Markets This Week: 5 Key Things to Watch (Oct. 5-9, 2026)
As geopolitical and inflationary tensions continue to linger, there are plenty of news developments ahead in the markets this week that should provide more insight into the health of the US economy and stock market. 1. US Services PMI One important piece of data to keep an eye on is the US Services PMI for September, which will be released on Monday, October 5th at 9:45 a.m ET. Data in recent months has exceeded expectations, as strong consumer demand has helped offset weaker growth in other areas.1 US Services PMI Data Recent growth in the services sector has also helped to offset comparatively slower growth in the US manufacturing sectors.2 Keep an eye on this new monthly data to see if this trend continues or if there is a reversal in this momentum. » Start investing today: Explore top brokerage accounts with our detailed review 2. US Trade Balance Another important piece of data to watch in the markets this week is the release of US trade balance data on Tuesday, October 6th at 9:45 a.m ET. Recent data from the beginning of Q3 was very concerning, as the US trade deficit reached a high not experienced since March 2025.3 The US export market has been showing concerning signs, as the US economy’s exports recently slumped by 2.1% in July, according to data released in early September.4 This data should provide a better picture of the health of the US economy amid the trade war and geopolitical tensions. 3. Consumer and Labor Market Trends The combination of prolonged interest rates and sticky inflation has made things much harder for consumers in recent quarters. There are several important pieces of data to keep an eye on this week, which will complement recent inflation data: Consumer credit data will be released on Wednesday, October 7th at 3 p.m ET. Weekly jobless claims will be released Thursday, October 8th at 8:30 a.m ET. University of Michigan preliminary consumer survey will be released on Friday October 8th at 10:00 a.m ET. ETFs like the State Street Consumer Staples Select Sector SPDR ETF (XLP), which performed very well this year, could be worth monitoring.5 State Street Consumer Staples Select Sector SPDR ETF Performance Consumer staples stocks are generally perceived as a safer bet amid economic tensions and have so far performed very well in the market. Be on the lookout for any changes in consumer sentiment. » Ready to invest for retirement? Check out our review on the top IRA accounts 4. Tech Stocks and Inflationary Concerns Tech stocks have still rallied by nearly 8% in the past month, despite the recent rate hike and inflationary concerns in the market. In particular, it is a good idea to keep a close eye on semiconductor stocks, which have been performing well amid strong earnings growth and acquisition activity.6 The weaker than expected Jobs report also helped to support sentiment for tech stocks. Many investors took this as a sign that the Fed may have more of a reason to delay rate hikes in upcoming meetings.7 Another important trend to monitor that will impact tech equities is the energy markets. Any long-term inflationary fears could spark the risk of additional rate hikes, a move that could deter tech equity investors. 5. Earnings to Watch This Week There will also be a large number of significant earnings released for consumer companies in the US stock market. Company Earnings Release Constellation Brands Tuesday, October 6th after the market closes Levi Strauss Wednesday, October 7th after the market closes Pepsico Thursday, October 8th after the market closes Delta Airlines Friday October 9th after the market closes These results represent a balance of key themes in the US economy, and should provide more data regarding the health of US consumers. » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (Sept. 28–Oct. 2, 2026)
This week is full of exciting developments in the markets. This week’s note covers some of the top economic developments in the United States, Europe, China, and Japan, and also covers major earnings announcements. 1. New Employment Data There will be multiple pieces of labor market data released in the markets this week. Weekly jobless claims on Thursday at 8:00 a.m ET Unemployment rate and average monthly earnings data on Friday at 8:30 a.m ET Latest data from August showed a surprise rebound in labor market activity, as the economy added 162,000 new jobs and the unemployment rate remained at 4.1%.1 US weekly jobless claims also fell to a new low last week, indicating a stronger labor market.2 However, Investors should still watch for new data, especially since consumers are struggling with ongoing inflation and higher interest rates. » Start investing today: Explore top brokerage accounts with our detailed review 2. Q3 2026 Growth Estimates New Q3 2026 growth estimates will also be released this week on Wednesday at 8:30 a.m. ET. A recent survey from the Philadelphia Federal Reserve Bank projects that the US economy will grow by 2.2% in Q3 2026, notably higher than previous estimates.3 This would represent a massive recovery from growth in previous quarters and could spark more optimism in the markets this week.4 This is an important metric to monitor, as investors have been very cautious about recent rate hikes, the inflationary outlook, and long-term global growth prospects. 3. Consumer Sentiment Investors should also keep a close eye on consumer stocks, as new consumer data points will be released in the markets this week. Below are some of the major reports to keep an eye on: Consumer confidence data released on Tuesday, September 29th at 10:00 a.m ET Personal income and consumer spending data on Wednesday, September 30th at 8:30 a.m ET Average hourly earnings on Friday, October 2nd at 8:30 a.m ET According to recent data from McKinsey, consumer sentiment has remained steady relative to Q2 2026.5 Nevertheless, this data is very important to monitor, as ongoing geopolitical tensions and inflationary concerns have put pressure on US consumers. The iShares US Consumer Staples ETF (IYK) has still pulled back by 6% this year on broader macro concerns. » Ready to invest for retirement? Check out our review on the top IRA accounts 4. Global Macro News It’s also important to monitor key economic developments in other global markets this week, including Japan, Europe, and China. Date New Economic News Monday September 28th China industrial profits data Tuesday September 29th Australia’s Central Bank will make a decision about interest rates Japan Leading Indicators Data Wednesday September 30th China’s manufacturing and non-manufacturing PMI data will be released Germany’s retail sales data will be released Thursday October 1st Japan will release new CPI data The Tankan Manufacturing Index for Q3 2026 will be updated in Japan Friday October 2nd The EU will release the Harmonized Index of Consumer Prices The OECD recently lifted global growth projections to 2.9% amid ongoing geopolitical and macro concerns.6 Be on the lookout for new inflation and rate hike data in other markets, as this could result in lower growth in the global economy this year. 5. Earnings to Watch This Week Below are some of the top earnings releases for this week, which include dominant financial, hospitality, tech, and consumer giants. Earnings Release Schedule Jefferies Group Monday, September 28th after the market closes Carnival Corporation Tuesday September 29th before the market opens Micron Technology Wednesday, September 30th after the market closes Accenture Thursday, October 1st before the market opens Nike Thursday, October 1st after the market closes Earnings results from major tech companies like Micron Technology and Accenture could have a spillover impact on other tech equities. » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (September 21-25, 2026)
The stock market is poised for another eventful week following ongoing geopolitical tensions and a new rate hike decision from the Federal Reserve. Key market news to watch this week includes new manufacturing, labor market, and real estate data, along with sector-level developments. 1. Tech Stocks One important sector to continue following in the markets this week is the technology sector. Two recent areas of concern include the Federal Reserve’s decision to hike interest rates, as well as the discourse from major AI companies about slowing down AI developments.1 Any additional geopolitical shocks could increase concerns about inflation, potentially triggering a sector sell-off. Moreover, rising US Treasury yields have recently reached a high not experienced since 2007, which may prompt some investors to rotate out of equities into safer options.2 The iShares Technology ETF (IYM) has been very volatile this year, but has still rallied by around 28.6%. » Start investing today: Explore top brokerage accounts with our detailed review 2. Manufacturing PMI Investors should also keep an eye on the US Flash Manufacturing PMI data, which will be released on Wednesday, September 23rd at 9:30 a.m ET. The US manufacturing sector has begun to show initial signs of a slowdown. Manufacturing activity fell last month, after seven previous months of increases.3 While AI investments have continued to pour in, supporting new infrastructure developments, it has not been enough to offset weakness in other areas.4 Keep an eye on various manufactured ETFs this week, including the iShares U.S. Manufacturing ETF (MADE) and the Vanguard Industrials ETF (VIS). 3. Labor Market Updates There will also be new weekly jobless claims data released in the markets this week on Thursday, September 24th at 9:30 a.m ET. Previous data was very favorable, although it was slightly overstated because of the holiday impact.5 The unemployment rate has also remained steady at 4.1%, which was one of the data points that supported the Federal Reserve’s decision to hike interest rates. One important factor to note is that labor market activity has been inconsistent across various areas of the economy. For example, food services and accommodations job growth experienced similar weakness as it did in 2020, while healthcare and social assistance has continued to drive labor market growth.6 » Ready to invest for retirement? Check out our review on the top IRA accounts 4. New Home Sales Another important area of the market to watch is the real estate sector. New home sales data will be released at 10:00 a.m ET on Thursday, September 24th. The real estate industry has begun showing signs of a cooldown, and pending home sales data recently fell by around 4% YoY in August.7 Pending Home Sales Monthly Data One additional concern in the industry is that mortgage rates will increase following the Fed’s rate hike decision. The 30 year mortgage rate recently approached 7%, which may put more pressure on potential new home buyers.8 Be sure to keep an eye on how real estate equities respond to these macro tensions. The Vanguard Real Estate ETF (VNQ) has declined by around 6% in the past month due to these weaker conditions. 5. Consumer Stocks Consumer stocks may also have an eventful week, as consumers face increased pressure from rising inflation and interest rates. There are several major consumer equities that will be releasing earnings in the markets this week. Company Earnings Release Date YTD Return Autozone Tuesday September 22nd before the market opens -15.8% Costco Thursday September 24th after the market closes 3.8% General Mills Wednesday September 23rd before the market opens -21.8% These results may provide more insights into the sentiment for consumer staples and consumer discretionary stocks. » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (September 14-18, 2026)
There are plenty of new developments ahead in the markets this week, which could result in additional volatility. Most notably, the Federal Reserve is poised to announce updates to its interest rate policy amid heightening inflationary concerns. 1. Oil Price Surge Oil prices have increased strongly this month due to rising tensions in the Middle East. Traffic in the Strait of Hormuz has continued to stall, and the Houthis recently gained control of the Port of Mocha in Yemen.1 The price of crude oil topped $100/barrel last week, and could move higher if supply-side shocks continue in the markets this week.2 The Vanguard Energy ETF (VDE), which has rallied around 46% YTD, could experience additional volatility this week amid new geopolitical developments. » Start investing today: Explore top brokerage accounts with our detailed review 2. US Rate Decision One of the most important events in the markets this week will likely be the Federal Reserve’s decision on interest rates. The Federal Reserve will make this decision on Wednesday at 2 p.m ET. Inflation remained unchanged at 3.4% last month, but the Federal Reserve will also have to consider the impact of recent energy price shocks.3 The recent Jobs report was also very strong, which may also put pressure on the Fed to hike rates, especially if inflation looks like it will increase in September and subsequent months.4 Sectors like technology could be some of the top market movers this week if there are meaningful policy updates. 3. Global Macro Updates This week will also be very eventful in other global markets, as many Central Banks will make interest rate policy decisions.5 The Bank of England and Bank of Japan will also make new interest rate policy decisions on Thursday and Friday, respectively. Investors will likely be closely following all of these developments, as a massive push for rate hikes could spark concerns about the Federal Reserve’s success in keeping inflation in check. Moreover, widespread rate hikes could also result in slower global growth projections. The latest projections from the International Monetary Fund (IMF) are calling for 3% global growth, but lingering economic and political risks could result in growth downgrades and other economic shocks.6 » Ready to invest for retirement? Check out our review on the top IRA accounts 4. Retail Sales Investors should also be on the lookout for new U.S. retail sales data, which will be released on Wednesday at 8:30 a.m ET. Last month’s report was a bit concerning, as retail sales dipped following stronger performance in May and June.7 Inflation has lingered at 3.4% in recent months, and any additional energy price shocks would weaken consumer sentiment in subsequent months. The VanEck Retail ETF (RTH) has pulled back by nearly 7% in the past month on the back of these broader macro fears. 5. Real Estate Data The real estate industry will also have a lot of exciting news released this week. The Pending Home Sales Index will be released on Thursday at 10:00 a.m ET, and Housing Starts data will also be released on Thursday at 8:30 a.m ET. Investors should continue to monitor the recent industry cooldown, as home sales recently fell by 2% in August.8 Moreover, the upcoming interest rate decision from the Federal Reserve this week could also strongly impact the real estate industry. The average mortgage rate in the United States recently rose to 6.85%, the highest rate since June 2025.9 Keep an eye on leading real estate ETFs, such as the iShares US Real Estate ETF (IYR) and the Vanguard Real Estate ETF (VNQ). » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (August 17-21, 2026)
There are plenty of important pieces of economic data that will be released in the markets this week. Some of the main updates include weekly jobless claims, manufacturing and services data, existing home sales updates, and earnings results for major consumer companies. 1. Additional Federal Reserve Discourse The Federal Reserve will release its July FOMC meeting minutes on Wednesday at 2 p.m ET. This will be one of the most crucial pieces of information released this week, as rate hikes are one of the main hot topics in the markets at the moment. Inflation recently rose to 3.4% YoY in July, largely due to the reduced shock of energy prices during that month.1 US Inflation Rate The Federal Reserve previously voted 9-3 to leave rates unchanged during its last policy meeting.2 Equities have rallied strongly recently due to the reduced fear of rate hikes and energy price shocks. However, inflationary risks have heated up in recent days as oil prices have risen considerably in the past week. » Start investing today: Explore top brokerage accounts with our detailed review 2. Jobless Claims Jobless claims have continued to rise in recent weeks, most recently exceeding the weekly average by 10,000.3 New weekly jobless claims data will be released on Thursday at 8:30 a.m. ET. Although the labor market has remained relatively healthy, this is still an important metric to monitor in the coming months. Additional weaker labor market data could also support the Fed’s ongoing decision to delay rate hikes for the time being.4 Gold mining equities may also continue to respond to labor market data, as they have in recent weeks. The VanEck Gold Miners ETF has rallied by 18% over the past month amid economic and geopolitical fears. 3. Services and Manufacturing Data S&P will release new flash services and manufacturing PMI data on Friday at 9:45 a.m ET. While data from July was very strong, exceeding analysts’ expectations, this is still an important area to monitor as supply-side and inflationary risks linger. Recent sources of growth have been mixed, as stronger consumer spending and AI-related investments helped support growth in Q2 2026.5 However, there is still a lot of uncertainty in other manufacturing sectors, and the United States’ exports have been facing pressure amid new geopolitical risks. Another important piece of broad macro data to monitor is the US leading indicators, which will be released at 10:00 a.m ET on Thursday. This data includes a health check on leading economic and financial indicators, including S&P 500 performance, real estate data, labor market data, and new manufacturing orders. » Ready to invest for retirement? Check out our review on the top IRA accounts 4. Real Estate Updates Investors should also keep an eye on new data in the real estate industry. Existing home sales fell to a new low in July, and the market is beginning to display signs of a cooldown.6 There will be a wide variety of new data released that impacts the industry, including the following: NAHB Housing Market Index released at 10:00 a.m ET on Monday Housing starts released on Tuesday at 8:30 a.m ET Pending home sales released on Tuesday at 10:00 a.m ET Be sure to monitor real estate ETFs like the Vanguard Real Estate ETF (VNQ), which could experience some volatility this week. 5. Earnings Updates This week will also be an eventful earnings release week for major consumer companies, including Home Depot, Lowe’s Corporation, Target, and Walmart. Company Earnings Release Home Depot Tuesday August 18th before the market opens Lowe’s Corporation Wednesday August 19th before the market opens Target Wednesday August 19th before the market opens Walmart Thursday August 20th before the market opens Earnings results from these companies will provide more data about consumer health, inflationary risks, and overall sentiment in the US economy. Consumer discretionary and staples stocks could be some of the strongest market movers this week if these earnings releases are eventful. Keep a close eye on ETFs like the Vanguard Consumer Staples ETF (VDC) and the Vanguard Consumer Discretionary ETF (VDX). » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (August 10-14, 2026)
There will be multiple events that will impact the markets this week, most notably the release of new inflation data. There will also be several key earnings results releases for companies operating in the healthcare, mining, and technology industries. 1. Real Estate Market The real estate market has faced headwinds in recent months due to rising inflation and the potential for further rate hikes. One important piece of data to follow in the markets this week is the existing home sales data, which will be released on Tuesday, August the 11th at 10:00 a.m ET. Sales fell by 2.4% in June, so this is important data to follow.1 Despite these industry tensions, REITs have had very strong returns this year. Some of these products yield nearly 4%, well ahead of the S&P 500.2 It may also be a good idea to closely monitor other traditional real estate ETFs this week, including the Vanguard Real Estate ETF (VNQ) and the iShares US Real Estate ETF (IYR). Both of these ETFs could be some of the stronger market movers this week. » Start investing today: Explore top brokerage accounts with our detailed review 2. July Inflation Data Wednesday will also be another very important day in the market this week, as new inflation data will be released at 8:30 a.m ET. The Federal Reserve delayed hiking interest rates and is awaiting new data about inflation developments in the United States. According to data from the Federal Reserve Bank of New York, the median inflation projection is 3.6%.3 Last month’s cooldown was largely driven by the correction in energy prices, a trend that will likely also affect July data.4 Markets could respond strongly to this new data, coupled with oil price movements, as investors continue to speculate on the potential for rate hikes in H2 2026. 3. Consumer Sentiment There will also be several important pieces of consumer data released on Friday. July retail sales data will be released on Friday at 8:30 a.m ET, while the University of Michigan preliminary consumer survey will be released at 10:00 a.m ET. Data from last month was notably weaker relative to May, as consumers continued to feel the pressure of inflation.5 Despite this weakened sentiment, select retail equities have rallied strongly in the past month. The State Street SPDR S&P 500 Retail ETF (XRT) has rallied by 3.6% in the past month, while the Amplify Online Retail ETF (IBUY) has increased by 4.8%. » Ready to invest for retirement? Check out our review on the top IRA accounts 4. New Earnings Data Although the majority of major tech and other dominant S&P 500 companies have already announced earnings, there are several important earnings releases to monitor in the markets this week. Monday August 10th Simon Property Group, Rocket Labs, and Barrick Mining Corporation Tuesday August 11th SEA Limited, Lumentum Limited, and Cardinal Health Wednesday August 12th Cisco Systems and Coherent Corporation Thursday August 13th Applied Materials, Brookfield Corporation, and NetEase Inc Friday August 14th Freedom Holding Corporation and CG Oncology Inc. As these earnings results are released, it may also be ideal to follow developments in these areas: Updates from Cisco Systems, NetEase, Rocket Lab and Applied Materials, which could have a spillover impact on sentiment for tech equities Additional financial updates from healthcare giants like CG Oncology and Cardinal Health 5. Commodities Commodities will also likely be a very important theme in the markets this week, especially since there will be new inflation data. Copper will likely be a salient theme this week, as recent supply disruptions coupled with the continued demand for electrification led to a strong price spike last week.6 Precious metals stocks also trounced the S&P 500 last week, and these stocks could be worth monitoring amid the new geopolitical and economic news released in the markets this week. Moreover, there may be continued volatility in the oil markets since the United States and Iran have failed to reach a new agreement.7 » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (August 3-7, 2026)
