (VWCE)
  Tracks over 4,000 stocks across developed and emerging markets. Ideal as a single core equity holding.
• iShares MSCI ACWI UCITS ETF (SSAC)
  An equivalent alternative with broad geographic and sector coverage.
  Indicative weight: 40–60%, depending on risk profile.

Global bonds (stability and income)

To reduce overall volatility and stabilize the portfolio:

• iShares Core Global Aggregate Bond UCITS ETF (AGGH)
  Exposure to global government and investment-grade corporate bonds, currency-hedged.
• Vanguard Global Aggregate Bond UCITS ETF Hedged (VAGF)
  Similar to AGGH, with low costs and broad diversification.
  Indicative weight: 25–40%.

Inflation and geopolitical risk protection

In the presence of tensions in energy and commodities:

• iShares Global Inflation-Linked Bond UCITS ETF (IGIL)
  Protects purchasing power in the event of renewed inflationary pressures.
• iShares Physical Gold ETC (SGLN)
  Direct exposure to physical gold, historically effective during periods of geopolitical stress.
  Indicative weight: 5–15% in total.

Commodities (real diversification)

To benefit from supply shocks and commodity cycles:

• Invesco Bloomberg Commodity UCITS ETF (CMOD)
  A broad basket diversified across energy, metals and agricultural commodities.
  Indicative weight: 5–10%.

“Ready-made” multi-asset solutions

For investors seeking a simpler, more automated approach:

• Vanguard LifeStrategy 60% Equity UCITS ETF
  A balanced equity/bond portfolio with automatic rebalancing.
• iShares Core Growth Allocation UCITS ETF (AORU)
  A dynamic multi-asset approach with passive management.
  Suitable for medium-term investors looking for simplicity and discipline.

Extra: regulated crypto exposure

Only for investors with high risk tolerance:

• 21Shares Bitcoin ETP (ABTC)
• CoinShares Physical Ethereum (ETHE)
  Suggested weight: maximum 2–5%, as a diversifying, non-core allocation.

In summary

In a context shaped by Ukraine, the Middle East, U.S. political instability and new geopolitical fractures, building a portfolio through liquid, global and well-diversified ETFs remains one of the most effective strategies to manage risk without sacrificing long-term returns.

This article is provided for informational purposes only and does not constitute financial advice, nor an offer or solicitation to invest. The assessments expressed reflect general market opinions and do not take into account individual circumstances. All investments involve risks, including the possible loss of invested capital.