Issue #4 | Markets See First Signs of Volatility in 2026

ASX - ASX this week, Top 3 Winners & Losers
Deals Down Under - Ausgrid $3bn sale of Plus Es
Global Markets - US Markets move ahead of the Fed
Other News - Aussie Politics, Sport, Culture and more

While the ASX finished January up 1.8%, the sharemarket couldn’t maintain its momentum late into the week. Friday’s sharp fall was led by gold miner declines after markets reacted to Trump’s endorsement of the next Federal Reserve Chair.

After reaching record highs earlier this month, gold prices fell 5% to around $US5200 an ounce falling from highs this year at $US5300. The fall in gold prices triggered profit-taking across the market. Despite the late sell-off, January closed positively, though volatility is beginning to creep back into markets as global macro and US policy expectations drive investor sentiment.

ASX Movers by the Numbers:

The week’s best performers on the ASX 200 include:

In contrast, the worst performers on the ASX 200:

Ausgrid has announced the sale of its energy services and smart-metering arm, Plus ES, with a price tag of $3bn. If sold, the transaction would rank among the largest Australia infrastructure related sales in recent years, as Ausgrid test the market for the country's largest smart meter operator.

Plus Es holds 36% of the Australian smart meter market, installing, maintaining and managing smart meters for homes and businesses to provide near real-time energy data, enabling lower bills, solar monitoring, and faster fault detection.

Investors are attracted to Plus Es’ predictable yet growing cash flows, with FY25 results realising $150m in earnings marking 25% in growth over the past 5 years. Outside of performance, opportunities remain intact, with Plus Es expecting to add another 1 million smart meters to its existing base of 1.6 million in the next 5 years.

For Ausgrid which is primarily owned by the NSW government (49.6% stake) alongside private investors it signals an exit at a point to recycle capital at a time where market confidence is increasingly high. Amidst years of suppressed activity, the infrastructure industry is expecting 2026 to mark a return of large-scale asset sales, Plus Es potentially being the first of the year.

US stocks rallied at the start of the week ahead of the Federal Reserve’s January meeting. Despite a 97% probability that interest rates would be left unchanged, US stocks moved higher due to the growing confidence that the next move in US interest rates will be down, not up. The rally was also supported by the upcoming US earnings season, which occurs quarterly and remains a key driver of market sentiment.

Despite confirmation, markets continued to move ahead before the meeting, trading on probabilities rather than formal announcements. Investors appear focused less on what the Fed did this week and more on what it may be forced to do later in the year.

While the Fed ultimately left rates unchanged (as expected), uncertainty around future monetary policy has intensified with scrutiny over the Fed’s independence. President Trump has publicly pressured the Federal Reserve to cut rates, while Chair Jerome Powell has resisted such demands in an effort to preserve the Fed’s long-standing commitment to policy independence. Trump has endorsed Kevin Warsh, a former governor of the Fed to be Powell’s successor when his term ends in May, adding further uncertainty to the Fed and US politics.

For Australians, rate changes in the US remain highly relevant. US interest rate expectations are heavily reflected into the ASX and investor sentiment, especially in Australian superannuation funds due to their significant exposure in US stocks. As uncertainty around US monetary policy persists, both Australian markets and the RBA will be watching closely.

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