There will be a lot of new economic news released in the markets this week, including manufacturing, services, and employment data. Key companies in the tech and hospitality industry will also release earnings results this week. 1. Manufacturing Data The US economy’s growth came in much slower than expected in Q2 2026, partially because of weaker export growth.1 One import metric to keep an eye on is manufacturing data, which may provide more context to the growth outlook for H2 2026. One of the upcoming data releases in the markets this week is the US Manufacturing PMI, which will be released on August 3rd at 9:45 a.m ET. Tensions between Iran and the United States, which have caused an uptick in inflation, have resulted in slower growth in the United States’ traditional manufacturing sectors. This trend is worth monitoring amid the heavy AI-driven narratives in the market and economy. AI has been behind a large portion of the economy’s growth and stock market returns. Around two-thirds of GDP growth from the first half of 2025 came from new AI investments.2 » Start investing today: Explore top brokerage accounts with our detailed review 2. Services Sector Update One of the main factors that supported Q2 2026 included robust consumer spending and relatively healthy activity in the services sector.3 There will be new monthly US Services PMI data released on Wednesday, August 5th at 9:45 a.m ET. This data is well worth monitoring, as tensions between the US and Iran have begun to put pressure on the US services sector in recent months.4 Some key services-based ETFs to keep an eye on include the Vanguard Consumer Discretionary ETF (VCR) and the Vanguard Communications Services ETF (VOX). 3. Additional Labor Market Updates There will also be a lot of new labor market data released this week. Labor markets have been facing a lot of tension in recent months, as job growth has declined and the unemployment rate has remained at around 4.2%. Below are some of the top news releases to monitor this week: ADP National Employment Summary Report: Wednesday, August 5th at 8:15 a.m ET Employment/Unemployment Report: Friday, August 7th at 8:30 a.m ET Average Hourly Earnings: Friday, August 7th at 8:30 a.m ET New AI investments from companies have driven new layoffs in industries like technology. There were 245,000 layoffs in this industry last year, and total layoffs in the tech industry have already reached 170,000 this year.5 Labor market data has been gradually weakening in recent months. Nonfarm payroll growth has already been declining in recent months.6 Nonfarm Payrolls Weaker labor data could be one factor that pushes the Federal Reserve to delay rate hikes, although inflationary pressure has also put pressure on the Fed to hike rates in the near term.7 » Looking for a guaranteed income? Explore today’s top CD rates 4. Global Macro News There will also be a lot of global macro news released in the markets this week, following the US economy’s underperformance in Q2 2026. Below are some major developments to monitor in China, Japan, and the European Union. Country/Region Economic Releases China Private Manufacturing PMI on August 3rd Private Sector Services PMI on August 5th Japan Services Sector Health Report on August 3rd BOJ meeting minutes from July policy meeting on August 5th Europe Eurozone Manufacturing PMI on August 3rd This data is all worth monitoring, as any setbacks could result in growth downgrades for 2026. The World Bank is currently forecasting 2.5% global growth due to geopolitical tensions, rising commodity prices, and other economic headwinds.8 5. Important Earnings Results There have been several major exciting earnings announcements in recent weeks for major tech giants, resulting in a massive divergence in performance among US tech companies. There will also be several important earnings releases in the markets this week. Some leading names in the tech and hospitality industry will report earnings this week. Company Q2 Earnings Announcement Palantir Technologies August 3rd at market close Marriot International August 3rd at 7:00 a.m ET Advanced Micro Devices August 4th at market close Space X August 4th at 3:30 p.m ET Expedia Group August 5th at 4:30 p.m ET Airbnb August 6th at market close Key ETFs to follow this week include the Invesco Leisure and Entertainment ETF (PEJ), the VanEck Semiconductor ETF (SMH), and the Global X Defense Tech ETF (SHLD). » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (July 27-31, 2026)
The Federal Reserve is poised to make its long-awaited decision about interest rates this week. Beyond the Fed decision, markets will also be watching several major catalysts this week, including GDP estimates, inflation, and consumer sentiment data. 1. US Rates Decision The Federal Reserve will meet this week and announce its interest rates decision on Wednesday at 2 p.m. A CME watch tool recently raised the odds of a rate hike to 82%, up from 53% a week ago.1 This decision may have a strong spillover impact on the market, especially since investors have already been selling tech stocks due to new inflationary fears.2 Other Central Banks, such as the ECB and DOJ, have hiked rates recently in response to new inflationary pressures. Moreover, the new wave of energy inflation in the past few weeks is another new indicator that could strongly impact Central Bank policy in the coming months. » Start investing today: Explore top brokerage accounts with our detailed review 2. GDP Estimates The BEA will release new Q2 2026 growth estimates for the US economy on Thursday at 8:30 a.m. The Federal Reserve Bank of New York currently projects that Q2 2026 GDP growth will reach 2.8%.3 This will be a crucial update for markets this week, as geopolitical tensions have sparked concerns over a slowdown in global growth. GDP growth was 2.1% last quarter, and JP Morgan is currently projecting 1.5-2% growth in 2026.4 3. New Inflation Updates There will also be new inflation data released this week, which will provide more context to the recent oil price surge. The PCE Index, which measures price increases excluding food and energy, will be released on Thursday at 8:30 a.m. The recent increase in inflation in 2026 was largely driven by energy prices.5 However, the PCE Index has also been rising recently, by 4.1% in May, compared to 3.8% in the previous month.6 This uptick is slightly concerning, as it displays how items apart from energy and food are increasing in price. » Looking for a guaranteed income? Explore today’s top CD rates 4. Consumer Sentiment Updates Consumer staples stocks have rallied circa 8% YTD, but this performance was largely driven by the surge in these stocks during the first two months of this year.7 Recent geopolitical and inflationary pressures have made the current health of the US consumer market hazy. Consumer confidence data will be released on Tuesday at 8:00 a.m ET, while personal income and consumer spending data will be released on Thursday at 10:30 a.m ET. Overall, consumer sentiment has been weakening over the past three years, further exacerbated by the rebound in inflation in 2026. Consumer stocks are one key area to monitor in markets this week, as there will also be new inflation and interest rate data paired with this new consumer data. 5. Tech Stocks Earnings News The recent surge in oil prices and concerns over subsequent rate hikes have been putting pressure on tech stocks. The technology sector is likely one of the top sectors to monitor in markets this week. Major tech giants will be releasing earnings next week, around the same time as the Federal Reserve makes its rate hike decision. Company Earnings Announcement Microsoft Wednesday July 29th at 2:30 p.m ET Meta Platforms Wednesday July 29th at market close Amazon Thursday July 30th at market close Apple Thursday July 30th at market close Tech stocks pulled back by around 3% last week and may be some of the main market movers this week. » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (July 20-24, 2026)
There are plenty of exciting developments ahead in the markets this week, including new labor market, housing, and manufacturing data. Geopolitical tensions also peaked over the weekend, and investors should keep an eye on how these developments will impact markets this week. 1. Labor Market Sentiment One of the main data points that may impact future rate hikes is an update on the health of the US labor market. Last month’s Jobs report showed weaker employment growth, as the US economy only added 57,000 new jobs.1 There will likely be additional layoff data from major tech companies this week. So far, major giants like Xbox, Robinhood, and Microsoft have already conducted major layoffs, and Google employees recently signed a petition calling for layoff protection.2 Investors should also be on the lookout for new weekly jobless claims data, which will be released on Thursday. Moreover, major tech companies are also reporting earnings data next week and may provide updates about layoffs. » Start investing today: Explore top brokerage accounts with our detailed review 2. Manufacturing PMI Data Investors should also keep an eye on the new S&P Global Flash US Manufacturing PMI data, which will be released on Friday. Manufacturing PMI in the United States recently dropped slightly to 53.9, below the initial projections of 55.7.3 Manufacturing PMI Many global markets now face the risk of slower manufacturing activity, as recent geopolitical tensions have increased input costs.4 This data, coupled with movements in energy prices, should provide more insight about growth data for Q2 2026 and subsequent quarters. 3. New Home Sales Another major sector to monitor in the markets this week is real estate, which has been experiencing a moderate cooldown. Pending home sales recently fell by 5.4% MoM and 0.3% YoY in June, according to data from the National Association of Realtors.5 The US Census Bureau and Department of Housing and Urban Development will release June 2026 new home sales data on Friday. Sales have been cooling down in recent months, and new June data could impact sentiment for real estate equities.6 The Vanguard Real Estate Index Fund ETF (VNQ) has rallied 13% YTD amid concerns over rate hikes and other broader economic concerns. » Looking for a guaranteed income? Explore today’s top CD rates 4. ECB Rate Decision Another important event in international markets this week is the upcoming ECB interest rate decision. The ECB recently decided to hike rates by 25 basis points in June to combat the new wave of inflation that hit markets.7 Euro Area Interest Rate Inflation cooled down in June, but global central banks will have to continue monitoring geopolitical developments and new inflation data in subsequent months. The ECB will make its decision about rates during its meeting this Thursday. 5. Geopolitical Tensions Geopolitical tensions took a nasty turn at the end of last week. Elevated tensions between Iran and the United States could be one of the main market movers this week. Both Iran and Kuwait recently reported attacks on their infrastructure on Friday, severely harming the progress of previous ceasefire discourse.8 Oil prices rose by more than 10% during the week due to these tensions, reaching a new monthly high.9 The Vanguard Energy ETF (VDE) rallied by 2.4% last week amid the S&P 500 decline. Oil equities may be an interesting sector to observe this week, as additional geopolitical flare-ups could continue to impact energy equities. » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (July 13-17, 2026)
Markets this week will be filled with exciting new developments, including updates on inflation, rate hike expectations, and consumer health in the economy. Geopolitical developments also took a negative turn at the end of last week, which could spill over to equity markets this week. 1. Ceasefire Issues Tensions in the Middle East will likely be front and center in the markets this week. Trump recently announced that the ceasefire deal with Iran was over, although the United States and Iran have continued to maintain a dialogue.1 Oil stocks rallied slightly last week and should be worth keeping an eye on as geopolitical developments continue in the markets this week. Chemical stocks have also benefited from supply-side tensions. Morningstar recently noted that leading chemical stocks rallied by over 20% YTD by the middle of April due to the surge in chemical prices.2 ETFs like the Vanguard Energy Index Fund ETF (VDE) and the Fidelity Select Chemicals Portfolio (FSCHX) could be worth monitoring closely this week. » Start investing today: Explore top brokerage accounts with our detailed review 2. Upcoming Inflation Data Investors should also keep an eye on new inflation data, which will be released on Tuesday, July 14. A new Federal Reserve report is calling for 3.7% inflation in June, the highest level experienced since September 2023.3 Inflation has recently peaked at a new high following tensions in the Middle East, and equity investors are cautiously monitoring whether this is a short-term shock or a long-term issue. While markets appear to have priced in inflation peaking, any ongoing geopolitical tensions and higher inflation readings would reintroduce stronger fears of a future rate hike this year. 3. Fed Reserve and Rate Hikes The Federal Reserve will present its semiannual monetary report to Congress on Tuesday, July 14, shortly after new CPI data is released. We are at a potentially crucial turning point in the market, as the Federal Reserve may need to consider rate hikes following its aggressive cuts in 2025.4 The Bank of Japan and the ECB have recently had to hike rates amid inflationary pressures, and the Federal Reserve has been facing increased pressure to follow suit.5 Once new inflation data is released, the Federal Reserve may provide more clarity about its future rate decisions. » Looking for a guaranteed income? Explore today’s top CD rates 4. Retail Sales Sentiment There will also be new consumer data released in the markets this week, including June retail sales data on Thursday, July 16, and consumer sentiment data on Friday, July 17. This data will be a strong complement to the newly released CPI data and could impact sentiment for retail and consumer stocks in the markets this week. Data from previous months was very strong, so any changes in readings in June could impact market sentiment.6 ETFs like the State Street SPDR S&P Retail ETF (XRT) currently trade at a price/earnings discount to the S&P 500 and have had solid performance in the past year. Themes like retail could have an eventful week following the combination of new inflation and retail sales data released this week. 5. Important Earnings Releases July will also be a very important month for the market because of new earnings releases in multiple sectors. One major area of the market to monitor is the financial sector, as leading US banks like Wells Fargo, JPMorgan Chase, and Bank of America will report earnings on Tuesday, July 14.7 The iShares US Financial Services ETF (IYG) has only risen by 1.5% amid broader economic and geopolitical concerns this year. Other notable earnings releases to monitor in markets this week include Netflix, UnitedHealth Group, and Abbott Laboratories. Investors should also keep a close eye on how tech and healthcare ETFs respond to upcoming earnings updates in the upcoming weeks. » Stay ahead of your finances: Join our free newsletters today
Markets This Week: 5 Things to Watch (June 29–July 3, 2026)
Some of the major trends to monitor in markets this week include new employment data in the United States and a potential roadblock to peace agreements between the United States and Iran. There will also be several economic data reports released this week that will focus on specific sectors in the US economy, as well as economic conditions in the European Union and Japan. 1. New Employment Data The U.S. BLS will release new labor market data this week, a move that will likely strongly impact equity market sentiment and subsequent discourse from the Federal Reserve. We have previously covered stronger employment data in previous months, while touching on the risks of ongoing layoffs in industries like technology. The previous Jobs Report in May showed strong growth in multiple sectors and raised concerns over the need for rate hikes.1 The current market consensus is that employment growth will be slightly slower in June relative to May.2 These upcoming reports, coupled with new inflation data, should guide the Fed’s assessment of whether it will need to hike interest rates in subsequent quarters. » Stay ahead of your finances: Join our free newsletters today 2. Ceasefire Developments Face New Challenges Recent ceasefire agreements between the United States have helped to support market sentiment in recent weeks. However, geopolitical tensions escalated over the weekend after the market closed, which could have a strong impact on market sentiment this week. Iranian drones recently attacked Bahrain after the United States carried out retaliatory strikes on Iran.3 This development is crucial to monitor, as recent peace developments have supported the market in recent weeks. Any negative developments could harm equity market sentiment in the short term. Energy equities are worth monitoring next week. The Vanguard Energy Index Fund ETF (VDE) has fallen by nearly 10% amid declining geopolitical tensions. However, energy has been a strong-performing sector this year, and is worth monitoring in the short term. » Start investing today: Explore top brokerage accounts with our detailed review 3. Tech Stocks Tech stocks were one of the worst-performing sectors last week. Investors should keep a close eye on tech stocks, particularly semiconductor stocks, as this sector may be very volatile this week. Exchange-traded funds that track the S&P 500 are heavily exposed to tech stocks. The top 10 S&P 500 constituents are all tech and AI companies and account for 37% of the index.4 One key event to watch in markets this week is the Federal Reserve’s additional comments on Wednesday, which could impact technology stocks. These comments will follow the release of labor market data and could provide more insight into the Federal Reserve’s stance on future rate hikes. Tech stocks could be worth monitoring, following their strong sell-off last week, especially since there may be new geopolitical tensions in markets this week. 4. US and International Growth Data One of the main concerns in the market has been a potential slowdown in global growth following tensions in the Strait of Hormuz. Conditions in the United States look a bit more favorable, following recent revisions to Q1 2026 GDP growth data.5 There will be many important pieces of economic growth data released in the markets this week. In the United States, there will be new data released about construction spending, manufacturing PMI, consumer confidence, and other labor market data. The BOJ will also release new inflation and growth data next week, providing more context on the impact of geopolitical tensions. Japan’s quarterly Tankan Business Survey will provide more insight into Japan’s manufacturing activity and economic health. Japan has entered a period of slower growth, with current projections calling for 0.5% growth in FY 2026.6 Recent inflationary pressure has also pushed the BOJ to hike rates to record levels in 2026. The European Union will release new CPI data this week, which should provide more data about the impact of conflicts in the Middle East. Last month’s release showed 3.2% inflation rate in the Euro area, driven by a circa 10% increase in energy prices and lower moves in other categories.7 5. Real Estate and Data Center REITs Real estate stocks performed exceptionally well last week amid the broader sell-off in the S&P 500 and tech stocks. This sector is worth monitoring this week, as there will be new data on construction activity and home prices this week. Another particularly intriguing area to monitor is data center spending, which has risen to record highs in 2026.8 Data center REITs like Digital Realty Trust (DLR) and Equinix ( EQIX) have trounced the S&P 500 this year. Companies like these are worth following as we potentially head into a volatile turn in markets this week.
Markets This Week: 5 Things to Watch (June 22-26, 2026)
Some of the main events in markets this week will be ongoing dialogues between the United States and Iran, as well as new economic data releases following the Federal Reserve’s decision to hold rates steady. This week will be very eventful, as new data will be released that impacts sectors such as technology, real estate, consumer staples, and manufacturing. 1. AI Sentiment Improvements AI-themed stocks could be poised for an additional rally, especially since the Federal Reserve decided not to rates during its recent meeting. The Roundhill Memory ETF (DRAM) has rallied strongly, especially following the short-term political de-escalations. This ETF rose by nearly 10% last Friday, and may continue to have strong momentum and interest from investors this week. This ETF has been one of the fastest-growing ETFs in the market, recently surpassing the $10 billion mark. According to a recent article from Forbes, artificial intelligence stocks will account for around half of the S&P 500’s earnings growth during the year.1 Investors should keep a close watch on stocks with AI exposure, as this rally contains great volatility and no one knows what the upcoming future holds. » Stay ahead of your finances: Join our free newsletters today 2. Energy Stocks and Inflation Sentiment Oil prices have been extremely volatile during recent trading sessions. While potential peace talks have caused crude oil to drop below $80/barrel, oil prices have begun to rebound slightly as Israel’s recent strikes on Lebanon have raised questions over the success of new peace negotiations.2 The Vanguard Energy ETF (VDE) fell by 3% last week, but may be poised to rebound this week if oil prices recover.3 Investors should keep a close eye on energy markets this week, as these stocks may be poised to rebound amid any geopolitical shocks. 3. New Growth Data: Personal Income and Manufacturing Data Tensions in the Middle East have also sparked concerns over potential rate hikes and slower growth in global economies in 2026. Real GDP growth was 1.6% last quarter, but there are many vulnerable areas, such as consumer spending and manufacturing growth, that could cause weaker growth in Q2 2026.4 The BEA will release new information this week, including industry and state data from the quarter, as well as personal income and outlays data for May. Moreover, the upcoming S&P Global Flash Manufacturing PMI data should provide more insight about US manufacturing activity. This data should shed more light on the US economy’s performance during H1 2026 and sentiment for the broader equity markets this week. 4. Consumer Confidence and Real Estate Data US consumers have faced a rocky 2026 since geopolitical tensions began in late February. The combination of a new wave of inflation and potential rate hikes has created more cautious spending habits and delays in real estate transactions. While consumers have experienced temporary relief from the decline in gasoline prices, potential geopolitical shocks could reintroduce inflationary concerns.5 There may be some unique buying opportunities in markets this week for consumer staples or consumer discretionary stocks. ETFs like the Vanguard Consumer Staples Index ETF (VDC) or the Vanguard Consumer Discretionary Index ETF (VCR) may sell off this week on the back of any negative economic news. The US Census Bureau will also release data about new housing sales for May. April data was weak, and any further concerning slump in sales could cause real estate equities to sell off this week.6 5. Gold Amid Peace Negotiations Gold mining equities will likely have an eventful week following their strong decline in the previous week. One potential catalyst to monitor includes any derailing of peace negotiations between the United States and Iran. Iran recently accused the United States of violating its ceasefire agreement, a move that will likely shake markets this week.7 Any additional tensions could cause broader sell-offs in the market, including gold mining stocks. However, gold still retains its appeal in the current economic and geopolitical environment. Investors should keep an eye on any potential derailment of peace negotiations, as well as additional Central Bank buying activity, as this could add to gold’s appeal in the long term. » Start investing today: Explore top brokerage accounts with our detailed review
Markets This Week: 5 Things to Watch (June 15-19, 2026)
Markets are poised for an eventful week, most notably because the Federal Reserve will make a key decision about interest rates based on new inflation and labor market data. Sector divergence will also likely be strong this week, as there will be new developments that impact the real estate, technology, retail, and manufacturing sectors this week. This article will cover recent economic developments and address some of the potential top market movers this week. 1. Upcoming Federal Reserve Meeting The Federal Reserve will meet on June the 16th-17th to make a crucial decision about interest rates as inflationary risks heat up in the market. Inflation recently rose to a new high in May 2026, and there is a strong chance that the Federal Reserve may need to hike rates to bring inflation closer to its long-term target. Other Central Banks, such as the ECB, recently decided to hike rates due to recent inflationary pressure.1 There is a strong chance the Federal Reserve will hike interest rates, especially since inflation recently reached a 3-year high.2 US Inflation Rate A rate hike decision by the Federal Reserve would be negative for equity markets and could hit tech stocks the hardest. This decision, coupled with further developments in the energy sector this week, will strongly impact equity market sentiment. » Stay ahead of your finances: Join our free newsletters today 2. US Retail Sales Data The US Census Bureau will release US retail sales data from May on June 17th. This is an important trend to monitor, as it could impact key retail giants like Walmart, Nike, and other major retail companies. Last month’s data was relatively strong, showing 4.9% YoY growth and 0.5% MoM growth, but any disappointing data could be negative for the equity markets.3 Retail ETFs, such as the State Street PDR S&P Retail ETF (XRT), have had relatively flat YTD performance amid concerns of lingering inflation and slower economic growth. Additional rate hikes and sticky inflation could dampen retail sentiment and cause these stocks to correct in the short term. 3. Middle East Tensions and Manufacturing Outlook Manufacturing companies may face new headwinds in the upcoming months, as ongoing tensions in the Middle East have led to rising raw materials costs. According to a recent survey from Industrial Info, 83% of manufacturers cited rising raw materials prices due to conflicts in the Middle East as their primary concern.4 Overall, US manufacturing data has been strong in the first few months following tensions between the United States and Iran. The S&P Global US Manufacturing PMI recently hit 55.1 last month, representing a multi-year high.5 However, data may become much weaker in subsequent months. Investors should monitor continued negotiations between the United States and Iran next week, as this will have a strong impact on sentiment for US manufacturing stocks. 4. Technology Stocks Trends Sentiment for technology stocks has been cooling down, as seen by the strong underperformance of tech stocks relative to the broader market last week. Technology stocks will likely face another challenging week, as the Federal Reserve will make a key decision about interest rates. Tech stocks have recently been very sensitive to concerns that the strong Jobs report and rising inflation will lead to an interest rate hike.6 Accenture will also release earnings data next week, which should provide more clarity about the sentiment for US tech stocks. The market is currently expecting strong earnings for this stock, which has struggled with a circa 36% YTD decline.7 Any disappointing earnings results from Accenture and other tech companies could cause investors to flee to other less risky sectors, such as utilities or telecommunications stocks. 5. US Real Estate Investors should also keep an eye on developments in the US real estate industry, following the slight uptick in home sales in May.8 There are several pieces of data that investors should monitor, as real estate stocks are poised to have an eventful week. The US Census Bureau will release data about new housing starts and building permits on the 16th of June. This will provide additional data about whether we are heading for a cooldown in the real estate industry. Moreover, the Fed’s decision regarding interest rates will strongly impact real estate stocks, as higher rates would put more pressure on new homebuyers. House-related spending currently accounts for 15-18% of total household spending in the United States, so any negative developments in this sector could spill over to other consumer-related sectors.9 » Start investing today: Explore top brokerage accounts with our detailed review
