focused photo of a snow flake by Aaron Burden courtesy of Unsplash.

Weekly Commentary (1/20/26) – Markets Mixed for the Week

NDS Wealth Advisors |

Weekly Commentary (1/20/26) – Markets Mixed for the Week      

Equity markets closed mixed last week as in-line inflation news and as-expected earnings failed to excite investors. 
           
For the week, the DJIA lost 0.28% while the S&P 500 gave back 0.36%.  The tech-heavy Nasdaq dropped 0.66%.  International equities bucked the trend as the MSCI EAFE Index closed higher by 1.40% while emerging market equities (MSCI EM) gained 2.27%.  Small company stocks, represented by the Russell 2000, advanced 2.05%. Fixed income, represented by the Bloomberg Aggregate, finished lower by 0.14% for the week as yields moved slightly higher.  As a result, the 10 YR US Treasury closed at a yield of 4.24% (up 6bps from the previous week’s closing yield of ~4.18%) as investors were hoping for the lower inflation numbers that might embolden the Fed to lower rates more quickly.  Gold prices closed at $4,588.40/oz – up 2.18%.  Oil prices moved up 0.54% to close at 59.44 as colder weather gripped the U.S.   
                  
Economic news released last week confirmed that inflation is having a hard time breaking towards the Fed’s 2% target (just a reminder … inflation has not been at the Fed’s 2% target for over 5 years). December headline CPI came in at 2.7% y/y, in-line with estimates.  December core CPI came in at 2.6% y/y, slightly ahead of the FactSet estimate of 2.7%.  Initial jobless claims for the week ending January 10 came in at 198,000, a sharp drop from the prior week and ahead of expectations of 215,000.        

This week will see reports on U.S. 3rd quarter GDP revision, consumer spending and consumer sentiment.  Also on tap this week will be 154 S&P 500 companies reporting earnings … expect earnings to remain fairly strong.    

A continued resilient labor market along with slightly sticky inflation will likely keep the Fed on hold until June. We expect the chaos of headline news to continue so investors should ignore the headline news and focus on the strength of the underlying economy.  Fortunately, markets have begun to broaden out with international stocks and smaller and medium sized companies beginning to outperform the broader market.  Diversification, patience and a bias towards quality will help investors navigate the days and months ahead.  

Stay safe and stay warm.