Weekly Market Recap

LAST WEEK IN REVIEW

Markets navigated a turbulent week dominated by geopolitical tensions and tariff uncertainty, with major indices posting modest losses for the second consecutive week. The S&P 500 declined 0.5% to close at 6,915.61, while the Dow Jones Industrial Average fell 0.6% to 49,098.71. The Nasdaq Composite outperformed slightly, adding 0.2% as technology strength provided some support.

The week's volatility stemmed primarily from President Trump's escalating rhetoric around Greenland and tariff threats targeting European NATO allies. Early week losses were particularly sharp, with all three major indices experiencing their worst single-day performance since October. However, markets recovered midweek after the administration announced a framework agreement and backed away from immediate tariff implementation.

Sector performance was mixed. Energy led gains supported by geopolitical tensions pushing crude oil prices higher, while small-cap stocks underperformed with the Russell 2000 falling 1.8% on Friday alone. Within technology, semiconductor names showed divergence—Nvidia rose 1.5% on reports that Chinese officials may allow domestic firms to prepare orders for its H200 AI chips, while Intel plunged 17% following disappointing forward guidance.

Gold rose to another record, signaling nervousness in the market, while the U.S. dollar weakened against major currencies including the yen and euro. These safe-haven flows reflected elevated uncertainty despite the equity market's relative resilience.

Earnings season began in earnest with notable results. Netflix disappointed investors with underwhelming first-quarter guidance despite beating fourth-quarter expectations. The streaming giant's shares declined as margin concerns and subscriber growth questions emerged.

Economic data offered a mixed picture. Consumer sentiment improved in January, with the University of Michigan index rising above expectations to reflect easing near-term inflation concerns. However, preliminary PMI data pointed to modest cooling in both services and manufacturing activity.

THE WEEK AHEAD

This week represents one of the most critical periods of the earnings season, with four of the Magnificent Seven companies reporting results and the Federal Reserve holding its first policy meeting of 2026.

Key Earnings Reports:

• Wednesday, January 29: Meta Platforms, Microsoft, and Tesla

• Thursday, January 30: Apple

These four megacap technology companies alone represent more than a third of the S&P 500's market capitalization, with Apple accounting for roughly 7% of the index. Their performance will significantly influence broader market direction. Notably, several of these names have experienced meaningful pullbacks from recent highs, which may provide room for positive surprises if results exceed tempered expectations.

Beyond the megacaps, over 90 S&P 500 companies are scheduled to report quarterly results this week, providing a comprehensive view of corporate health heading into 2026.

Federal Reserve Meeting: The Federal Open Market Committee concludes its two-day policy meeting on Wednesday, January 29. Markets widely expect the Fed to hold rates steady in the 3.50%-3.75% range. The focus will be on Chairman Powell's press conference commentary regarding the economic outlook and the timing of potential future rate adjustments. Investors will also monitor the vote count for dissents, particularly given recent questions about Fed independence from political pressures.

Economic Data Releases: Several important reports are scheduled:

• Monday: Dallas Fed Manufacturing Survey

• Tuesday: Consumer Confidence, New Home Sales, Richmond Fed Manufacturing Index

• Wednesday: Advance Durable Goods Orders

• Thursday: First estimate of Q4 GDP, Personal Income and PCE Price Index (the Fed's preferred inflation gauge), Initial Jobless Claims

The GDP report will be particularly significant as it provides the first comprehensive look at economic growth in the final quarter of 2025. The PCE data will offer updated inflation readings that could influence Fed policy expectations.

What We're Watching: Market breadth has been encouraging, with participation broadening beyond the megacap technology names that dominated 2025. The equal-weight S&P 500 has outperformed the market-cap weighted index year-to-date, gaining over 4% as energy, materials, and other cyclical sectors have led. Small-cap stocks have also shown strength, with the Russell 2000 rallying more than 7% in 2026 to new records.

However, geopolitical risks remain elevated, and policy uncertainty continues to generate volatility. We continue to emphasize the importance of maintaining discipline, adhering to long-term investment plans, and avoiding reactionary decisions based on short-term headlines.

As always, we remain focused on your individual financial goals and maintaining appropriately diversified portfolios positioned for various market environments.

Please don't hesitate to reach out with any questions or concerns.

Weekly Market Recap Link

 Disclosures This material is for informational purposes only and is not investment advice or a recommendation to buy or sell any security. Past performance is not indicative of future results. Investing involves risk, including loss of principal. Asset allocation and diversification do not ensure a profit or protect against loss. Please review your specific circumstances with us before making any changes to your portfolio.