Markets This Week: 5 Things to Watch (June 8-12, 2026)
The S&P 500 fell by around 2.5% this week, mainly due to the strong market sell-off on Friday. The combination of inflationary pressures and an uptick in new jobs led many investors to worry about rate hikes in the coming quarters. Tech stocks were hit the hardest, while there were several positive market movers this week. Here are some of the recent major economic developments, as well as the top market movers this week. 1. Tech Stocks Sell Off Friday was a challenging day for the market, as the S&P 500 fell by nearly 3% during the trading day. The market is strongly concerned about potential rate hikes following the new labor market data, which resulted in strong selling pressure for technology stocks. The Nasdaq, which has an even heavier tech weighting, fell by 4% on Friday.1 The Vanguard Information Technology ETF (VGT) fell by over 6% on Friday, erasing some of its stellar YTD gains. Major tech themes like quantum computing also sold off strongly on Friday, with many industry leaders falling by over 11%.2 Tech stocks have been the main driver of recent market performance, but may be very vulnerable to short-term pullbacks amid new economic risks in the market. » Stay ahead of your finances: Join our free newsletters today 2. New Jobs Report Increases Rate Hike Risks Markets responded poorly to the newly released Jobs report, which showed that the labor market is much stronger than expected. This new data, coupled with rising inflation in recent months, signals that the Federal Reserve may have to hike interest rates. The US economy created over 150,000 jobs in May, while the unemployment rate remained steady at 4.3%.3 This report surprised the market, as it is the third consecutive positive report amid the new rise in inflation in the markets. All eyes will be on the Federal Reserve as it processes this new information, as well as subsequent inflation readings. 3. New Inflation Concerns One of the main events in markets next week will be the release of new inflation data on June 10th. Oil prices remained above $90/barrel for most of May, and other indicators like services inflation have also been rising near a twelve-month high.4 Friday’s exaggerated sell-off shows that the market is currently very sensitive to any news surrounding potential rate hikes, so markets could sell off strongly again due to any poor inflation readings. Sentiment is mixed, but many economists are calling for higher inflation, especially if tensions in the Middle East continue. According to the Survey of Professional Forecasters, inflation may hit 6% this quarter.5 Investors should keep an eye on the upcoming CPI data this week. Hotter inflation could cause further market corrections if higher readings further exacerbate fears of a potential rate hike. 4. Top Performing Sectors While themes like information technology and consumer discretionary stocks were slammed on Friday, some themes managed to hold their ground amid the broader market sell-off. Some of the best-performing sectors on Friday included consumer staples, utilities, real estate, healthcare, and financials stocks.6 This trend highlights how themes with higher valuations, like consumer discretionary and IT stocks, were more sensitive amid the new fear of rate hikes. Other alternative investments, like bitcoin, also experienced a strong sell-off on Friday. The price of bitcoin fell by nearly 20% during the trading week, its largest weekly decline since the collapse of FTX in late 2022.7 5. Gold’s Rising Relevance Gold has been one of the best-performing commodities in recent quarters. One of the main developments supporting gold has been increased buying from Central Banks. Gold recently surpassed treasuries to become the top global reserve asset, according to an ECB report.8 This is very positive news for gold, which has become a strong safe haven for Central Banks, institutional investors, and retail investors alike. » Start investing today: Explore top brokerage accounts with our detailed review
Markets This Week: 5 Things to Watch (June 1-5, 2026)
The U.S. economy is beginning to deliver new warning signs, including a cooldown in real estate and consumer sentiment as inflation risks rise. However, performance was strong this week as tech stocks helped to support the S&P 500. New peace talks between the United States and Iran also supported the market this week. Below are five major developments in the markets this week, as well as some of the top market movers this week. 1. Oil Price Decline Amid Inflationary Concerns The price of oil continued its descent during the week, driven by new peace talks between the United States and Iran. The price of crude oil fell to $88/barrel on Friday, marking an 18% monthly decline.1 Oil equities have pulled back strongly on this news, following their strong YTD rally. The VanEck Oil Services ETF fell by 6.3% during the trading week, while the State Street Select Sector SPDR Energy ETF declined by 5%. At the moment, a rebound in inflation appears to be one of the highest risks in the market, one that will put pressure on the Federal Reserve’s interest rate policy. The Fed needs to see lower inflation levels before it can consider moving forward with rate cuts. » Stay ahead of your finances: Join our free newsletters today 2. US Economic Growth Recovers Slightly in Q1 2026 After delivering weaker growth in Q4 2025, the US economy has rebounded slightly this quarter. This news is positive, as concerns have been growing about slower growth amid geopolitical tensions and higher energy prices. Q1 2026 economic growth was 1.6%, compared to 0.5% in the previous quarter.2 One positive sign in the economy has been the growth in manufacturing activity during the first quarter of this year.3 However, supply-side risks coupled with weaker consumption as inflation picks up could result in lower growth in subsequent quarters. Other regions, such as the EU, have also been cutting their growth forecasts for this year. 3. Consumer Confidence at a New Low The geopolitical shocks in the Middle East have begun to put new stress on consumers, especially since inflation has risen in many regions since the end of February this year. The University of Michigan’s Consumer Confidence Index recently plunged to a 1-year low.4 This tension has been evident in the performance of consumer stocks. We previously touched on how even safer consumer staples giants like Walmart have been facing pullbacks amid weaker 2026 guidance. The Vanguard Consumer Staples Index Fund ETF fell by around 2% this week due to the hazy consumer staples sector outlook. 4. Real Estate Slowdown The U.S. real estate industry is beginning to experience signs of a slowdown this year, as higher financing costs and lower economic optimism have caused housing sales to decline. Recent monthly data from the industry shows that home sales in the United States fell by 6.2% last month.5 Real estate equities have been very sensitive to this stagnating trend. The iShares U.S. Real Estate ETF (IYR) fell by over 2% this week and has had flat performance this month following its mild Q1 rally. This trend is certainly worth monitoring in the coming months, as RE equities and even high-yielding REITs may fall out of favor due to weaker sentiment in the real estate industry. 5. Tech Stock Rally Although many sectors declined during the trading week, tech stocks were the strongest market movers this week. The iShares U.S. Technology ETF (IYW) rallied by more than 3% this week, providing massive support to the S&P 500 as other sectors lagged. Tech giants like Microsoft rallied strongly during the week, and other older dot-com darling stocks like Dell, Cisco, and Nokia have been booming amid new AI optimism.6 Tech stocks are a key driver of the S&P 500, as they have rallied 26% this year and currently account for around 35% of the S&P 500.7 However, it is still important to keep an eye on valuations and monitor the risk of any future pullbacks this year. » Start investing today: Explore top brokerage accounts with our detailed review
Markets This Week: 5 Things to Watch (May 26–29, 2026)
The market ended on an optimistic note this week due to a newly proposed peace agreement between the United States and Iran. However, there are still multiple economic headwinds in the market, including inflation and rate hike risks, which have made investors cautiously optimistic. Some of the top market movers this week included utilities and telecommunications stocks, while major tech giants underperformed. Here are five major developments to keep on your radar. 1. Further Wave of Tech Layoffs AI-driven tech layoffs have remained dominant during the first half of 2026. Meta Platforms recently announced that it plans to eliminate 8,000 employees.1 This is part of a broader trend among many tech companies as they increasingly implement AI. AI-driven job cuts currently account for around 17% of total layoffs in 2026, according to Challenger, Gray & Christmas.2 While April’s Jobs data was encouraging, there are still many weak areas in the labor market.3 Areas like manufacturing and federal employment have experienced strong declines in employees since the beginning of the year. Further layoffs in tech and other traditional industries like manufacturing may result in more unfavorable Job reports in the upcoming months. 2. Weak Consumer Sentiment and Walmart’s New Guidance Consumers are beginning to feel more pressure from tightening economic conditions, and this trend will likely increase as inflation continues to take a toll on the economy. Retail sales growth during the first four months of this year has been encouraging.4 However, some leading retail companies are beginning to lower their guidance amid recent economic and geopolitical tensions. One of the best companies to monitor to track retail sentiment in the United States is Walmart, as demand for its products generally remains more consistent during slower and/or inflationary cycles. However, shares of Walmart fell by 8.7% this week amid its weakened guidance and warnings that it may need to raise prices due to rising fuel prices.5 Even cautious picks like Walmart seem vulnerable as the risks of long-term inflation and stagnation heat up. 3. Positive US-Iran Sentiment Supports End-of-Week Performance The market began to rally during the second half of the week following optimism about peace talks between the United States and Iran. However, Iran has criticized the United States’ excessive demands, and the United States has not finalized any agreement.6 Oil prices fell slightly on this news, and crude oil is currently below $100/barrel. Equity markets performed better on Thursday and Friday due to this news, and could experience pullbacks next week if there are any setbacks with this deal. 4. EU Growth and Inflation Forecast A common risk among global markets is the potential for slower growth and an uptick in inflation. The risk of a stagflationary environment during 2027 is also in the cards. The European Union recently released new economic forecast data, which calls for weaker growth and a new rise in inflation. It is crucial to note that these current projections are still very moderate, as inflation rose much higher in 2022 due to tensions between Russia and Ukraine. H2 2026 could bring much gloomier projections if tensions in the Middle East continue. 5. Utilities Stocks Deliver Stellar Gains Utilities stocks surprised the market this week, significantly outpacing other defensive themes like consumer defensive stocks. According to data from Morningstar, utilities stocks drastically outperformed the broader US market and consumer defensive stocks, too. These stocks outperformed leading tech giants like Meta Platforms, Netflix, Nvidia Corporation, and Microsoft. This signals that the market may be looking for more cautious alternatives as optimism for Mag7 stocks fades. » Start investing today: Explore top brokerage accounts with our detailed review
Markets This Week: 5 Things to Watch
The market was rocked this week by a flurry of economic and political data. Some major developments included new inflation data, changes in Federal Reserve leadership, and rising U.S. Treasury yields. The market swiftly corrected on Friday following a rally during previous trading sessions. The combination of weaker economic data and ongoing political tensions will likely continue to shape equity market sentiment in the upcoming weeks. Below are five major economic and capital market developments this week to keep on your radar. 1. April CPI Report April’s new CPI report came in hotter than expected. The Consumer Price Index (CPI) rose by 0.6% MoM on a seasonal basis, equivalent to 3.8% YoY increase.1 One of the main drivers of this annual increase was the 3.8% YoY rise in energy prices, while all items minus food and energy only rose by 2.8%. Sustained political tensions in the Middle East could produce more unfavorable readings in the upcoming months and would put pressure on the Federal Reserve’s monetary policy. 2. Oil Prices Continue to Rise Amid Geopolitical Tensions Oil prices rose by more than 3% on Friday amid heightened geopolitical tensions in the Middle East. The price of crude oil reached $106/barrel on Friday, representing a 11% weekly gain.2 Oil ETFs rallied by around 3-4% during the trading week. Rising oil prices will likely continue to put pressure on the Fed’s interest rate policy and could also continue to push treasury yields upward. 3. New Federal Reserve Chairman Kevin Warsh has been appointed the new incoming Fed Chairman, following a strong pushback from President Donald Trump on his rate policies.3 The Federal Reserve recently chose to keep rates steady during its recent meeting, due to fears of the consequences of prematurely cutting rates amid the current supply-side and inflationary tensions.4 While Warsh has been more vocally supportive of potential interest rate cuts, the surge in food and energy prices will make this feat difficult in the short term. 4. Rising Treasury Yields and Equity Market Impact The rate on U.S. Treasury yields recently surged to a 1-year high of 4.6% amid new inflationary concerns in the market.5 Additional pressure may force yields back to the previous 2023 high of nearly 5% under the Biden Administration. One important factor to monitor is the impact on U.S. equity markets, which currently track at multi-year highs in terms of valuations. Rising yields may push more investors in the market to prefer treasuries over equities. 5. Semiconductor Boom Reverses This Week Semiconductor stocks posted strong gains during the past week, but began to correct during this trading week. The iShares Semiconductor ETF fell by more than 3% this week, following its massive rally during the previous trading week. However, these equities have rallied by more than 60% YTD, well ahead of the S&P 500 and other sectors.6 Semiconductor giants like Nvidia have historically been some of the main drivers of the S&P 500’s rally. Any setbacks could be detrimental, especially if they are paired with a broad-based correction in tech equities. » Start investing today: Explore top brokerage accounts with our detailed review
Stocks Rally but a Tenuous Ceasefire and High Inflation Loom
U.S. stocks had a strong week on the belief that a resolution to the conflict in Iran might be near. But it’s the impact of the war that’s becoming the bigger story. We’re beginning to see sharp increases in inflation on both the consumer and business sides. With the negotiated ceasefire in Iran looking more fragile by the day, market anxiety remains high. Tip of the Week If you’re concerned about market volatility, high yield savings accounts and short duration Treasury bills offer competitive yields while you sit on the sidelines. These products can be a simple way to earn low risk income while maintaining flexibility. This can be especially important as the markets continue to navigate the current economic and geopolitical uncertainty. » Earn more on your savings: Explore top high-yield savings accounts today Market Moves Weekly Market Snapshot: S&P 500: +3.6% – stocks enjoyed a relief rally on the ceasefire agreement in Iran, but still remain a risky proposition as inflation rates are starting to soar. Nasdaq 100: +4.4% – this past week had a definite risk-on feel to it as tech and growth stocks returned to provide leadership. Russell 2000: +4.0% – stocks moved broadly higher, but the higher sensitivity of small-caps to current economic and political risks remains a concern. VIX: 19.3 – market volatility dropped to its lowest level in 7 weeks as the Iran ceasefire helped stabilize both stocks and bonds. Gold: +1.8% – precious metals continued moving higher as lower interest rates and a weaker dollar provided a boost. 10-Year Treasury Yield: 4.32% – interest rates showed signs of evening out, but the sharp increase in inflation runs the risk of pushing them higher again. Drivers: On one hand, investors enjoyed at least some temporary relief from the Iran conflict. On the other hand, damage to the global economy is already being done. Inflation in the U.S. jumped to its highest level in two years while corporations have indicated a slowdown in activity due to rising input costs. Even though the U.S. economy is still in relatively good shape and corporate earnings growth is strong, the Iran war is going to drive financial market performance for the foreseeable future. Economic Highlights A couple of the notable themes that stood out this week: The non-Ceasefire Ceasefire The markets staged a huge relief rally after a last minute 2-week ceasefire was announced following President Trump’s threat that a “whole civilization will die“. Stocks prices took off, bonds rallied, and oil prices dove. Brent crude is back to trading below $100/barrel and seems to be holding that level. But Israel’s subsequent attack on Lebanon and Iran’s targeting of the East-West pipeline strongly suggest that this isn’t a firm ceasefire likely to hold up. And the Strait of Hormuz is still effectively closed. The markets may have rallied on optimism, but the post-ceasefire events demonstrate that not a lot has changed. Energy prices are likely to remain high. Inflation rates should be expected to keep trending upward. Corporate activity is probably going to show signs of slowing down. All of these are direct impacts of the conflict. Until a detailed ceasefire agreement is formally agreed to and followed by all parties involved, the markets are unlikely to keep any rally sustained. » Start investing today: Explore top brokerage accounts with our detailed review Iran War Triggers Huge Inflation Surge The March inflation report was going to be among the first to detail the tangible impact of the unrest in the Middle East. And it delivered as expected. The consumer price index (CPI) rose by 0.9% month-over-month, the biggest one-month jump since June 2022. The annualized rate climbed all the way to 3.3%, its highest level in nearly two years. Given that the core inflation rate jumped only 0.2%, this increase in prices was almost entirely attributable to rising energy prices.1 Sticky inflation has been an ongoing issue even in the aftermath of the COVID recession. Rate cuts already seemed unlikely this year even before what’s happened in the Middle East. This CPI report could make it almost impossible for the Fed to lower rates, although it still appears to be on the radar for 2026.2 More importantly, this raises the chances that the U.S. economy gets stuck in a stagflationary spiral, one of the worst possible environments. The combination of low growth and high inflation makes it challenging for the Fed to provide much help and could take years to pull out of. » Ready to invest for retirement? Check out our review on the top IRA accounts Inflationary Pressures Start to Slow Business Activity On the surface, the ISM Services PMI report for March looks positive. The reading of 54 marks the 21st consecutive month this sector of the economy has been expanding.3 Beneath the surface, however, there are some causes for concern. The business activity and employment sub-components of the report showed significant declines. The price index also rose to its highest level since October 2022, reflecting the higher costs of fuel and shipping. The slowing down in hiring is something that we’ve been watching in the entire economy for months. It sounds repetitive to say it at this point, but higher prices and slower business activity are the result of events in the Middle East. Giving it a positive spin, geopolitical events tend to be shorter-term in nature and the Iran war could end at any time. When that happens, conditions should return to their pre-war state relatively quickly, although the lag of damage already done could take time. » Want to research further on your own? Explore our top financial tools and resources now U.S. Consumer Sentiment Hits Lowest Level in More Than 70 Years The University of Michigan’s index of consumer sentiment continue to dive to lows the report has never seen. In March, the index hit an all-time low of 47.6, beating the previous record from mid-2022.4 This report was first launched in 1946. Consumer spending levels continue to hold
Stocks Rebound, but Oil and Inflation Risks Keep the Pressure On
