January had its volatile moments, but all major equity indexes ended in the positive. Will the January Barometer be a reliable measure of success for the year?
Monday
S&P 500 0.50% | NASDAQ 0.43%
Major equity indexes surged on Monday as Durable goods orders blew out expectations. Q4 GDP estimates are also strengthening above 5% (last seen in Q3 of 2023). Precious metals ended historically higher which doesn’t reflect a buy recommendation in portfolios but shows trends on the day.
Tuesday
S&P 500 0.41% | NASDAQ 0.91%
The Federal Reserve began their two-day meeting to discuss economic strength and interest-rate policy. Markets are anticipating a stable rate environment for the foreseeable future. Equities benefited on the day as the S&P500 closed as its all-time high.
Wednesday
S&P 500 0.01% | NASDAQ 0.17%
The Federal Funds Rate remained unchanged at 3.75% and so did markets. The tone was one of being on a solid footing starting off the year. Corporate earnings continue to roll in and may continue a positive path. There is no guarantee of future performance, but several core economic indicators make a good case.
Thursday
S&P 500 0.13% | NASDAQ 0.72%
Markets shifted to digesting company data and profits on Thursday. There was also an early deal endorsed by the President that would avoid drawn out negotiations on funding the government. The bill came with specific conditions for appropriation and other extensions, but markets went lower through the close.
Friday
S&P 500 0.43% | NASDAQ 0.94%
Growth stocks fell to close out the week. News revolved around the nomination of the next Federal Reserve Chairman, Kevin Warsh. While his policy may change from current leadership, there is expectations that he may maintain a hawkish stance, if appointed.
Conclusion
S&P 500 0.34% | NASDAQ 0.17%
January is now in the books providing a good start to 2026. In past decades, the first month can speak to market sentiment as the year moves along. This year may provide some headwinds leaving forecasts cautiously optimistic. Past trends are not as predictive but can assist in forecasting strength in the near term. This year markets will experience a change at the Federal Reserve as well as mid-term elections. Neither provide a particular catalyst for a market pattern but it will be important to note. The S&P500 was up 1.17% with the Nasdaq slightly below but higher, at .95%, for the month of January. The Dow Jones rose higher for the month by 1.71%, shifting trends from last year’s growth dominance. If the “January Barometer” is any indicator, markets are starting off on the right foot for the year. One key focus will be interest rate policy and growth opportunities as we move into the 2nd quarter.
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