Weekly Market Commentary January 26th to January 30th 2026
There were a couple of notable economic releases in the week, but the Federal Open Market Committee’s January meeting and the nomination of the next Fed chair dominated the news for the week.
The ADP Employment Change for the period ending January 3, 2026 showed a 4-week average of 7.8k per week, slightly below the previous period and the third consecutive weekly decline, signaling a gradual loss of momentum in private sector hiring.
The most anticipated news was provided on Wednesday as the Federal Open Market Committee (FOMC) held their January meeting. Overall, there was “broad support” to keep the target range unchanged at 3.50%-3.75% as expected. There were only minor statement changes from the previous meeting, while Chair Powell characterized current policy as plausibly neutral. The FOMC appears to be on the sidelines with cuts for now unless inflation or employment data decline meaningfully over the coming months. Current probabilities show the next cut in June.
Fresh inflation data in the form of core (ex-food and energy) producer price inflation (PPI) for December was released on Friday and came in hotter than expected, rising 0.7% above the 0.2% estimate and the largest gain since July. Year-over-year, the increase was 3.3%, above the 2.9% estimate.
Closing out the week was the President’s nomination of Kevin Warsh to be the next Fed Chair. Markets reacted well to the news with rates little changed as he was viewed as a relatively safe choice.
Equity markets started the week with low volatility and positive returns, closing at a new all-time high on Tuesday. However, after Microsoft reported earnings after the market closed on Wednesday, investors’ concerns regarding AI spending came back into view with software stocks under pressure for the day as the sub industry closed in a bear market on Thursday. Friday continued the decline for a third straight day, as well as sharp declines in gold (down 9%) and silver (down 28%). The S&P 500 closed the week and month at 6,939 and a YTD gain of 1.4%.
U.S. Treasury yields were mostly unchanged, with the 2-Year closing at 3.52% and the 10-Year closing at 4.22%, resulting in the 2/10 spread of 70bps.
Next week is full of important economic data that investors will be watching, including the January reports for non-farm payroll and the institute for supply management reports for manufacturing and services data.