U.S. stocks staged a relief rally last week on the hopes that the Iran war could come to a conclusion sooner rather than later. President Trump, however, in an address to the nation suggested that there are still at least weeks to go. Volatility in oil prices and inflation remain the key factors driving the markets. But a higher-than-expected jobs report on Friday adds as many questions as answers to the labor market picture. Tip of the Week If you are keeping cash on the sidelines while oil prices and inflation worries are pushing rates around, a high yield savings account or short-term CD can help you earn meaningful income without taking on significant risk. It’s not exciting, but in volatile markets, it can be useful. » Earn more on your savings: Explore top high-yield savings accounts today Market Moves Weekly Market Snapshot: S&P 500: +3.4% – despite the uncertain messaging coming out of Trump’s national address, investors returned to risk assets with the belief that equities have fallen enough for the time being. Nasdaq 100: +3.9% – the recent correction in tech stocks has brought valuations back to reasonable levels and may be making the sector a compelling buy again. Russell 2000: +3.4% – small-caps finally kept up with the broader market; easing interest rates helped stocks more vulnerable to rate risk. VIX: 23.9 – a reading in the mid-20s still indicates heightened anxiety, but sentiment was definitely less fearful than it has been in recent weeks. Gold: +4.0% – when buyers return to stocks, bonds, and gold at the same time, it’s an indicator that inflation fears are subsiding (at least for the time being). 10-Year Treasury Yield: 4.31% – even as oil prices remain near multi-year highs, investors acted as if the end to the Iran war might be in sight. Drivers: Investors moved back into stocks, bonds, and precious metals as if the Iran conflict is nearing a resolution. We didn’t get a lot of evidence of this and it appears that tensions are still escalating without a definite exit strategy. With the S&P 500 declining by 9% at one point, it’s not unusual to see investors taking any sliver of hope as a reason to be buyers. I’d expect stocks will remain volatile for a while longer yet and further downside risk is still real. We won’t know until next week how the markets will react to Friday’s jobs report. My guess is that it’s another signal that inflation risk is still high. Economic Highlights A couple of the notable themes that stood out this week: Trump Signals No End to the Iran War in National Address When President Trump announced that he was going to address the nation regarding the war in Iran, the initial reaction was bullish. The markets anticipated a possible exit plan or at least a timeline for how long the conflict would last. Instead, there was no timeline. There was just the indication that it would be “weeks” if not longer. Stock futures dropped in the aftermath of the speech and spent the rest of the week moving in a volatile fashion. The biggest threat to the economy will be what it does to inflation. The March inflation report will drop next week and it’s expected to come in at 0.9% month-over-month.1 This would be the biggest monthly increase since 2022, owing mostly to rising energy prices. Stock prices can rise, especially in the current environment where they’re being supported by double-digit earnings growth. If the current conflict does last at least a few more weeks, it seems possible if not likely that inflation could hit 4% and gas prices at the pump could average $4.50 nationally. » Start investing today: Explore top brokerage accounts with our detailed review Jobs Report Delivers Good & Bad News Last Friday’s all-important non-farm payrolls delivered a number that market was hoping to hear. But it came with a caveat. In March, the U.S. economy added 178,000 jobs, the biggest monthly gain since December 2024.2 On the other hand, the February number was revised lower from a loss of 92,000 jobs to a loss of 133,000. It continues a trend going back well over a year where monthly payroll numbers get revised lower as more data comes in. While the March number was a positive, the non-farm payroll report isn’t giving us a sense of direction. Four of the past six months have reported a change of at least 133,000 jobs in one direction or the other. Since the beginning of 2025, the monthly figure has been positive in 9 months and negative in 6 months. This type of whipsaw up and down action doesn’t really confirm an expansion or contraction. The one thing we do know at this point is that job growth isn’t nearly as strong as it has been over the past few years. The more important signal could come from the JOLTS job openings report. It’s showing the number of jobs available back down to post-COVID pandemic levels.3 This signals a lack of labor demand from employers that could be a broader sign of weakness. » Thinking to buy cryptocurrency? See the top crypto platforms today Retail Sales Rebound in Sign of Strength Despite the concerns about inflation, high prices, and affordability, consumers still seem to be in a spending mood. In February, U.S. retail sales shot higher by 0.6% month-over-month.4 That breaks a string of reports going back to September that showed consumer activity had stagnated. There may not be a whole lot to read into with this report. For one thing, the number is lagged by a month compared to other economic data. Second, this report hasn’t really signaled a sharp contraction in consumer activity since the COVID pandemic. For all we hear about consumers broadly tightening up their wallets, we’re still just not seeing it in the data. Granted, the K-shaped economy means that the pain is being experienced in the bottom half while the top
Markets Whipsawed by Iran War Headlines as Stagflation Fears Mount
The Iran conflict continues to dominate the headlines. A Monday rally fueled by ceasefire optimism was quickly undone when Iran denied negotiations were underway. There appears to be some urgency to find a resolution although nothing appears imminent at this point. Stocks, bonds, and precious metals all remain volatile. Oil continues triggering inflation risk. The market is now pricing in rate hikes this year, not rate cuts. Political rhetoric is likely to keep whipsawing asset prices until a more permanent solution in the Middle East is reached. Tip of the Week With markets this volatile, it’s tempting to sit on the sidelines. But if that money ends up sitting in a checking account, you’re losing ground to inflation. Make sure you’re putting your cash to work in a high yield savings account. Some are still earning more than 4%. These can help preserve your purchasing power and help you get paid while you wait. » Earn more on your savings: Explore top high-yield savings accounts today Market Moves Weekly Market Snapshot: S&P 500: -2.1% – geopolitical headlines were the dominant driver all week and keep pushing U.S. equities closer to correction territory. Nasdaq 100: -3.3% – every one of the magnificent 7 stocks is down at least 13% from its all-time high as investors pull away from growth-oriented names. Russell 2000: +0.6% – a rotation from large-caps to small-caps suggests that investors aren’t abandoning equities altogether; this may be where investors are ending up if Treasuries and gold keep falling. VIX: 31.1 – volatility is nearing its highs of the past year; pretty much every major asset class is moving sharply up and down making this a broadly stressful environment. Gold: +0.3% – many view gold as a safe haven asset, but in reality it’s an uncorrelated asset to stocks; that means it pretty much does whatever it wants, which is what we’ve been seeing for weeks. 10-Year Treasury Yield: 4.43% – yields continue moving sharply higher as the Iran war keeps raising inflation expectations and the market prices out any likelihood of a rate cut this year. Drivers: It’s all about the war in Iran right now. The White House is working to control the narrative in order to help lift stocks and bring oil prices back down. But it’s only having mixed success. Conflicting signals out of the United States and Iran has only served to halt short-term rallies and raise volatility further. The range of potential outcomes to this conflict from further escalation to quick resolution makes knowing when to buy and sell right now very challenging. The behavior of Treasuries and gold recently make today look a whole lot like 2022. Back then, there were no true safe havens and investors hung out in defensive equities. Economic Highlights A couple of the notable themes that stood out this week: Stagflation Risk Is Getting Real Stagflation is generally defined as slowing economic growth with rising inflation. It’s pretty much a worst-case scenario for an economy (look back at the 1970s if you want to see what can happen). The Fed, in these instances, is in an impossible position. If it cuts rates to address the growth problem, it can make inflation even worse. If it hikes rates to address inflation, it could sink the economy into recession. This is the situation the U.S. economy is facing right now. GDP growth in Q4 2025 slipped to an annualized rate of just 0.7%.1 The Atlanta Fed’s estimate for Q1 2026 GDP growth has been declining.2 The events in the Middle East and their impact to the global energy market is likely to suppress GDP further the longer it lasts. On top of that, the OECD recently came out with a report saying that inflation was likely to top 4% this year due to events in the Middle East.3 Even if there were to be a resolution in the next couple weeks, the damage that’s already been done to energy stockpiles around the world and global supply chains could take months to unwind. The fact that most of this is being driven by geopolitics makes this very difficult to forecast for investors. The Iran conflict could be over this weekend or it might not be over until this summer, no one knows. We’ll likely see a rally in all asset prices once this war comes to an end. That could take days or it could take months. But the decelerating economic growth and accelerating inflation we’re already seeing won’t disappear soon. » Want automated investing? Explore the best robo-advisors in our detailed review PMI Data Shows U.S. Economy Continuing to Slow The latest PMI data continues to confirm a trend that we’re seeing with data elsewhere – the U.S. economy is still expanding, but it’s doing so at a much slower pace. The March Composite PMI report came in at 51.4 (anything above 50 indicates expansion).4 That’s the lowest reading since April of last year and continues a downtrend that’s been in place since July. The composition of where economic growth is coming from is also changing. For years, the U.S. economy has been services-driven. Now, the manufacturing sector is expanding at a faster pace than the services sector. Manufacturing has been performing steadily over most of the past year, but it’s the services segment that’s slowing. The overall trend, however, is what’s important. U.S. economic growth has been resilient, but the heavily-watched signals, including this and GDP growth, are showing an economy that’s deteriorating. Given the current backdrop, it’s not unrealistic to think that the U.S. could slip into recession later this year. » Stay ahead of your finances: Join our free newsletters today Rate Hikes are More Likely Than Rate Cuts in 2026 One of the things that’s helped push stock prices higher is the belief that the Fed would cut rates multiple times in 2026. Lower rates and looser monetary conditions are supportive of growth and that would help the S&P 500 to continue setting new
Fed Holds Steady as Oil Shock Keeps Markets on Edge
The markets didn’t get a whole lot of good news this past week. The conflict in Iran and the fallout in the energy space don’t look like they’re going to end any time soon. Inflation risk continues to grow and that’s virtually priced out any possibility of a rate cut in 2026. Overall market sentiment could be described as nervous but not panicky. Even though the major U.S indices slipped to 4-month lows, they’ve done so in a relatively orderly fashion. Tip of the Week If this week reminded you about how quickly inflation fears can escalate, consider adding TIPS to the fixed income sleeve of your portfolio. Their yields adjust to inflation rates and can provide protection against the rising rates that often happen in these scenarios. Short-term TIPS can limit share price volatility while maintaining the purchasing power of your cash. » Looking for a guaranteed income? Explore today’s top CD rates Market Moves Weekly Market Snapshot: S&P 500: -1.9% – stocks remain under pressure due to events in the Middle East, but the latest inflation readings at home don’t paint a supportive picture for risk assets. Nasdaq 100: -1.9% – tech stocks as a whole held up a little better than the broader market, but the overall tone of the sector remains one of caution. Russell 2000: -1.8% – higher interest rates are likely to hit small-caps harder than large-caps, which helps explain why the group has lagged over the past month. VIX: 26.8 – volatility is still elevated as it has been all throughout March, although we still haven’t seen the big spike that would signal panic from investors. Gold: -10.2% – hawkish commentary from several global central banks coupled with higher Treasury yields have weakened the attractiveness of precious metals. 10-Year Treasury Yield: 4.38% – this yield touched its highest level since August as the markets priced out Fed rate cuts for 2026 and most of 2027. Drivers: Oil prices and the Iran conflict are the primary market drivers. Right now, oil prices have steadied around the $95-100 range for WTI crude, but expect prices to continue trending higher the longer the war drags on. The Fed is in a tough spot. Oil spikes due to geopolitical events tend to be transitory in nature. Raising interest rates to counter the inflationary effects could do more damage than good if you address a short-term problem with a long-term solution. A de-escalation of tensions would very likely trigger a relief rally in both stocks and bonds, but it’s really tough to say when that might happen. Economic Highlights A couple of the notable themes that stood out this week: The Iran Situation Continues to Get Worse The markets were initially expecting the U.S.-Iran war to be relatively short-lived. So far, it’s been anything but. The strikes continue, the Strait of Hormuz remains virtually closed, and tensions seem to be getting worse, not better. Iran’s willingness to make one of the world’s primary shipping lanes impassable puts a lot of pressure on the United States to find a fast resolution before oil prices rise much further. The Trump administration’s instruction not to bomb any oil infrastructure facilities would seem to be an acknowledgement of this. The markets still don’t seem to be anticipating this to be a lengthy conflict. This could explain why stock prices haven’t dropped more sharply than they have. That could still very well be the ultimate outcome here, but little progress has been made getting there so far. The United States is relatively energy-independent, so it’s better prepared to handle a supply disruption. Europe, on the other hand, isn’t. The real energy crisis could happen over there first and perhaps drag other world leaders into the conflict in order to broker a solution. As is the case with the majority of geopolitical dust-ups, conditions will probably begin reverting back towards their pre-war state with a resolution, but it may not get all the way back for a while. The fallout from what’s already happened is unlikely to be unwound quickly. That could keep the pressure on stock and bond prices for a while. » Need to setup an emergency fund? Explore top high-yield savings accounts today The Fed (and Other Central Banks) Turn More Hawkish In a surprise to no one, the Federal Reserve held rates steady for the 3rd consecutive meeting. But the market’s expectation for interest rates for the remainder of 2026 was changed significantly. Following this past week’s meeting, the futures market is pricing in just a 4% chance of a rate cut this year (this number was at 95% one month ago). The earliest that it’s pricing in a greater than 50% chance of a rate cut is the October 2027 meeting.1 As mentioned, it’s unclear if this would be a policy mistake or not. Inflation is clearly still a problem as evidenced by this past week’s producer price index (PPI) report (more on that in a moment). But it might not be a good idea to consider raising rates in response to what could be a temporary event. Raising interest rates beyond what the data currently warrants could actually swing the economy towards recession. If the current stagnation in the labor market and slowdown in GDP growth last quarter are signs of a downturn already in progress, 1-2 rate hikes in 2026 could end up accelerating the pace of deterioration. This is one of the biggest reasons why a stagflationary economy is particularly damaging to the markets. The Fed can’t address slowing growth (which warrants rate cuts) at the same time as rising inflation (which warrants rate hikes). It has to pick a lane and hope the one they don’t choose doesn’t do too much damage. The U.S. economy today is starting to head in that direction. The markets thus far have largely been able to handle it, but the next 6-12 months could be very telling. » Want to research further on your own? Explore our top
Oil Shock Rattles Markets as Inflation Fears Return
Stocks spent most of the week getting whipsawed around. The ongoing conflict in Iran, the closure of the Strait of Hormuz, and volatile oil prices are making investors think twice about how much risk they’re willing to take here. Higher energy prices could end up slowing future growth and make it difficult for the Fed to cut rates. The markets began pricing in the possibility of no rates cuts in 2024, while a big downward revision to Q4 GDP growth signals that the economy may be decelerating faster than expected. Tip of the Week When market volatility begins to increase, it can help to maintain a diversified portfolio across multiple asset classes. Instead of being heavily allocated to tech and growth stocks, a portfolio consisting of stocks, bonds, gold, real estate, and crypto can help reduce overall volatility and take advantage of the fact that different asset classes can behave in different ways at different times. » Start investing today: Explore top brokerage accounts with our detailed review Market Moves Weekly Market Snapshot: S&P 500: -1.6% – stocks gave up gains of more than 1% earlier in the week as oil prices surged and rate cut hopes diminished. Nasdaq 100: -1.1% – tech stocks held up better than the broader market for the second straight week, but energy market volatility could ultimately cap short-term outperformance. Russell 2000: -1.9% – inflation risk and higher interest rates tend to hit small-caps harder and that’s exactly what we’re continuing to see here. VIX: 27.2 – volatility has been on an uptrend all throughout 2026; while this reading is down slightly from last week, it’s well within the range that signals some investor fear. Gold: -2.8% – declines in stocks, bonds, and gold at the same time indicate that safe havens aren’t providing any protection; this is common in higher inflation regimes. 10-Year Treasury Yield: 4.28% – yields move sharply higher as new inflation fears got priced into the bond market. Drivers: This past week was all about oil prices and interest rates. If the war in Iran persists indefinitely, we’re likely to see continued volatility in all asset classes. Inflation has moved back to the top of the list of the markets’ concerns and that probably won’t change until we see a de-escalation in the Middle East. At this point, old data, such as last week’s February CPI reading, are likely to be ignored as investors try to assess more current events. The market is trading on headlines and we won’t know the full impact of Iran on the data for a few more weeks. Economic Highlights A couple of the notable themes that stood out this week: Crude Oil Hits $100; Bloomberg Makes the Case for $160 The conflict in Iran and the corresponding energy supply disruption remain the key short-term drivers for the markets. Roughly 20% of the world’s total petroleum liquids supply, roughly 20 million barrels per day, runs through the Strait of Hormuz before reaching its final destination. Iran’s response to effectively close off the route has sent energy prices soaring. More importantly, there’s no finish line in sight. Brent crude oil shot as high as $120 per barrel in the initial escalation before retreating. By the end of the week, they were back above $100 as the market anticipates a lengthier supply disruption. This, of course, has many ripple effects. At the consumer level, $100 oil would probably translate to gas prices around $3.50 per gallon, give or take. If it moves up to $120, we’re probably looking at $4 a gallon. This would cause a severe pinch to consumers who are already dealing with affordability issues and running up a lot of credit card debt. It will also impact inflation rates. When those move higher, Treasury yields and other rates often move higher as well. As inflation rises, the odds of rate cuts diminish. More on that in a moment. Bloomberg issued its own set of expectations for the crude oil market. It said that a one-month closure of the Strait of Hormuz would lift oil to $105. A two-month closure could push it to $140 and a three-month closure could lift oil beyond $160.1 We’re already about two weeks into the current closure. The longer the Strait remains impassible, the more it impacts consumers, the more it raises inflation rates, and the more it negatively impacts overall GDP. CPI Moderates in February; The Markets Wait for March In February, the consumer price index (CPI) rose by 2.4% year-over-year, in line with expectations, while the core rate came in at 2.5%.2 This, however, was perhaps one of the most inconsequential inflation reports in recent memory. Market participants are only interested in the impact of the March oil shock, so this report generated little reaction. The January PCE price index report, which is even more delayed, showed a 2.8% year-over-year increase.3 That number is the one the Fed uses and more accurately reflects what the board members will base their decisions on. Either way, the market’s general interpretation is that this data is stale and, for one month at least, doesn’t hold a lot of sway. » Boost your savings: Explore the best savings and CDs with Raisin Q4 GDP Gets Revised Significantly Lower About a month ago, the street was expecting a Q4 2025 GDP growth print of +3.0%. When the first estimate was released last month, it came in at a much lower 1.4%. When the second estimate dropped this past week, that number was cut in half to 0.7%.4 Revisions are typically very minor, maybe 0.1% in either direction. Which is what makes the 0.7% downward revision that much more curious. It looks like a decrease in government spending might have been the big culprit, but this raises a larger question. Could the U.S. economy be slowing faster than we realize? We’ve already seen a significant slowdown in the labor market. There are ongoing concerns about affordability. It’s far too early to suggest that
Iran War, Jobs, and Inflation Fears Trigger a Global Sell-Off
The financial markets suffered through a rough week as stocks, bonds, and gold all finished sharply lower. The ongoing conflict in Iran coupled with a much weaker than expected jobs served to turn up market volatility and put a number of market levers in motion. For now, the focus isn’t on individual companies or market sectors. It’s about how geopolitics and labor market dynamics could damage the macroeconomic environment. Tip of the Week If this past week made you uncertain of what to do next, it’s a good idea to think about how a high-yield savings account could be part of your planning process. Whether you’re building up your emergency fund or just looking for a place to lay low when market conditions get rough, earning a competitive return with your idle cash can be a win for your portfolio. » Earn more on your savings: Explore top high-yield savings accounts today Market Moves Weekly Market Snapshot: S&P 500: -2.0% – the war-driven selloff continued throughout the week and was pressured by rising oil prices, inflation concerns, and Friday’s unexpectedly weak payroll report. Nasdaq 100: -1.2% – tech stocks actually held up pretty well last week even though every one of the magnificent 7 stocks is in the red on the year. Russell 2000: -3.9% – small-caps continue to sharply walk back their strong start of the year and are now only narrowly outperforming the S&P 500 year-to-date. VIX: 29.5 – volatility is near levels we haven’t seen since Liberation Day; the markets are fearing a lengthy conflict in the Middle East that could disrupt global trade for weeks. Gold: -2.3% – the fact that gold moved lower even as stock prices fell could be a sign that investors are selling more broadly and not just selectively. 10-Year Treasury Yield: 4.14% – yields shot much higher this week after the conflict in Iran and subsequent disruptions to the energy raised inflation fears. Drivers: Market sentiment is being heavily driven by the geopolitical backdrop. The markets reacted initially as if this were going to be a short-term event. As it drags on further with no apparent end in sight, investors grow more weary of its impacts, including energy disruption and higher inflation risk. Those factors drove losses in all of the major asset classes even as some of the latest data indicated strength in the U.S. economy. The February non-farm payroll report, however, shows that companies are still pessimistic and recession risk is elevated. Economic Highlights A couple of the notable themes that stood out this week: The Iran Conflict and All of Its Side Effects The war in Iran has thrown a wrench into the U.S. market and economic outlook at a time where there was already plenty to think about. The most visible impacts came on the inflation and energy fronts. The Strait of Hormuz, a major shipping lane through the Middle East, has come to a virtual standstill and several countries in the region have already altered their production and trade plans. Supply chain disruption risk has already spooked the energy markets and threatens to undo recent progress made on pricing pressures. Treasury yields moved sharply higher in response to increased inflation risk and offered no protection for investors seeking a safer spot for their money. Brent crude oil prices, which started the week around $70 a barrel, were up to $92 on Friday. That’s the highest they’ve been since September 2023.1 This is a fairly standard reaction to geopolitical pressures, but the sharper than average rise in oil prices demonstrates how the markets believe this conflict will be longer, not shorter. This is not the thing that consumers need right now either. Shortly, these higher oil prices are going to trickle down into gas prices. Any sharp increase at the pump is going to impact consumer behavior at a time when many are already struggling to make ends meet. » Want to research further on your own? Explore our top financial tools and resources now The Jobs Market Goes from Concerning to Potentially Threatening The February ADP employment report, which measures private sector activity, showed a solid 63,000 job gain and created optimism for Friday’s headline non-farm payroll report.2 The momentum didn’t carry over though and the NFP report delivered a 92,000 job loss. That was way below expectations for a gain of 59,000 and the 5th time in the last 9 months that this figure has been negative.3 The U.S. labor market is clearly in some trouble here. Wage growth and job quits data are showing the same thing. A few years ago, workers were able to secure big pay increases by changing jobs in a tight labor market. Today, workers are clearly hanging on to the jobs they have because 1) there’s little financial incentive without the salary increase potential and 2) they’re hanging on to what they have due to the uncertainty that comes from being low on the totem pole elsewhere. This kind of jobs market stagnation is what we often see historically in recessionary periods. GDP growth, the most common measure of whether or not the U.S. economy is in recession, still looks fine for now. But there are enough warning signs to suggest that this could change quickly in the not so distant future. » Work with expert advisors: See how Vanguard Personal Advisor can help The Comeback in the Manufacturing Sector There was some positive news this week though. The ISM Manufacturing PMI report showed solid expansion in this sector for the 2nd straight month, something that we haven’t seen since mid-2022.4 Ever since we came out of the COVID area when people spent all of their free money on “things” because everything was closed, the manufacturing sector has struggled. Consecutive months of strong growth in the sector tend to, historically at least, be sticky. The report delivered everything you’d want it to as well – growing imports, growing exports, growing new orders. Employment was on the weaker side,
