Markets In Focus: The Week That Was and What’s On Tap Week-Ending 1/9/2026
The Week That Was
U.S. equities opened the new year on firm footing, with the S&P 500 rising 1.6% and the Nasdaq Composite gaining 1.9% in the first full trading week of 2026. The tone was constructive—supported by moderating inflation data, a resilient labor market, and growing conviction in a “soft-landing” scenario.
The S&P 500’s advance reflected renewed confidence in the durability of U.S. growth and expectations that the Federal Reserve remains on track for policy easing later this year. The Nasdaq’s 2% gain underscored ongoing enthusiasm for growth and technology, though leadership broadened beyond the 2025 mega-cap cohort. Importantly, market breadth improved, with the S&P 500 Equal Weight ETF (RSP) outperforming at +2.4%, suggesting rotation into previously lagging mid-cap and cyclical segments.
Macro Drivers
- A softer-than-expected December jobs report and subdued jobless claims sustained rate-cut optimism without triggering recession concerns. Meanwhile, ISM and sentiment data signaled a sluggish but stabilizing backdrop—consistent with slower, yet positive, growth rather than contraction. Together, these indicators reinforced investor confidence in a gradual normalization path for the economy and policy.
Sector & AI Leadership
- Consumer Discretionary, Materials, and Industrials led sector performance, buoyed by lower-rate expectations, improving housing and construction tone, and renewed interest in global cyclicals. AI-related themes remained an anchor of market leadership, with key semiconductor and infrastructure beneficiaries extending 2025’s momentum as focus shifts from speculative enthusiasm to tangible monetization of deployed AI capacity.
The Week Ahead
U.S. markets head into a pivotal week as investors digest a dense slate of macroeconomic releases and the official start of Q4 earnings season—both likely to influence short-term volatility and medium-term positioning.
Key Macro Data
- Wednesday – CPI (December): The marquee release of the week, with investors watching closely for signs of inflation persistence or re-acceleration that could delay the Federal Reserve’s policy-easing timeline.
- Thursday – Retail Sales & Trade Data: December retail sales should confirm whether consumer spending remains resilient into year-end. Import/export prices and business inventories will add texture to the inflation and supply-chain narrative.
- Friday – Housing & Industrial Output: Data on housing starts, building permits, and industrial production will round out the week, offering a broader perspective on goods-producing sectors and construction momentum heading into Q1.
Earnings to Watch
Q4 earnings season begins in earnest with the major U.S. banks—JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, and BlackRock—providing early insight into credit quality, loan demand, and capital markets activity.
DISCLOSURES
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The S&P 500 generally represents performance of 500 large companies listed on exchanges in the U. S. It is one of the most commonly followed equity indices. The Nasdaq Composite Index is a market-weighted index that measures the performance of more than 3,000 common equities listed on the Nasdaq Composite Market. The Russell 2,000 Index is a market-cap weighted index that measures the performance of approximately 2,000 of the smallest companies in the Russell 3,000 Index. The MSCI ACWI captures Large and Mid-Cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. With 2,921 constituents, the index covers approximately 85% of the global investable equity opportunity set. FactSet Research System is a financial data and software company that provides research for Wall Street professionals and individual investors.