The AI Doom Trade Grips The Markets
The markets spent last week bouncing between two narratives – the uncertain direction of U.S. trade policy following the Supreme Court’s decision to strike down the Trump tariffs and the ongoing AI doom trade. The stock market overall still looks fairly strong, although gains aren’t coming from the areas that investors are used to. Fear levels continue to slowly creep higher as the market tries to figure out who ultimately benefits from the emergence of AI and which businesses and sectors are most at risk. Tip of the Week This past week was a good reminder that markets can shift quickly on headlines, even when the economy overall is still expanding. If you still need a cushion of safety by building up cash in your portfolio or emergency fund, consider moving this money to a high-yield savings account or a short term CD ladder so it earns real interest while staying accessible. » Earn more on your savings: Explore top high-yield savings accounts today Market Moves Weekly Market Snapshot: S&P 500: -0.4% – the broader market looks better than the major averages would suggest, but it’s clear that the market is growing more nervous. Nasdaq 100: -0.3% – tech was one of the big losers of the week; even a blowout earnings report from NVIDIA isn’t enough to sooth the market’s nerves. Russell 2000: -1.3% – this is classic risk-off behavior where investors shy away from the smaller, more vulnerable companies in times of uncertainty. VIX: 19.8 – volatility has been slowly but steadily ticking higher throughout 2026, not yet enough that it’s triggering a fear signal but more than enough to show that these are becoming more tense times. Gold: +3.4% – gold prices lock in their 7th straight monthly gain; safe haven trades maintain their appeal amid geopolitical and technological uncertainty. 10-Year Treasury Yield: 3.96% – this yield broke below 4% for the first time since November as investors seek out safety due to AI fears gripping the market. Drivers: The markets spent most of 2025 pricing in the upside of AI. Now it’s starting to price in the downside. There’s a lot of gloom and doom out there right now, but in reality, we still don’t know where the equilibrium will be. Some sectors, such as software, are being priced like the world is ending. But these rotations are part of the process. Concerns about the state of global trade and inflation are real factors that are likely to hang over the markets for a while. But corporate earnings still look good and that’ll add long-term support for stocks as long as that can sustain. » Watch this: Why Trying To Time The Market Could Cost You Thousands Economic Highlights A couple of the notable themes that stood out this week: Where Do We Stand With Tariffs? The decision by the Supreme Court to strike down most of the Trump tariffs was considered likely, but the ending impact is still unclear.1 The decision to immediately implement a global tariff of 10%, which was soon raised to 15%, shows that this issue isn’t likely to go away anytime soon. The real implication might be the United States’ relationship with its global trade partners. Many countries are already diversifying away from their dollar exposure by increasing trade with other partners. China has been a beneficiary of such shifts, but Russia, India, and Brazil have also strengthened their non-U.S. trade relationships over the past year. The Supreme Court decision should help to ease some pricing and inflation pressure in the near-term, but the Trump administration is still very clearly focused on efforts to reshore American business, whether that’s through tariffs or some other means. That’s likely going to keep inflationary pressures elevated. » Data-driven stock picks: Test out Alpha Picks by Seeking Alpha now Another Inflation Reading Shows Price Pressures Aren’t Slowing Down The January producer price inflation report was released on Friday and it shows that inflation is still sticky and stubborn. It rose by a higher-than-expected 0.5% month-over-month, bringing the annualized rate to 2.9%. The core PPI rate came in at 3.4%.2 When the more popular CPI inflation measure dropped unexpectedly in January, the markets reacted as if this number would finally begin to approach the Fed’s 2% target. Since then, we’ve gotten a PCE report that ticked up to its highest level in nearly two years. And this report, which shows producer prices still on the rise and often trickles down into consumer prices. If you look at the Fed Funds market, it’s still pricing in two rate cuts later this year as it has for months. The rhetoric, however, is shifting. Jerome Powell has indicated in recent speeches that he’s in no hurry to cut rates as long as inflation is problematic. Governors Williams and Goolsbee have also indicated a preference to keep rates where they are. Equities have long responded positively to lower rates and have to some degree been pricing in the expectation of rate cuts to stocks. Without that, they may begin losing a tailwind as we head further into 2026. » Reduce your tax burden: Explore the best tax relief services Home Prices Rise But Mortgage Demand Slumps; Is the Housing Market Facing a Reckoning? The Case-Shiller Home Price Index showed a modest 1.4% year-over-year increase in December.3 That’s not a surprising finding since we know that home values have been increasing for a while. But the current imbalance in supply and demand is increasing the risk that one of the two may soon have to give. Home prices have actually declined in most months recently. But that’s a common phenomena that’s occurred in the second half of the past several years. But this could also be a product of declining demand. The 30-year mortgage rate just fell below 6% for the first time since 2022.4 The MBA Mortgage Index just slipped to its lowest level since January.5 Pending home sales numbers have been depressed. This points to a real concern
Stocks Remain Solid Even as GDP Data Disappoints
The broadening out of U.S. stock market returns continues, but it’s the direction of the economy that’s beginning to raise more questions. Inflation is showing signs of increasing while the first read on Q4 GDP missed expectations badly. Stock prices may be able to sustain on the back of gains from value and non-tech areas of the market, but weaker growth, a slowing labor market, and elevated inflation are the kinds of conditions that should have investors taking a cautious tone. Tip of the Week 2026 is seeing the greatest percentage of stocks beating the S&P 500 in the past 50 years. But you might not realize that if you’re heavily overweight in tech, AI, and the magnificent 7 stocks. Diversification should still be a goal for long-term portfolio allocations. It can help smooth out volatility, help prevent drawdowns, and provide a source of positive returns when other areas of your portfolio are underperforming. » Start investing today: Explore top brokerage accounts with our detailed review Market Moves Weekly Market Snapshot: S&P 500: +1.2% – market volatility ticked up a bit on Friday following the GDP and PCE data, but stocks stabilized and held on to gains. Nasdaq 100: +1.7% – tech stocks made a rare return to leadership this week, but the majority of the mega-cap names are still down year-to-date, acting as a significant drag on the major indices. Russell 2000: +0.5% – outperformance from tech & growth coincides in lagging performance from value-oriented small-caps, but this group is still gaining. VIX: 19.1 – volatility levels aren’t necessarily flashing warning signals right now, but they’re elevated enough to suggest there’s still lingering tension in the markets. Gold: +4.0% – gold prices resumed their climb in the second half of the week and are back above the key $5,000 level. 10-Year Treasury Yield: 4.09% – Treasury yields ticked up slightly higher following last week’s higher-than-expected inflation number, but they’re still hovering within a fairly tight range. Drivers: Up until Friday, there wasn’t a lot of major news to trade on, so stocks drifted higher. Market breadth hasn’t been this positive in years and is being somewhat overshadowed by the lackluster performance of the major averages. In reality, most stocks are doing fairly well this year, but you’d need to be invested outside of mega-cap tech to realize it. The magnificent 7 stocks were pulling the indices higher despite weak breadth over the past few years, but the opposite is happening now. The indices are being held lower by those stocks despite strong breadth. » Easily track your finances: Try the free Empower personal dashboard Economic Highlights A couple of the notable themes that stood out this week: Q4 GDP Comes in Way Below Expectations; Is the Economy Actually Slowing? The Bureau of Economic Analysis (BEA) released its first read on Q4 GDP on Friday and it wasn’t good. The 1.4% growth rate was a significant drop from the 4.4% increase last quarter and well below expectations calling for a 3% annualized growth rate this quarter.1 The 6-week government shutdown will likely receive a lot of political blame for the slowdown, but the causes are fairly widespread. Government spending shrunk by 1% during the quarter, which was probably heavily influenced by the shutdown. Net export activity, which was expected to be a big growth driver, instead came in flat. Consumer spending held tough overall, but expectations for a larger contribution there slipped as the quarter wore on. Investment provided a minor boost. A few thoughts on this: The government shutdown almost certainly hurt GDP in Q4. It’s difficult to quantify, but it’s probably not as significant as feared. A lot of AI infrastructure spending by the big tech companies is very likely contributing to GDP growth rates over the past couple quarters. That likely continues into 2026, but could slow sharply towards the end of the year. Consumer spending is still holding up for now, but there are signs elsewhere that it’s being driven by more debt, not necessarily more income. » Trusted research and data: Access Morningstar’s expert insights with a free trial The Fed’s Preferred Inflation Measure Shows Prices Are Increasing at a Faster Pace The markets cheered the CPI earlier in the month that showed a surprisingly sharp drop in inflation. The PCE report, which is the Fed’s preferred inflation measure, suggested the opposite. The headline rate ticked up to 2.9% in December, higher than expected, and hit its highest level since March 2024. The core rate moved up to 3%, its highest reading since April 2024.2 There are a couple of conclusions to make here. First, it appears that inflation is still sticky and stubborn. But we do have to consider that the CPI report came from January and this report is for December. Next month’s PCE report could very well mirror the decline we saw in the CPI. But the core economic issues remain. Consumers are struggling with affordability and it’s still unknown when they’ll get sustainable relief. Second, it’s going to be awfully difficult for the Fed to lower interest rates anytime soon. Recent statements from Jerome Powell have intimated that the central bank is more concerned with inflation than growth right now. That means a greater likelihood they’ll keep rates elevated to solve that issue barring a sudden collapse in economic growth. » Work with expert advisors: See how Vanguard Personal Advisor can help Trump Tariffs Get Struck Down by the Supreme Court The odds were favoring this outcome, but we got the official decision from the Supreme Court on Friday.3 Because it was at least somewhat expected, the market didn’t have a significant reaction. But it will improve the economic picture. U.S. companies importing foreign goods should see immediate cost relief and that will improve their financial outlook. It should also take pressure off of tariff-linked inflation concerns that threatened to make things more unaffordable for consumers. U.S.-Iran Tensions Grow; Oil Hits 8-Month High The pressure from the White House
AI Anxiety Creates A Confusing Mix of Market Emotions
Overall market sentiment has shifted rapidly from how AI is going to change the world to how many areas of the market AI is going to damage. In recent weeks, we’ve seen sharp pullbacks in software, financials, and real estate as AI angst takes over. On the other hand, a lower than expected CPI reading is moving expectations from “soft landing” to “no landing” as GDP growth and unemployment continue to hold off. It’s becoming a very bifurcated market where the major averages remain resilient and non-tech outperforms, but individual cases of major stock price damage are emerging. Tip of the Week With market volatility starting to increase, it’s important to keep your “ready cash” in a safe place. High yield savings accounts provide yields of 3% or more, yet remain liquid enough that they can be put work at a moment’s notice. But keep your emergency fund separate. You’ll want to make sure that money is always on standby and away from risky investments if you ever need it. » Earn more on your savings: Explore top high-yield savings accounts today Market Moves Weekly Market Snapshot: S&P 500: -1.4% – mega-cap tech continues to drag the major averages lower, but defensive equities, including utilities, consumer staples, and value are delivering big gains. Nasdaq 100: -1.4% – any area of the market that might be disrupted by artificial intelligence, tech or otherwise, is getting hit hard right now. Russell 2000: -1.1% – small-caps declining right alongside large-caps tends to be indicative of a deeper risk-off mood starting to set in. VIX: 20.6 – volatility continues to move higher as the “AI damage” trade has investors scrambling. Gold: +1.5% – gold price volatility has settled down somewhat, but Treasuries finally demonstrating some buying activity along with this moving higher would suggest building momentum for the safe haven trade. 10-Year Treasury Yield: 4.05% – Treasury yields finally broke sharply lower thanks to lower than expected inflation and growing fear from market participants. Drivers: We’re beginning to see more of the broader risk-off shift we talked about last week. The biggest development: Treasury yields moved sharply lower, exactly the type of behavior you’d expect to see as investors begin to panic. The other concern we see is which areas of the market are leading. Utilities, consumer staples, and value are all outperforming by a wide margin this year. Gold is still up more than 10% year-to-date and tech is approaching correction territory. A surprisingly strong jobs report this week and the positive move in inflation aren’t doing much to calm investor nervousness. » Analyze different investment portfolios: Try StockRover’s 2-week free trial today Economic Highlights A couple of the notable themes that stood out this week: The Start of a Disinflationary Trend? The market finally got some good news on the inflation front. January CPI fell to a 2.4% year-over-year increase, below expectations and the lowest reading since May.1 The street has been worried about the impact of tariffs for more than a year now, but we’re still failing to see a meaningful and sustained spike in prices. Lower gas prices are a big driver, but we’re also seeing moderation in food and shelter prices, two areas that have a major impact on perceived affordability. One thing we’re watching is the latest Truflation index, which is a relative recent alternative inflation measures that was “born out of the need for more accurate and timely financial data”. It’s been showing the U.S. economy in a disinflationary trend since the 2nd half of 2025.2 In 2022, the Truflation measure showed a similar trend months before the CPI data caught up. We just saw a sharp drop in the January CPI, but is there a much bigger drop ahead? If so, we’re probably looking at greater odds for rate cuts later this year, a drop in Treasury yields and perhaps a catalyst for higher stock prices as long as the impetus for such a move is a rapidly slowing economy. » Stay ahead of your finances: Join our newsletters today Jobs Report: Strong Start to 2026, But A Miserable Finish to 2025 The U.S. labor market has been a major question mark for several months. Slowing job creation and falling job openings strongly suggest that business activity is slowing and companies are trying to trim labor costs. Since job market trends tend to be strongly correlated with recession risk, this has been on the radar of market watchers for some time. In January, however, we got some good news and bad news. Non-farm payrolls jumped by 130,000 last month, well above expectations for a roughly 70,000 increase and the highest monthly increase since December 2024.3 On the downside, the U.S. economy added just 181,000 jobs total for the full year 2025. That’s a pretty miniscule number in aggregate and shows that the U.S. job market has largely stagnated. Monthly reported numbers often get revised lower in subsequent months once more data comes in, so it’s too early to say that the labor market is rallying again. It’s a good sign for resilience, but also a sign that the economy is teetering perilously close to contracting. » Work with expert advisors: See how Vanguard Personal Advisor can help Consumer Spending Shows Signs of Cracking One of the big themes of the past year has been how resilient consumer spending has been despite rising debt levels and complaints about affordability. It turns out that maybe you can’t escape the trend after all! U.S. retail sales growth came in flat in December compared to the same month a year and dropped to 2.4% year-over year, the lowest rate of growth since September 2024.4 A couple of things worth noting here: December is generally the most important month of the year to watch since that covers the holiday shopping period. If sales were flat compared to last year, that means that consumers actually bought fewer things (accounting for higher prices in 2025 vs. 2024). That’s not the direction we
The Risk-Off Trade Gets More Serious
The markets grew increasingly unstable this week. The AI trade is beginning to turn ugly, the tech sector has become the biggest laggard of 2026 and the crypto market is in a full-on crash. Add in the fact that Treasuries aren’t behaving like a safe haven and there are real questions about where investors should put their money right now. Without a notable economic catalyst to blame this past week, this looks like a broad de-risking where previous winners have become vulnerable. Tip of the Week The markets in 2026 have taught us that diversification is still important. Those who have overweighted tech in their portfolios are likely seeing significant underperformance now. Consider adding exposure to value, low volatility, dividend, small-cap, and international stocks to balance out some risk. » Start investing today: Explore top brokerage accounts with our detailed review Market Moves Weekly Market Snapshot: S&P 500: -0.1% – a relatively modest loss for the index masks a gap of around 9% between the best and worst performing sectors, a level typically hit only a few times a year. Nasdaq 100: -2.2% – Google and Amazon led the index lower as announcements of increased AI spending were not welcomed by investors. Russell 2000: +2.3% – most other areas of the market outside of large-cap growth actually did quite well this week, proving that diversification still matters. VIX: 17.8 – before calming down on Friday, the volatility index briefly touched 23, a level not hit since around Thanksgiving of last year. Gold: +2.4% – the excessive volatility in precious metals still isn’t over; gold has at least stabilized to some point but silver is still moving sharply lower. 10-Year Treasury Yield: 4.21% – Treasuries are still failing to act as a safe haven asset with long-term yields hovering in a tight range. Drivers: Investors clearly seem no longer willing to blindly bet on crypto, tech, and AI stocks. Considering the positive performance of so many market sectors last week and the fact that Treasury yields still aren’t budging suggests that this is still a major market rotation as opposed to a pure sell-off. Let’s not forget though that volatility spikes can still push investors towards the exits. If we start to see stocks sell off broadly and Treasury yields move lower, it would be time to get more concerned. » Reduce your tax burden: Explore the best tax relief services Economic Highlights A couple of the notable themes that stood out this week: Crypto Crash As of Thursday’s market close, Bitcoin’s price had fallen by around 50% from its October peak. It had been stabilizing around the $90,000 level for the past couple of months before the bottom fell out this past week. This move looks closely linked to the AI trade. We saw the stock prices of Amazon and Google take a hit last week on the news of more AI spending ahead. Software stocks have been brutalized on the belief that AI is going to render much of it unnecessary at some point. That leads to two conclusions: 1) investors are beginning to believe that there’s such a thing as too much AI spending and companies aren’t going to get an adequate return on investment from it and 2) investors are now focused on areas of the market that will be damaged by the emergence of AI. The idea of general AI optimism is no longer going to generate automatic returns for tech stocks. Mega-cap tech was an area of the market vulnerable to a pullback and we’ve begun seeing that play out. On a positive note, investors appear to be sticking with equities overall, just a different group than the one that’s gotten all of the attention lately. » Stay ahead of your finances: Join our newsletters today The Labor Market Shows Further Signs of Trouble The brief government shutdown is pushing the highly watched non-farm payroll report for January into next week. But that doesn’t mean we didn’t get plenty of job market data to work with. Unfortunately, a lot of it wasn’t good. The monthly ADP employment report, which measures private sector job growth, showed only 22,000 jobs added in January, about half of what was expected.1 In 2024, the average monthly gain was around 64,000 but slipped to around 33,000 last year. This continues the trend of the labor market managing to stay out of contraction but also stagnating on a month-to-month basis. The December JOLTS job openings report fell to its lowest reading since summer 2020.2 With this number and the new hires rate both hitting multi-year lows, it appears that hiring managers are essentially putting a freeze on new headcount. The national unemployment rate, however, suggests that mass layoffs aren’t happening either though. Without job growth, the economy could soon struggle to keep expanding. » Ready to invest for retirement? Check out our review on the top IRA accounts The “Magnificent 7” Is Not So Magnificent We’ve mentioned the performance of Google and Amazon this past week already. It’s worth reiterating though how much sentiment has turned against tech and AI stocks over the past week. Technology is the worst-performing sector year-to-date. The magnificent 7 stocks collectively have performed even worse. The 2nd and 3rd worst performers of 2026 so far are consumer discretionary and communication services, both of which house at least one mag 7 stock. This trend goes all the way back to November, but it’s really picked up speed in the past week. The Nasdaq 100 and the tech sector are only about 4% and 7% off of their all-time highs, respectively, so the overall damage still isn’t too bad. But valuations and sentiment are problems right now. » Trusted research and data: Access Morningstar’s expert insights with a free trial The Week Ahead A few themes to watch next week: As mentioned, the January non-farm payrolls report drops on Wednesday. Expectations are for another modest 50,000 job gain with the unemployment rate ticking up to 4.5%.
The Return of Volatility and the Fed Gets a New Chair
The S&P 500 touched 7,000 for the first time on Wednesday morning before volatility took over. Microsoft, Tesla, and Meta Platforms all experienced huge price swings following their quarterly earnings reports. Gold & silver whipsawed wildly throughout the week. And we got the announcement that Kevin Warsh will be nominated as the next chair of the Federal Reserve. The markets continue to experience a wide range of sector-level returns as 2026’s market rotation deepens. Tip of the Week If market volatility has you uneasy, a high yield savings account can be a good option for lowering overall portfolio while still capturing a 3-4% yield. Small shifts can help keep your overall risk in check and prevent the temptation to move to all cash and risk long-term returns. » Earn more on your savings: Explore top high-yield savings accounts today Market Moves Weekly Market Snapshot: S&P 500: +0.3% – a relatively modest gain for large-cap stocks hides a lot of volatility building up in certain sectors underneath the surface. Nasdaq 100: +0.0% – the tech-heavy index continues to be an average performer in 2026 as investors check out value and defensive stocks instead. Russell 2000: -2.1% – the strong rally that kicked off the year is facing a reversal; higher volatility tends to hit small-caps harder than most. VIX: 17.5 – volatility levels calmed towards the end of the week, but the index nearly hit 20 at one point for only the second time since Thanksgiving. Gold: -2.5% – this was up 12% on the week by early Thursday, but a huge volatility spike in the metals market erased those gains for gold, silver, and copper by the end of the week. 10-Year Treasury Yield: 4.24% – even though there was wild volatility in commodities and the VIX briefly shot higher, investors still don’t seem terribly interested in using Treasuries as a safe haven. Drivers: The Fed held rates steady, which was expected, and the market had little reaction. The parabolic rise and crash in precious metals is creating some instability, but mega-cap tech earnings are what drove market action this week. The market increasingly wants to see results from all of that AI spending. Meta was able to deliver those results in the recent quarter, Microsoft showed a slowdown, and both stocks reacted violently. Fundamentals are looking like they’re slowly starting to matter more and more. » Analyze different investment portfolios: Try StockRover’s 2-week free trial today Economic Highlights A couple of the notable themes that stood out this week: The Fed Holds Rates Steady & Doesn’t Deliver Any Surprises The market had been pricing in almost no change of a rate move from the Fed and that’s exactly what it delivered. For the fifth straight meeting, the decision was not reached by consensus, as Governors Miran and Waller both voted for a quarter-point move.1 We haven’t seen this kind of lengthy disagreement within the Fed board since 2019 when they were struggling to figure out how to properly resume normal policy conditions. The other thing that Jerome Powell didn’t do was show any indication that the Fed was in any hurry to lower rates. In his statement, he referred to inflation as “elevated” but the unemployment rate as showing “some signs of stabilization”. Given that the jobless rate is still at 4.4%, neither of these statements taken in isolation indicates that the Fed is prepared to be more accommodative. According to the futures market, expectations for the Fed Funds rate by the end of 2026 were little changed. It’s still pricing in two rate cuts this year with the first likely to come at the June meeting.2 The market has typically rallied around the idea of lower rates. Without that, stocks may have a tougher time moving higher. …But The Fed Gets A New Leader Months of speculation finally ended as President Trump announced the nomination of Kevin Warsh as the next Federal Reserve chair.3 It’s modestly surprising in that it’s a very conventional pick for the post. Warsh has spent the past 20 years at the Fed and was once under consideration for Secretary of the Treasury. Part of the market’s volatility this past week stems from investors trying to figure out what kind of Fed leader he’ll be. In the past, he was very much for keeping inflation under control. That would support the idea that, like Powell, he’s not in a rush to cut rates and could keep policy conditions relatively the same after the transition. However, in a recent Wall Street Journal column, he criticized the Fed referring to it as “one of the main obstacles to the U.S. economy”.4 Trump also said about Warsh recently that “he thinks you have to lower interest rates”.5 That’s unquestionably what Trump wants. We’ll see if Warsh will follow through on the White House’s demands. » Work with expert advisors: See how Vanguard Personal Advisor can help Consumer Confidence Hits A 12-Year Low Consumer confidence levels continue to hit fresh multi-year lows. The January reading slipped all the way to 84.5, which would mark its lowest level since 2014.6 While some market sentiment readings have shown modest improvement in recent months, this report has demonstrated a regular deterioration in how consumers view their conditions. There are any number of catalysts that could explain it – affordability, geopolitical tensions, a stagnant labor market, tariffs. Perhaps more concerning is the fact that this reading is now lower than what it was during the depths of the COVID pandemic. While high level economic numbers remain good, reports like this clearly show that not everyone is participating. The bottom half of the K-shaped economy is still struggling and could eventually take the economy down with them if they finally hit their limit on spending. » Manage your finances: Explore Monarch Money’s all-in-one budgeting app The Week Ahead A few themes to watch next week: It’ll be a big week for employment data. We’ll get the ADP employment report, a measure
Is Now a Good Time to Invest in Index Funds? 2026 Insights
Last April 2025, you may have watched your portfolio crater as markets crashed on what President Trump called “Liberation Day.” Maybe you panicked and sold when the S&P 500 plunged during those volatile days. Maybe you sat on the sidelines, waiting for things to calm down. Then, in what felt like a blink of an eye, markets not only recovered but hit new all-time highs by June. Now you’re staring at index funds sitting near record levels, with financial headlines screaming about “overvalued markets” and elevated valuation ratios. The question burning in your mind: Is this really a good time to start investing in index funds, or should you wait for the next crash? Here’s the truth that might surprise you. The data shows that this exact question about timing your entry into index funds might be the wrong question entirely. After looking closely at decades of market data, including what happened to investors during and after crashes just like April’s, the evidence points to one clear conclusion: time in the market beats timing the market, every single time. Current Data Insights Let’s start with where we stand today. As of January 2026, the S&P 500 is up 17.82% compared to the same time last year.1 One metric that financial experts often reference is the CAPE ratio (Cyclically Adjusted Price-to-Earnings ratio), also known as the Shiller P/E ratio. This measurement looks at stock prices compared to average earnings over the past 10 years, adjusted for inflation. It helps smooth out short-term earnings fluctuations to give a clearer picture of whether markets are expensive or cheap relative to historical norms. As of December 2025, the global CAPE ratio sits around 27.71, which is above its long-term historical average but not at the extreme levels we’ve seen during major market peaks.2 Think of CAPE like a price tag on the entire stock market, when it’s high, you’re paying more for each dollar of company earnings, suggesting potentially lower future returns. When it’s low, you’re getting more earnings for your investment dollar. In the meantime, investors have poured $363 billion into ETFs in 2025, with index funds still commanding the majority of these flows despite increased interest in actively managed funds.3 This shows that even after the April volatility, prudent investors are still putting their money into broad market index funds. But it’s understandable if you are nervous. Fresh in everyone’s memory is that April crash when new tariff policies sent global stock markets tumbling. Granted, valuation concerns are real when markets sit above historical averages. Add in the ongoing uncertainty around Fed policy and inflation, and it’s natural to wonder if you’re buying at the top. If you’re thinking to buy a stock index fund or almost any broadly diversified stock fund, such as one based on the S&P 500, now can be a good time to buy as long as you plan to hold it for the long term. The market generally rises over time because the economy grows and corporate profits increase. The key phrase there is “prepared to hold it for the long term.” That’s where most investors get tripped up. » Start investing today: Explore top brokerage accounts with our detailed review April 2025 Crash: A Case Study What happened in April 2025 gives us a real-time example of why market timing usually fails. In early April, new tariff policies were announced that would significantly increase costs on imported goods from many trading partners. The reaction was swift and severe, with stock markets around the world tumbling as investors worried about the economic impact of the new trade policies. The crash was real and painful. Some investors saw their portfolios drop more than 27% during this period.4 Even typically stable investments like bonds sold off, creating widespread panic across financial markets. Many investors who had lived through previous market downturns found themselves shaken up by how quickly things deteriorated. But here’s the critical part that many missed: Just days later, policymakers announced they would pause the tariff increases. This single announcement triggered what many described as one of the largest stock market rallies in years. Within weeks, the S&P 500 had turned positive for the year. By summer, both the S&P 500 and NASDAQ were hitting new all-time highs. Think about that timeline. A mere seven days from panic to the beginning of recovery. Less than three months from crash to new highs. The biggest mistake during chaotic markets is panicking and making moves without a real plan, often turning temporary drops into permanent losses. The benefit of staying invested became crystal clear to anyone who rode out those turbulent weeks. This mirrors exactly what Warren Buffett told LeBron James years ago when asked for investment advice: “Owning the United States at a decent average price bought over time, you really can’t go wrong with that.”5 LeBron followed that advice and officially became a billionaire. The lesson from April 2025 couldn’t be clearer. Investors who stayed invested through the crash saw full recovery plus additional gains. Those who sold and waited for “better entry points” missed the entire recovery rally. » Stay Ahead: Join our weekly newsletter today Market Timing vs. Time in Market Let’s look at what decades of research tells us about trying to time the market versus simply staying invested. Charles Schwab conducted one of the most comprehensive studies on this topic, following five hypothetical investors over 20 years from 2005 to 2024.6 Peter Perfect had impossibly good timing, investing his $2,000 each year at the absolute market low. After 20 years, he accumulated $184,183. Ashley Action invested her $2,000 immediately at the beginning of each year, regardless of market conditions. Her final balance: $175,541. Matthew Monthly used dollar-cost averaging, investing $167 each month. He ended with $166,591. Rosie Rotten had terrible timing, investing at each year’s market peak. Even with the worst possible timing, she still accumulated $138,471. Larry Linger kept waiting for the perfect moment and never invested in stocks at all,
A Volatile Week in Geopolitics with the Fed on Deck Next
Stocks survived a choppy week with mixed results. Early in the week, rising tensions surrounding Greenland and the threat of additional tariffs from the United States and Europe spiked volatility. Risk assets recovered as the rhetoric eased, but this past week should serve as a reminder that geopolitics still play center stage. Broader leadership is another big theme with small-caps, value stocks, and precious metals performing particularly well. It was a big week for milestones. Natural gas prices rose more than 60% as frigid conditions across the United States lifted demand. Silver crossed $100/ounce for the first time. The Russell 2000’s streak of outperforming the S&P 500 was snapped at 14 straight trading days on Friday, the longest streak in 30 years. Tip of the Week Consider diversifying your cash position and emergency savings. A simple approach would be to keep your true emergency fund fully liquid in a high-yield savings account. Then consider laddering short-term CDs or Treasuries for any cash you do not expect to need for 6 to 18 months. It can manage risk and help you avoid selling investments at the wrong time when volatility spikes. » Earn more on your savings: Explore top high-yield savings accounts today Market Moves Weekly Market Snapshot: S&P 500: -0.4% – despite a lot of chop, the index was relatively little changed, but the story remains the rotation away from tech and into other areas of the market. Nasdaq 100: +0.3% – the tech-heavy index had a better week, but it’s no longer pulling the market higher the way it did in 2025. Russell 2000: -0.3% – small-caps have gotten off to a terrific start to the year and are currently one of the best-performing areas of the market. VIX: 16.1 – volatility shot higher during the first half of the week on geopolitical tensions, but calmed down as the week progressed as new tariffs got pulled off the table. Gold: +8.5% – there seems to be a global push away from the dollar and dollar-denominated assets; that has driven strong interest in both gold and silver here. 10-Year Treasury Yield: 4.23% – this yield briefly moved to its highest level since August during the Davos conference as Treasuries are growing less attractive worldwide. Drivers: Market sentiment turned nervous as the U.S. government took a strong arm approach to acquiring Greenland and punishing European countries that disagreed. The stand-down later in the week helped equities recover, but the damage is still being done to the dollar. If global governments continue to pivot towards de-dollarization, it could eventually produce a serious headwind to U.S. asset returns and make international stocks and precious metals more attractive. » Reduce your tax burden: Explore the best tax relief services Economic Highlights A couple of the notable themes that stood out this week: Things Get Heated At Davos The annual World Economic Forum in Davos, Switzerland has traditionally been a meeting of the major global economic powers to discuss current issues and trends. This past week, it became a hotbed of geopolitical rhetoric with several leaders hurling threats, pointed barbs, and insults at one another. At the center was the current administration’s desire to take control of Greenland either by negotiation or force. After threats of new tariffs by the United States against most European trade partners and indications by the EU that it would place its trade agreements on hold, President Trump mid-week said that he wouldn’t be using force to takeover Greenland and would not be implementing new tariffs. In the end, it was a lot of market volatility without anything really being accomplished. As long as Greenland remains a focus of the White House, it seems like these bouts of short-term volatility are likely to continue. It’s important to remember that threats and rhetoric don’t usually turn into policy. They can be distracting short-term noise, but not much that impacts the long-term picture. Not much has changed on the equity market front, but the risk looks sticky for the dollar and the precious metals markets. The S&P 500 hanging around all-time highs at the same time that gold & silver are soaring to new highs of their own isn’t the behavior we usually see in the markets. It could soon reach a point where one of the two has to give. Fed’s Preferred Inflation Measure Comes In As Expected The United States PCE price index came in at 2.8% annualized in November, in line with market expectations.1 The core rate also came in at 2.8%. As we noted last week with the CPI data releases, inflation remains in an elevated but stable state. There’s little indication at this point that inflation could approach the Fed’s 2% target anytime soon, but there’s also little indication that it’s threatening to move significantly higher right now. Tariffs remain the biggest obstacle to inflation moderating and the latest geopolitical dust-up, which threatens to undo some existing trade partnerships, could increase pricing pressures further. For now, the market seems satisfied with inflation not rising as long as it isn’t falling. That viewpoint may be less sustainable longer-term, but it’s enough to keep it off the list of primary economic concerns for the time being. » Analyze different investment portfolios: Try StockRover’s 2-week free trial today Consumer Sentiment Continues To Very Slowly Improve Consumer sentiment is still around the levels of 2022 when inflation was soaring and the economy was at risk of slipping into recession. But at least sentiment is beginning to improve. Slowly. The University of Michigan sentiment survey hit a reading of 56.4 in January, its second straight monthly increase and the highest since August.2 For some perspective though, this reading spent much of the year in the 70s before falling off sharply last year. Sentiment has been a persistent concern for over a year. Even though GDP growth looks good and the unemployment rate is still below 5%, depressed consumer sentiment has reflected how people on the bottom side of that K-shaped
CPI Cools, Earnings Heat Up, and the Fed Keeps Markets on Edge
U.S. stocks were choppy this week, but the big story might be the broadening of the market rally. Small-caps have outperformed the S&P 500 for 11 straight trading days, the equal weight S&P 500 index is outperforming the traditional index by a wide margin this year, and the year-to-date sector leaders are all cyclicals and defensives. In other words, tech is fading and diversification is winning again. The economic data, including the latest inflation and retail sales numbers, were fine, but the question of Fed independence is the biggest macro wild card at the moment. Tip of the Week With gains starting to come from other areas of the market besides tech, portfolio diversification becomes more important. If tech & growth stocks are still a significant portion of your portfolio, consider recently unloved areas of the market, including value stocks, dividend payers, and small-caps. This can help spread out and reduce risk as well as give you the opportunity to continue capturing positive returns during a market rotation. » Start investing today: Explore top brokerage accounts with our detailed review Market Moves Weekly Market Snapshot: S&P 500: -0.4% – the rotation out of mega-cap tech continues, although market breadth last week actually looked much better than the major averages would indicate. Nasdaq 100: -0.9% – the cloud of uncertainty hanging over Fed independence and the geopolitical backdrop is causing investors to shift away from growth stocks. Russell 2000: +2.0% – small-caps have outperformed large-caps for 11 straight trading days, something that hasn’t happened since 2008. VIX: 15.9 – volatility ticked modestly higher later in the week, but is still failing to signal any kind of stress in the system. Gold: +1.7% – gold tends to rise in periods of geopolitical uncertainty and that’s exactly what we saw this week. 10-Year Treasury Yield: 4.23% – Treasury yields remain stuck in a range and are weighing the impact of the Fed’s threats from the White House along side an uncertain economic path. Drivers: CPI remains contained, which was a good sign for the markets, but it’s the stuff in Washington that’s preventing the major averages from moving much higher. The idea of a White House-controlled Fed would create incredible market instability. The administration’s push to take over Greenland is creating plenty of geopolitical animosity. Even the proposal to cap credit card rates could make the split in the K-shaped economy even wider. The rotation to non-tech and small-caps reflects that as investors seek out better value. The lack of movement in Treasury bonds, however, tells us that investors aren’t abandoning equities altogether. » Analyze different investment portfolios: Try StockRover’s 2-week free trial today Economic Highlights A couple of the notable themes that stood out this week: Inflation Remains Stable But Still Elevated The December CPI report came in roughly in line with expectations. The core rate was up 0.2% month-over-month, while the headline rate rose 0.3%. That brings the annualized rates to 2.6% and 2.7%, respectively.1 Inflation in the United States shows no sign of approaching the Fed’s 2% target anytime soon. Efforts from the Trump White House would make that even less likely. Everything that the president has suggested in recent weeks – tariff checks, his bond buying announcement, his push for the Fed to lower rates sharply, caps on credit card rates – is all inherently inflationary. Trump has been singularly focused on getting the U.S. economy to run faster, but any one of these could send inflation higher and run the risk of a 2022 repeat. With the Fed ending quantitative tightening (QT) late last year, the catalysts are all there. » Work with expert advisors: See how Vanguard Personal Advisor can help Q4 Earnings Season Gets Off To A Sluggish Start; Still Depend On Tech As The Driver The big banks kicked off the Q4 earnings season this past week. The reports themselves didn’t deliver any big surprises, but the threat of rate caps on credit card debt are likely to limit any bullishness in this sector until the issues gets resolved. As we get further into the earnings season, it’s clear that tech and the magnificent 7 stocks are going to need to deliver on heightened expectations. While AI optimism is still healthy, much of the upside is already baked into share prices and valuations are getting stretched to the point where there’s not much room for error. Take away the magnificent 7 stocks and earnings growth expectations for large-caps are pretty dull. Big tech simply has to deliver this quarter or any miss could pull the major averages sharply lower. In fact, big tech is going to need to deliver over the next several quarters. It won’t be until about a year from now where the biggest AI-related earnings growth rates start to subside and the rest of the economy starts to catch up. From a market performance standpoint, improved breadth is a good thing, but it’ll be another several quarters that the market is heavily tech-dependent. Retail Sales Suggest A Good, Not Great, Holiday Shopping Season U.S. retail sales in November rose 0.6% month-over-month, beating expectations for a 0.4% increase. In general, that would indicate a good start to the holiday shopping season, but there are some warning signs if you dig a little deeper.2 Sales at general merchandise and electronic stores were flat. If you exclude sales from things, such as gas stations and food stores, sales were up a more modest 0.4%. Consumers are still pretty clearly feeling the pinch. There’s plenty of evidence showing that they’re struggling, but it still has yet to show up in a major way in the headline numbers. This is likely a function of the K-shaped economy. Spending from higher net worth households is offsetting the struggles in the lower group. This makes the economy look good at a high level, but very vulnerable when you look closer. » Trusted research and data: Access Morningstar’s expert insights with a free trial The Week Ahead A
Small Caps Lead as Venezuela and Tariffs Keep Investors on Alert
Stocks pushed higher in the first full week of 2026, but market leadership is looking very different than what investors have been used to. Small-caps and cyclicals were clear winners as headlines around Venezuela, energy policy and the uncertainty surrounding the Supreme Court’s tariff ruling are keeping investors a bit more cautious. Tip of the Week As market leadership shifts to kick off 2026, remember the importance of diversification. A well-rounded portfolio includes exposure across multiple styles, sectors, and markets, not just a heavy allocation to tech. Bonds help provide income and manage risk when markets turn volatile. Also consider holding spare cash in a high yield savings account to take advantage of buying opportunities. » Ready to invest for retirement? Check out our review on the top IRA accounts Market Moves Weekly Market Snapshot: S&P 500: +1.6% – U.S. stocks delivered solid gains as breadth improved and despite the dark overhang of geopolitics, the jobs market, and tariffs. Nasdaq 100: +2.2% – this index managed to outperform the broader large-cap market even though tech and the magnificent 7 stocks were collectively a performance drag. Russell 2000: +4.8% – a big resurgence in cyclical and value stocks helped small-caps, which are overweight in both of these areas of the market. VIX: 14.5 – despite plenty of catalysts that could have rattled investors, the markets largely remained calm and orderly, which helped contribute to gains for equities. Gold: +4.1% – gold continues its volatile run of the past few weeks; rising geopolitical risks improved the demand for safe havens. 10-Year Treasury Yield: 4.17% – long-term yields have remained in a very tight range over the past month. Drivers: After a quiet holiday period, the markets now have a lot to think about. Another weaker-than-expected jobs report wasn’t entirely surprising given recent trends. Investors were largely willing to shrug off events in Venezuela and the Supreme Court’s eventual ruling on the Trump tariffs. While they didn’t necessarily cause investors to head for the exits, they were heavily responsible for the big rotation we saw within equities this past week. » Trusted research and data: Access Morningstar’s expert insights with a free trial Economic Highlights A couple of the notable themes that stood out this week: The Jobs Market Remains Weak But Stable The December non-farm payroll report showed more stagnation in the labor market. The 50,000 jobs added number missed expectations of 60,000, but negative revisions to both October and November figures made the report look worse.1 From May-December, the U.S. economy has added a scant 93,000 jobs. The unemployment rate actually dipped lower to 4.4%. This helps confirm the notion that while job hiring has slowed to a crawl, firings have also slowed creating a balance that’s helping the labor market stay afloat for now. The slowdown in the jobs market has coincided with President Trump’s “Liberation Day” tariffs. We’ve heard plenty of anecdotal evidence from importers that they’re putting hiring on hold until they better understand the financial impact of higher import costs. With seven months of data now in the books following that day, we see that the effect is being felt economy-wide. » Data-driven stock picks: Test out Alpha Picks by Seeking Alpha now Markets Don’t Get An Answer On Tariffs; Still A Wild Card The Supreme Court was expected to give a ruling on the legality of the Trump tariffs on Friday, but instead decided to punt.2 This has become a key agenda item for Trump, although legal experts continue to question the legality of the tariffs and whether the president has overreached his authority. From a pure market perspective, it could be a bullish sign if the court rules against Trump. American importers who have been paying the tariffs would likely see immediate financial relief, although it seems unlikely that tariff refunds would be issued. The removal of the tariff uncertainty could lead to companies opening up job hiring again and create a catalyst for economic expansion later this year. Following Liberation Day, the average tariff rate has climbed to 80-year highs. Venezuela Unrest Pushes Oil To 7-Week High The events surrounding Venezuela and its president have resulted in oil market volatility more than stock market volatility. The country isn’t even a top 10 oil-exporting nation, but the mere appearance of a disruption and the potential for more widespread impacts has spiked oil prices. Brent crude oil prices touched a high of $63.91 on Friday, a level not seen since just before Thanksgiving.3 Geopolitical oil price shocks tend to be short-term in nature and often retrace their steps once the dust-up cools off. Whether this turns out to be one of those events remains to be seen. Consumer Sentiment Improves Slightly The University of Michigan Consumer Sentiment survey reading for January came in slightly higher than December’s and reached its highest point since September.4 It’s a positive development, but not one that’s likely to be a needle mover since this number is still well below 2023 and 2024 levels. The Week Ahead A few themes to watch next week: The December CPI report on Tuesday will be the main event. Expectations are that both the headline and core rates will remain largely unchanged year-over-year, but will both see increases of 0.3% month-over-month. Inflation has stabilized but it’s not going down. We’ll get the kickoff of the Q4 earnings season this coming week, which will be led off by big banks JPMorgan Chase, Citigroup, Bank of America, and Goldman Sachs. The Supreme Court’s decision on tariffs didn’t come down last week, but it could be announced at any time. The court will make its next release of opinions on Wednesday, but there’s no firm date on when their decision on tariffs will arrive. The November retail sales report gets released on Wednesday. Sales growth has been falling consistently since June and was flat in October. This is considered a key insight into the health and behavior of the consumer, so this report may be watched more
Markets Wrap Up Another Strong Year as Investors Look Ahead to 2026
U.S. stocks finished the week on a down note, but 2025 marked another year of double digit gains for the major indices. Volume was light and volatility was low as most traders remained on the sidelines for the holiday. As we move into the new year, the U.S. economy is still showing resilience and inflation is under control. But a steady rise in the unemployment rate looms as a sign of trouble. Tip of the Week As markets enter 2026 with broad gains behind them, investors should revisit the power of diversification across asset classes. Past performance does not guarantee future results, and having exposure across equities, fixed income, and alternative assets can help manage risk while participating in growth. » Start investing today: Explore top brokerage accounts with our detailed review Market Moves Weekly Market Snapshot: S&P 500: -1.0% – U.S. stocks consolidated to close out the year, but still finish 2025 with a gain of roughly 16%. Nasdaq 100: -1.6% – traders may be locking in gains for recent winners, but an overall lack of trading volume doesn’t really tell us much. Russell 2000: -1.1% – small-caps continue to struggle as investor optimism remains focused on tech and AI stocks. VIX: 14.5 – volatility was muted and markets stayed calm; normal conditions are likely to return in the coming week. Gold: -4.8% – gold gives back pretty much all of its gains from the prior week as traders reallocate to set up the new year, but 2025 still marks one of its best years ever. 10-Year Treasury Yield: 4.19% – yields ticked higher, but traders are waiting for next week’s unemployment data for early 2026 trends. Drivers: It’s tough to draw any meaningful conclusions from what was largely a quiet week. Low volatility conditions can lift risk asset prices, but year-end can also motivate investors to lock in gains and reallocate, which may be what happened here. As we head into 2026, the labor market and inflation will be key factors to watch as the market currently expects the economy to continue growing at a healthy rate. » Ready to invest for retirement? Check out our review on the top IRA accounts Economic Highlights A couple of the notable themes that stood out this week: Future Earnings Growth Is Looking Strong While we talk a lot about the tech and AI trades helping to push stock prices higher, it ultimately comes down to earnings growth. If corporate earnings are rising, chances are that stocks will eventually follow suit. Based on Goldman Sachs’ current outlook, investors might be in for more good times ahead.1 It’s expected that S&P 500 earnings will post low double-digit growth in both 2026 and 2027 after hitting that number in 2025. There are some concerns about current valuations, but stocks could keep rising this year even with some multiple contraction if this number is hit. The composition of any U.S. stock rally, of course, could be much different going forward, but it looks like a constructive background nonetheless. International earnings are also expected to accelerate. Given relatively cheap valuations, this could be an area for investors to consider, especially considering how overseas stocks finally beat the S&P 500 in 2025. » Reduce your tax burden: Explore the best tax relief services Home Prices Fall For The 4th Straight Month Overall, the housing market continues to show signs of slowing, but individual performance at the regional level varies widely. The Case Shiller Home Price Index fell by 0.3% month-over-month in October, the 4th consecutive month of price declines, pushing the annualized growth rate down to a scant 1.3%.2 Gains are strongest in Midwest and Northeast markets (Chicago and New York are both up at least 5%), while southern regions, including Florida, Texas, and Arizona, are seeing prices decline. With mortgage rates remaining elevated, affordability still an issue, and the jobs market showing signs of weakness, it’s not surprising to see many potential homebuyers be unwilling to bid up home prices any longer. Jobless Claims Continue To Fall Weekly jobless claim numbers are starting to fall, although some of that could be due to holiday and seasonality factors. Last week’s reading was nearly the lowest in almost a year, suggesting that the labor market situation may not be quite as bad as feared.3 It’s possible we see a rebound in the coming weeks once business returns back to normal, but strength in the jobs market would be a big plus in 2026. The Week Ahead A few themes to watch next week: Lots of employment data this week. We’ll get the closely watched December non-farm payrolls report on Friday, which is expected to show another modest gain. Wednesday’s JOLTS report will give us a sense as to how many workers are changing jobs and how many are staying put (the recent trend has been decisively towards the latter). We’ll also get the latest ADP employment report on Wednesday, which measures private sector job growth. New U.S. manufacturing data from the ISM is likely to show a continuation of a trend that’s been in place for nearly a year. The sector is still shrinking and employment is contracting at a fairly rapid pace. On Friday, the University of Michigan consumer sentiment survey is likely to show a modestly positive mood, but far below levels we saw earlier this year. » Stay ahead of your finances: Join our newsletters today In Summary 2025 wrapped up on a down note, but there’s still reason to be optimistic about 2026. The jobs market will be a key driver and any improvements in this week’s data could boost equities to kick off the new year. The backdrop of positive expected earnings growth and a resilient U.S. economy should be supportive of risk asset prices in the near-term. » Work with expert advisors: See how Vanguard Personal Advisor can help
A Quiet Holiday Week, But Stocks Keep Pressing Higher
As expected, it was a quiet week for the financial markets, which provided the optimal backdrop for equities to rise further. The S&P 500 touched another new record high as volatility levels hit their lowest level in a year. A big Q3 GDP reading helped to encourage investors that the U.S. economy was still humming even though some concerning signals still remain in the background. The coming week is likely to also be quiet before 2026 ushers in a return to normal. Tip of the Week If you ended 2025 with extra cash sitting in a checking account, this is a good moment to tighten up your “cash plan.” Markets look like they are pricing in easier Fed policy over time, which usually means cash yields can drift down. Consider putting money you do not need for 12+ months into a CD ladder or short-term Treasuries. » Looking for guaranteed income? Explore today’s top CD rates Market Moves Weekly Market Snapshot: S&P 500: +1.4% – low volatility and optimism surrounding U.S. economic health helped propel stocks higher. Nasdaq 100: +1.2% – tech stocks continue to close out the year leading the markets higher. Russell 2000: +0.1% – small-caps have struggled over the past two weeks as investors return to 2025’s leaders. VIX: 13.6 – volatility hit a 12-month low, which isn’t uncommon around the holiday season. Gold: +4.3% – gold breaks through to another new all-time high as geopolitical uncertainty increases and the dollar slides to a near 3-month low. 10-Year Treasury Yield: 4.13% – Treasuries deliver marginal gains, but have been largely flat over the past month. Drivers: A strong Q3 GDP report created confidence that recession is not a short-term risk. With the resilient growth narrative in the background, inflation remains contained and the market is still pricing in two rate cuts in 2026. In general, the weeks around Christmas and New Year’s are among the best of the year. 2025 was no exception. » Thinking to buy cryptocurrency? See the top crypto platforms today Economic Highlights A couple of the notable themes that stood out this week: Q3 GDP Shows The U.S. Economy Keeps Growing U.S. GDP in the 3rd quarter rose at a 4.3% annualized rate, the highest reading in two years, proving that the U.S. economy keeps growing despite concerns about consumer spending and tariffs.1 The year-over-year rate of 2.3% growth is up for the 2nd straight quarter. The biggest components of the gain were consumer spending and net exports. Even as some data show pockets of weakness in the economy, GDP growth has been mostly durable and relatively strong throughout the current cycle. The decline in labor market growth is still a risk, but consumer spending has been the clear driver that’s keeping economic growth churning higher. » Take control of your finances: Explore the top features of Quicken today Consumer Confidence Slips For The 5th Straight Month The only other report of note was the December consumer confidence index. It slipped to 89.3, the 5th straight month of decline, and continues a downtrend that has been in place since the 2021 peak.2 This report is in contrast to what we’ve seen on the economic growth and consumer spending sides. Inflation and affordability have been consistent sticking points for everything from food to housing. With the labor market stagnant, this probably tells us there are concerns about job security and confidence in the longer-term outlook. While this is an inconsistent measuring stick at best, it’s generally difficult to maintain strong growth when consumers are getting more worried. The Week Ahead A few themes to watch next week: It’s going to be another week light on news as the markets remain quiet. Everything will be closed on New Year’s Day and back on Friday, but the real action likely won’t resume until the following week. November pending home sales will come on Monday. It’s expected to show a modest gain compared to October, but is likely to stay negative year-over-year. Housing sales have picked up over the past several months, but elevated mortgage rates and high home prices are limiting upside. The Case Shiller Home Price Index has declined for three straight months. This week’s October reading is likely to extend the streak to four. The year-over-year home price growth rate in the U.S. has been declining throughout 2025. Future growth is expected to be small as home affordability remains a key issue for consumers. » Stay ahead of your finances: Join our newsletters today In Summary The markets are still optimistic about the current trajectory. This coming holiday-shortened week is likely to keep that intact. The turning of the calendar has historically resulted in some volatility as investors rebalance and reassess for the new year. Enjoy 2025’s returns, but be mindful that sentiment could change as we enter 2026. » Start investing today: Explore top brokerage accounts with our detailed review
Holiday Cheer Gets Dampened by More Signs of Trouble
The S&P 500 finished little changed for the week as a whole, but it was mega-cap tech that returned to provide the leadership. Lower volatility heading into an historically investor-positive holiday period combined with a lower-than-expected inflation reading brought the bulls back out. However, more troubling data from the labor market and further signs of consumer weakness highlight why this is turning into such a complex macroeconomic environment to assess. Tip of the Week If the past couple weeks reminded you how quickly headlines can swing markets, take it as a cue to tighten up your reserve cash. Keep your emergency fund in a high-yield savings account or short-term cash vehicle where you can earn real interest while staying liquid. » Boost your savings: Compare today’s best high-yield savings accounts available Market Moves Weekly Market Snapshot: S&P 500: +0.1% – tech gains again overshadowed what turned out to be a very mixed to disappointing week in other areas of the equity market. Nasdaq 100: +0.6% – the magnificent 7 returned to leadership, but other large-cap tech names, including Oracle and Micron, contributed. Russell 2000: -0.9% – small-caps took a breather last week after steadily outperforming the S&P 500 for the past month. VIX: 14.9 – markets remain quite calm overall and it should stay that way as we head into one of the lowest volatility periods of the year. Gold: +1.0% – gold begins to retest all-time highs and looks to strongly finish out one of its best calendar years ever. 10-Year Treasury Yield: 4.15% – yields drifted marginally lower as inflation dipped, but the lack of a sharper move reflects the uncertainty around the data. Drivers: The markets mostly continue to focus on the good and wait to see about the warning signs. Lower inflation helped the markets rally at the end of the week on the belief that the Fed may now have more room to lower rates in 2026. The weak labor market data and mixed results from retail are confirming that the macroeconomic backdrop, however, is deteriorating. At this point, they’re still just warning signs and not signals that an economic contraction is near. But the fact that we’re six months in on some of these signals shouldn’t be ignored. » Lock in today’s rates: Compare the best CDs now. Economic Highlights A couple of the notable themes that stood out this week: Non-Farm Payrolls Signal More Labor Market Trouble The markets are finally getting caught up on shutdown-delayed economic reports, but the news on the labor market front wasn’t positive. November’s non-farm payroll gain of 64,000 jobs in November (beating expectations for a 50,000 job gain) was overshadowed by a loss of 105,000 jobs in October.1 That brings the total job gain over the past six months to just 100,000 jobs. We’re not seeing consistent outright contraction in the jobs market yet, but it feels safe to say that we’ve reached the point of stagnation. Last week, we noted that the job quits rate has plunged, a sign that workers are no longer looking for opportunities elsewhere and feel more comfortable hanging on to existing job security. While this isn’t an imminent recession signal, it does tend to be a reliable leading indicator of an economic slowdown. Inflation Rate Dips, But Did It Really? The November CPI report, which showed that the annualized inflation rate came in at 2.7%, raised more questions than provided answers.2 The fact that there was limited data collection in November following no data collection in October cast some doubt on the accuracy of the data. This report’s conclusion doesn’t really line up with the pricing data we’re seeing elsewhere and that the final reading was so far off from expectations of a 3.1% rate, it might be better to wait for the December report to get a better handle on the current inflation situation. New York Fed president John Williams even cited “technical factors” that likely distorted the November report.3 Translation: U.S. inflation probably fell slightly in November, which is a good thing, but it’s tough to gauge where inflation is really at right now. Consumers Are Still Struggling There’s more reason for concern with consumer behavior. The October retail sales figure was flat month-over-month after rising just 0.1% in September.4 We keep hearing stories about consumer spending strength running out of gas and it’s finally showing up in the numbers. On top of that, Nike stock plunged more than 11% on a weak Q3 outlook.5 The primary culprits were slower sales in China and the negative impact of tariffs. The latter part, in particular, isn’t going away anytime soon and is one of the factors affecting consumer affordability. Big retailers, such as Walmart, are benefiting from consumers looking for cheaper prices, but a lot of the retail sector is struggling like Nike is. » Take control of your finances: Explore the top features of Quicken today Busy Central Bank Week; Bank of Japan Finally Hikes The Fed cut interest rates last week. This past week was an opportunity for global central banks to set their own policy rates. The Bank of England cut rates in a split decision. The European Central Bank held steady as expected. The Bank of Japan hiked rates to their highest level in 30 years. All told, this tells us two things. First, most of the world is at the end of their rate cutting cycles and taking a “wait and see” approach for now. Second, some countries like Japan are still dealing with above target inflation, which means rate hikes from some areas of the world still aren’t out of the question. The Week Ahead A few themes to watch next week: Expect a relatively calm holiday-shortened week. Markets will be closed on Christmas and close early on Christmas Eve. December 26th will likely be boring and slow as traders extend their holiday vacations. The only real economic report of note will be the first read on Q3 GDP. The consensus expectation is for an
Fed Cut Lifts Stocks, but the 2026 Rate Outlook Grows More Uncertain
The Federal Reserve cut interest rates by a quarter-point last week as expected, but now is forecasting just a single rate cut in 2026.1 The markets have advanced this year in anticipation of lower rates, but next year may become more challenging if the Fed chooses to remain more restrictive. Disappointing results from both Oracle and Broadcom may signal that the current tech rally is getting tired and momentum is finally fading. Tip of the Week Lower Fed policy rates tend to pull down yields on savings accounts, money market funds and CDs down over time. If you are still parking cash in a basic savings account, consider moving a portion into a high yield savings account or short term CD while rates are still attractive. Market Moves Weekly Market Snapshot: S&P 500: -0.6% – markets surged mid-week following the Fed’s rate cut, but weakness from tech stocks dragged the major averages lower. Nasdaq 100: -1.9% – sharp drops in Oracle and Broadcom shares following disappointing quarterly earnings results could indicate that the AI rally has peaked. Russell 2000: +1.2% – small-caps outperformed following the Fed’s rate cut and are looking like one of the beneficiaries of the rotation out of tech stocks. VIX: 15.7 – volatility levels got a little choppy throughout the week but nothing that indicated that fear was setting in. Gold: +2.3% – gold broke out mid-week to make a run at a new all-time high before pulling back; safety trades overall saw mixed interest. 10-Year Treasury Yield: 4.19% – Treasuries ended up little changed on the week as rate cut gains were offset by the Fed’s hawkish outlook for 2026. Drivers: This week was all about the Fed and tech earnings. Markets initially rallied following the cut, but the lack of support for multiple cuts over the next several quarters dampened the outlook. On the one hand, it’s good that the Fed thinks the economy doesn’t need a great deal of support to keep expanding. On the other hand, stocks have rallied in part due to the expectation for lower rates. Investors appear to be growing more weary that AI momentum is fizzling out. There were already lingering concerns about overspending on AI development. The weak guidance from heavyweights Oracle2 and Broadcom3 did nothing to calm those fears. We could be entering the phase where tech stock returns from here need to be based on results, not hope. » Lock in today’s rates: Compare the best CDs now. Economic Highlights A couple of the notable themes that stood out this week: The Fed Cuts, Signals More Progress on Growth & Inflation Along with its rate decision, the Fed delivered its quarterly economic projections. In it, the Fed sees an uptick in real GDP growth, but doesn’t see inflation getting back to the 2% level until 2027. The wild card in all of this (if it were to play out) is that there is a wide range of projections among the Fed members as to where the Fed Funds rate will end 2026 at. Most of the predictions fall in the range of three rate cuts to one rate hike. The Fed’s Dot Plot is notoriously inaccurate and the central bank usually has no more ability to see the future than you and I do. But it doesn’t create the possibility for a wide range of outcomes over the next year. Job Quits Plunge, Signaling Workers Value Security The majority of labor market data is beginning to tell the same story – job growth is stagnating, if not contracting, and workers are increasingly indicating that job safety is their top priority. For the second straight month, job openings have remained elevated, but the number of job quits plunged in October to their lowest level since the height of the COVID pandemic in 2020.4 This suggests that even in the face of opportunities to move to new jobs, workers seem to want to stay put and keep what they have. We’ve noted that the labor market is increasingly coming under pressure and this data would seem to confirm that. » Ready to take control of your finances? Explore the top features of Quicken today Small Business Optimism Improves Slightly The NFIB Small Business Index ticked up slightly to 99 in November, but remains right around the same level it’s been at since May.5 Right now, small businesses are taking the brunt of job losses and are disproportionately feeling the impact of tariffs. The fact that business optimism is remaining stable despite this is encouraging, but small business owners are clearly not feeling much better about conditions even though rates have fallen and the economy as a whole has remained resilient. » Boost your savings: Compare today’s best high-yield savings accounts available The Week Ahead A few themes to watch next week: We’re finally going to get caught up on non-farm payroll data with the October and November reports getting released on Tuesday. Given the lack of data collection during the government shutdown, the forecasts are more uncertain than normal, but the reports are expected to show continued modest job growth. On Thursday, we’ll get the November inflation numbers. The headline rate is expected to climb to 3.2%, which would mark nearly a full percentage point increase from April’s 2.3% low. This is likely factoring heavily into the Fed projections for 2026 and is a big reason why it doesn’t want to cut rates too quickly. October retail sales are likely to continue showing slow growth. Several major retailers have already issued warnings about weak consumer behavior, but so far overall retail spending has managed to remain resilient. » Stay ahead of your finances: Join our newsletters today In Summary The latest data is still showing an economy that’s moderating but not yet indicating a real risk of recession. Those conditions are likely to create a favorable backdrop heading into 2026, but U.S. stocks are showing signs of fatigue. We could be nearing the end of the AI rally and beginning the period where
Markets Continue to Grind Higher as the Fed Rate Cut Nears
The markets kicked off December with more gains, fueled by the high likelihood of another Fed rate cut next week. Growth, cyclicals, and small-caps continue to lead the market, which is often seen in periods where investors feel confident about the trajectory of the economy. Subdued volatility continues to confirm risk-on sentiment, but the latest labor market data showed further weakness in November. This is likely to remain a key theme heading into 2026. Tip of the Week With the 10-year Treasury yield sitting near 4.1% and the markets pricing in a high chance of another Fed rate cut this month, current yields on cash and short-term bonds may not last. If you hold excess cash in a basic savings account, consider shifting a portion into a high yield CD to lock in today’s rates. » Lock in today’s rates: Compare the best CDs now. Market Moves Weekly Market Snapshot: S&P 500: +0.3% – rate cut optimism and seasonality keep pulling the indexes higher despite concerning data about jobs and consumer sentiment. Nasdaq 100: +0.9% – tech continues to lead in a sign that investors remain confident heading into the new year. Russell 2000: +0.8% – small-caps extend a relatively strong run since mid-November relative to the S&P 500 thanks in large part to rate cut optimism. VIX: 15.8 – few surprises in both earnings and economic data keep volatility levels well under control. Gold: -0.4% – the gold rally has stalled out for more than a month; investor flows continue moving back into equities and other risk assets. 10-Year Treasury Yield: 4.14% – the high likelihood of a rate hike in Japan this month helped to pull global yields higher as well. Drivers: After a choppy start to the week, stocks settled down following some reassuring services data, a cooler-than-expected read on inflation and a rebound in consumer confidence helped bring buyers back into the markets. Investors have mostly ignored the ADP private sector jobs data, which shows losses for the 4th time in the past six months.1 If this trend starts spilling over into the more widely-watched non-farm payroll numbers and unemployment rate, it could trigger more volatility for equity prices. Economic Highlights A couple of the notable themes that stood out this week: Labor Market Stalls as ADP Reports Sharp Decline in Small Business Hiring and Rising Job Losses ADP reported 32,000 jobs lost in the private sector in November.1 This continues a troubling trend going back to the beginning of summer where the labor market has stagnated and is showing signs of going backwards. Part of that is jobs lost to AI, which was expected, but that is still a relatively small percentage of the overall number. The 120,000 jobs lost from companies with 1-49 employees show the labor market shrinking in the economy’s core and negatively affecting a lot of the people on the bottom end of the K-shaped economy. High Rate Cut Odds Put Spotlight on Fed Dot Plot and Risks of Falling Real Incomes The odds of a rate cut from the Fed next week have held steady around 87%.2 The Fed Dot Plot will be closely watched for the central bank’s expectations for rates, employment, and inflation. The latter could be particularly important. If the Fed plans for multiple rate cuts next year but sees no commensurate drop in inflation, real rates could start moving back towards zero. With so many households struggling with inflation and simply making ends meet, a decline in real incomes could be a tough sell. Rising Annualized Inflation Could Complicate Fed Cuts It’s an outdated figure, but anything that helps confirm that inflation is still under control is welcome news for the markets. The September PCE number, which is the Fed’s preferred measure of inflation, came in at 2.8% year-over-year, in line with expectations.3 Given that the reading is still in the 2’s and that it’s about 2-3 months old, the market mostly ignored it, but it does show a potentially troubling trend. The PCE annualized rate is up 0.5% since April and is now at its highest level since April 2024. That market is currently pricing in multiple Fed rate cuts over the next 12 months. A continued uptick in inflation is going to make it tough for the central bank to keep cutting rates with rising prices in the background. » Boost your savings: Compare today’s best high-yield savings accounts available The Week Ahead A few themes to watch next week: The December Federal Reserve meeting will be the main event. All signs point to a quarter-point cut, but any Fed Dot Plot report outlook for 2026 that doesn’t include multiple additional cuts could be taken harshly by the markets. The Q3 earnings season is mostly finished at this point, but we’ll still get reports from tech giants Broadcom4 and Oracle5 next week. These are two major AI players and one of the big themes over the past couple months has been return on investment from all of that infrastructure spending. They’ll need to maintain earnings and growth momentum or they risk sharp pullbacks at the first signs of a slowdown. The delayed September JOLTS report, detailing job openings and quit rates, could provide another sign of a slowing labor market. The number of job quits has been declining steadily for several months, a sign that workers may not be finding opportunities elsewhere and are needing to stick with the jobs they have. In Summary Investors are still in a good mood and that sentiment could carry into the new year. Seasonality this time of year usually features lower volatility and gently rising equity prices. The Fed outlook and delayed inflation readings could disrupt the narrative, but this is still looking like a period of relative steadiness for the markets. » Stay ahead of your finances: Join our newsletters today
Stocks Rally as Fed Rate Cut Bets Strengthen and Optimism Builds
Stocks used the upbeat mood of a holiday-shortened week to push prices sharply higher as markets grow more confident that the Fed will pull the trigger on a December rate cut. Tech and retail stocks led the rally, indicating broad risk-on sentiment heading into the holiday season, even though some signs of economic and labor market weakness loom in the background. December is traditionally a good month for equities and investors remain confident that the overall economy is on the right trajectory. Tip of the Week If you’re building your cash reserves, this may be a smart moment to use a high-yield savings account or lock in a longer-term rate. With expectations of rate cuts rising, securing today’s yields could work in your favor. Market Moves Weekly Market Snapshot: S&P 500: +3.7% – the index delivers its best week in months as the odds of a December rate cut go from questionable to probable. Nasdaq 100: +5.0% – tech leadership is a strong sign of positive investor sentiment even though valuation questions remain. Russell 2000: +5.5% – small-cap outperformance suggests that investors may be buying more into the long-term growth story than before. VIX: 16.4 – a couple weeks of elevated volatility raised short-term caution flags, but last week marked the return of normal market conditions. Gold: +3.7% – precious metals managed to defy their safe haven reputation and score a big rally right alongside equities. 10-Year Treasury Yield: 4.02% – Treasuries often dip when stocks rally hard, but the higher odds of Fed rate cuts actually helped pull yields slightly lower. Drivers: With little new information to work with and many traders on vacation, the simple combination of confidence in the economy and confidence in Fed rate cuts were enough to drive big gains.1 That likely changes in the coming weeks as the government catches up on its data releases and the market gets more information to work with. Outside of pockets of weakness, we don’t really have any major signs that the economy is slowing and that’s provided a baseline of support for equity rallies. Economic Highlights A couple of the notable themes that stood out this week: Soft Retail Sales Point to a Slowing Consumer Ahead of the Holidays The delayed September retail sales report showed that consumers are still spending but not at the rate the markets are expecting. Sales climbed by 0.2%, missing estimates for a 0.3% improvement.2 Given that several major retailers have already warned about soft spending heading into the all-important holiday shopping season, it raises concerns that consumers may not be able to fuel the next leg of an economic expansion. The K-shaped economy is a real thing. High earners continue to do quite well, while low earnings are still struggling to make ends meet. Falling Consumer Sentiment Signals Trouble for Holiday Retailers Consumer confidence continues sinking to near-record lows and remains one of the economy’s biggest red flags. In November, the monthly survey report produced its lowest reading since mid-2022 and one of its lowest readings ever.3 Among the primary reasons cited by the institution’s director were persistent high prices, weakening income and fallout from the government shutdown. With big box retailers, such as Target and Lowe’s, already indicating their own struggles with luring shoppers back into stores, there should be real concern here about how far stocks can rise without much consumer support.4,5 Producer Inflation Slows Unevenly, Keeping Fed on Alert Producer price inflation shows signs of easing, although it’s happening very unevenly. The headline rate increased by 0.3% month-over-month, but the core rate rose only 0.1%.6 This signals relatively tame inflation growth and could support the Fed’s rate cut case, but goods inflation will be a red flag. That number jumped 0.9% and should be a pretty clear statement that the inflation problem is not solved. The Fed will likely be more concerned about inflation on the consumer side. This may not influence the odds of what the Fed does next month, but it should continue to be monitored. Year-End Check: Markets Shake Off Tariff Shock and Recession Warnings As we start to wrap up 2025, it’s a good time to reflect on what has been over the past year. The more dire warnings of an economic slowdown and possible recession have largely failed to materialize. That’s helping push the S&P 500 to its third consecutive year of double digit gains (if this year is able to hold). The only real shock came in the spring during President Trump’s Liberation Day tariff spree. That sent stocks sharply lower, but a quick walkback of the stiffest levies quickly sent equity prices higher again. There are troubling signs from the labor market and the manufacturing sector is still weak. But support from the Fed and ongoing AI productivity gains present another bull argument for 2026. » Lock in today’s rates: Compare the best CDs now. The Week Ahead A few themes to watch next week: The market will keep playing catch-up on delayed economic report releases. The September PCE report, the Fed’s preferred inflation gauge, is likely to show another month-over-month increase. Barring a much higher-than-expected reading, expectations for a December rate cut are likely to sustain. Personal income and personal spending figures are expected to show modest gains again. These reports tend not to be real market movers and are generally informational more than anything. The markets tend to keep an eye on Black Friday sales figures. While it does tend to get used as a measure of consumer health, only a significant miss would probably impact the markets. Using a one-day sales number doesn’t tend to be indicative of longer-term trends, but it’ll get attention nonetheless. In Summary Markets ended the week on a strong note as rate cut optimism fueled big gains. Next week will mark a return to normal featuring much more economic data to digest. Inflation data will probably be front and center, but it’s unlikely to change the calculus for the Fed’s December rate decision. For now, investors seem re-focused
Tech Stocks Sell Off as Shutdown Ends, Data Flow Returns
U.S. equity markets remained volatile for most of the week, but no more so than on Thursday. NVIDIA’s quarterly earnings report was initially received positively before an aggressive mid-week reversal saw the Nasdaq 100 fall nearly 5% from its mid-day peak. Long-awaited government labor market data didn’t help much with sentiment. Volatility levels are elevated again and investors seem knocked back on their heels by a lack of reassuring data. Tip of the Week Make sure each one of your goals has the right asset allocation. Short-term needs (the next 6–12 months) generally belong in safer, liquid spots like high-yield savings accounts or short-term CDs. These can still earn north of 4% in many cases while keeping risk low. Long-term goals (retirement, college) are usually better served in a portfolio of broad index funds and ETFs that can ride out volatility. » Start investing today: Explore top brokerage accounts with our detailed review Market Moves Weekly Market Snapshot: S&P 500: -1.9% – tech weakness continues to drag the major averages lower as investors shift defensively into value, low volatility and consumer staples. Nasdaq 100: -3.1% – investors are moving past the AI enthusiasm stage and moving towards seeking out verifiable results from AI investments. Russell 2000: -0.8% – outperformance of large-caps signals some market broadening; relative strength in cyclicals over the past month is helping. VIX: 23.6 – market volatility levels nearly touched their highest level since April suggesting that investors are growing more fearful here. Gold: -0.5% – precious metals provided some downside protection, but didn’t act as a counterbalance to equity losses. 10-Year Treasury Yield: 4.07% – Treasuries saw some safe haven demand, but a lack of recent inflation data is preventing yields from dipping too far. Drivers: The big sell-off in tech and bitcoin confirm that the bears are in control here. We’re continuing to see a defensive shift within equities, but investors have yet to really seek out safety in gold and Treasuries. Odds still slightly favor a rate cut in December, but the lack of recent data due to the government shutdown may push the Fed to wait until 2026 when they have more information to work with. Economic Highlights A couple of the notable themes that stood out this week: Delayed Jobs Data Confirms a Cooling Labor Market After more than a month’s delay, we finally got the September non-farm payroll report (although it still doesn’t get us up-to-date).1 The BLS reported that 119,000 jobs were added, but the unemployment rate rose to 4.4%, its highest reading since 2021. That means labor force participation is growing, which is a good thing, but it also indicates that overall labor demand is still shrinking. Some of this is being blamed on AI replacing humans, but a Challenger, Gray & Christmas report shows that the ratio of “AI blamed” job losses relative to total job cuts in 2025 is less than 10% (although that ratio is larger in recent months).2 Either way, the labor market is almost certainly slowing here and that’s likely to start impacting economic growth forecasts heading into the new year. NVIDIA’s Pop Fades as AI Bubble Fears Take Over The market initially popped following NVIDIA’s earnings report last week, not exactly a rarity in recent years, but the follow through was unusual.3 Market fears of an AI bubble slowly took over and sent shares sharply lower. Mega-cap tech companies have posted strong revenue and earnings growth over the past year from AI, but investors worry that 1) companies may not get a reasonable ROI on all that spending and 2) AI valuations have become overdone. CEO Jensen Huang tried to dispel the bubble talk, but ultimately the market didn’t listen.4 With NFP & CPI Reports Canceled, the Fed Faces a Blind December The government cancelled the release of both the October non-farm payroll report and the October CPI report.5,6 Both are watched very closely by the Fed in helping to set monetary policy, but they won’t have either of them in time for their December meeting. There’s the thought that the lack of data may cause the Fed to pause in December and reconsider the next rate cut in January. So far, the Fed Funds futures market is still pricing in a 70% chance of a December cut.7 Walmart’s Strong Quarter Bucks Retail Caution Heading Into the Holidays Some retailers have been striking a cautious tone about the holiday season, but Walmart isn’t one of them. Its Q3 earnings report last week showed a beat on both revenue & earnings as well as raising full-year guidance.8 This is a positive sign ahead of a holiday season with high affordability concerns and uncertainty about consumer resilience. » Lock in today’s rates: Compare the best CDs now. The Week Ahead A few themes to watch next week: A holiday-shortened week won’t produce a whole lot of headlines. We will get the release of some outdated government data, including manufacturing data and retail sales. The latter will probably be the most closely-watched, although it’s expected to show steady growth yet again. Watch Black Friday and Cyber Monday sales figures for signals. Stocks staged a comeback on Friday, but investors clearly feel shaken. Holiday trading weeks tend to feature light volume, something which is generally helpful for risk assets. It would be a bad sign for longer-term sentiment if we see further declines in risk asset prices this coming week. In Summary Tech enthusiasm is wearing off and the major indices are taking a hit as a result of it. Defensive sectors like healthcare and consumer staples are holding up well and could benefit if investor optimism drops. The word “bubble” is likely to be with us for a little while and that could put a cap on short-term tech upside here. Diversification should be a consideration in order to help shield from drawdown and concentration risk. » Stay ahead: Join our weekly newsletter today
Tech Takes a Breather as Shutdown Ends, Data Flow Returns
Stocks chopped in a wide range this past week. A Monday rally in anticipation of an end to the government shutdown gave way to a sharp Thursday sell-off and high volatility on Friday. Investors continue to reassess tech valuations as the odds of a December rate cut from the Fed diminish.1 With the shutdown now over, official government data will restart, but only gradually. Investors will still need to navigate a fog of uncertainty for a bit longer while focusing on risk positioning. Tip of the Week If you’ve been hiding in cash while headlines whipsaw, consider a tiered plan: keep 3–6 months of expenses in a high-yield savings account for safety, but automate small, regular transfers from checking into a low-fee brokerage account to dollar-cost average back into your long-term allocation. Market Moves Weekly Market Snapshot: S&P 500: +0.1% – weakness in tech and AI stocks gets offset by strong gains in healthcare & staples as investors rotate within equities. Nasdaq 100: -0.2% – investors rotate out of expensive tech stocks with the odds of a December rate cut continuing to shrink. Russell 2000: -1.8% – money has been moving into small-cap ETFs this month, but performance has yet to follow. VIX: 19.8 – volatility levels climb into the “exercise caution” area as tech valuations get repriced and the market prepares to reintegrate government data into their outlooks. Gold: +2.1% – precious metals capped a volatile week with a sharp decline on Friday. 10-Year Treasury Yield: 4.15% – yields are stuck in a tug of war; a lack of Fed action wants to pull them higher but broad risk-off sentiment pressures them lower. Drivers: Liquidity is a key driver of equity returns. The Fed’s announcement that it will end quantitative tightening (QT) starting in December will help, but questions surrounding how much it might actually cut rates over the next couple quarters will counteract that.2 Right now, the market is dealing with the reality of not getting as much support as it would like and that is causing investors to rethink their risk appetites. Valuations tend to contract in these scenarios, so it’s not surprising that we’re seeing tech and growth stocks start to sell off. » Learn more: check out our YouTube channel Economic Highlights A couple of the notable themes that stood out this week: After 43 days, the government shutdown finally ended, although it will take some time for a full return to normal.3 Government data releases will probably be a slow trickle and some backlogged reports, such as employment data, may never be fully released. It gives the Fed a tougher job in deciding what to do with interest rates since they’re unlikely to have the full picture by their meeting on December 17th and 18th. According to the Fed Funds futures market, the odds of a December rate cut have gone from 95% one month ago to just 44% today. Cleveland Fed President Beth Hammack and St. Louis Fed President Alberto Musalem both expressed skepticism about the need for further rate cuts, helping to stifle the positive momentum for stocks that had been building since last week.4/5 The government didn’t issue its monthly retail sales report last week, but the National Retail Federation did.6 It said that sales jumped by 0.6% in October compared to the prior month and are up 5% year-over-year. While this may look positive in a vacuum, credit card debt is also rising, suggesting consumers are buying with borrowed money. The Week Ahead A few themes to watch next week: Corporate earnings take center stage this week. NVIDIA reports after the bell on Wednesday, but we’ll get a good look at how the retail sector is doing from Home Depot, Target and Walmart reports. Holiday spending forecasts have been fairly tepid this year and insights from these big box retailers should let us know if consumers are reaching the end of their ropes. The Fed will release the minutes from its October meeting on Wednesday. With dissension building inside the central bank, investors will watch closely for clues about whether another rate cut is coming next month. Even though the government shutdown has ended, we’re unlikely to see much data from the government this week. With Thanksgiving coming the following week, the street may need to wait a bit longer to catch up on the latest data. In Summary Investor sentiment has begun wavering. The markets are concerned they won’t get the Fed rate cuts they were hoping for and that’s ignited a defensive rotation within equities. Valuations remain something of a concern, but it’s not the primary driver of stock performance right now. The government shutdown has ended, bringing some relief, but attention now shifts to the economic data delayed over the past two months. » Stay ahead: Join our weekly newsletter today
Tech Wipeout Leads Markets Lower as Optimism Meets Reality
The U.S. equity markets took a beating last week, led by big losses in tech stocks. After months of AI optimism, the street finally got spooked about high tech valuations and used this as a justification for the sell-off.1 The limited economic data released last week raised some concerns about whether the labor market is beginning to crack further. The broader market fared somewhat better, but shaken investor sentiment clearly set the tone for the week. Tip of the Week If you’re holding excess cash on the sidelines, short-term CDs can offer both yield and safety with a locked-in rate. They’re a solid option while waiting for markets to stabilize after strong year-to-date gains. Market Moves Weekly Market Snapshot: S&P 500: -1.6% – large-cap tech was finally a drag on the major averages even though defensive issues did relatively well. Nasdaq Composite: -3.1% – tech got hammered as concerns about overspending on AI development and rich valuations caused investors to think twice. Russell 2000: -1.9% – the rotation out of big tech benefited risk-off themes but not small-caps. VIX: 19.1 – volatility spiked to its highest level in three weeks as investors cope with economic and portfolio issues, but calmed into Friday’s close. Gold: +0.1% – precious metals remain a counterplay on monetary and geopolitical conditions, but not so much a safe haven consideration. 10-Year Treasury Yield: 4.09% – investors never really veered towards bonds in response to the tech sell-off. Drivers: Corporate earnings are a positive driver of stock performance, but consumer and investor sentiment is clearly taking a hit here. High tech valuations have been around for months, so it’s curious why they’re getting the blame here. A confluence of little things – questions around whether the Fed will cut again this year, how long the government shutdown will last and a surge in job cuts – seem to have finally broken the unending AI optimism. » Learn more: check out our YouTube channel Economic Highlights A couple of the notable themes that stood out this week: While the monthly non-farm payroll report was delayed again, the remaining labor market indicators were mixed. The ADP report showed the private sector adding 42,000 jobs in October, reversing a recent trend of negative growth.2 The Challenger job cuts number for October, however, soared to its highest level since just before Liberation Day in April and is well above its long-term trend. This could be partially due to the government shutdown, but the report highlighted AI adoption, slower corporate spending and rising costs as the primary reasons.3 The Q3 earnings season is wrapping up.4 Year-over-year earnings growth for the S&P 500 is around 10%, the 4th consecutive quarter it’s been in the double-digits. That provides a solid backdrop for stocks to move higher, but forward guidance has been mixed indicating that companies see some potential challenges ahead. The government shutdown has become the longest ever and pressures continue to build. Airlines have begun cutting up to 10% of flights across 40 major airports starting Friday and that number could keep climbing if the shutdown drags on longer.5 SNAP food benefits are still in question and federal workers continue to go without paychecks. U.S. consumer sentiment dropped to its lowest level in more than three years.6 The biggest reason for the decline centered around current conditions, which is reflective of worries about the government shutdown, personal financial considerations and job security. The Week Ahead A few themes to watch next week: We’re still in the midst of a government data blackout, so the markets will have to judge current conditions by guesses and what limited information is still available. As government benefits lapse, paychecks remain missing for federal employees, and airlines cancel thousands of flights, pressure on Washington to finally end the shutdown is mounting. The Q3 earnings season has been largely favorable, but a few late reporters, including Cisco and Disney, still plan to release their results. The biggest thing to watch might be how sentiment from last week carries forward into the coming one. Over the past year, the market has had a tendency to follow up a bad week with a good one and recover much of the previous losses. If the sell-off in U.S. equities continues, it could be a sign that investors are finally taking lingering risks more seriously. In Summary Last week marked a major break in the unwavering positivity provided by the AI boom. It’ll be important to watch how investors react next week after they have a couple of days to digest what happened. Firm data and information to work with will be hard to come by for a while longer, so the markets could be more vulnerable to volatility. Investor confidence has been shaken, but this week should let us know if it’s just temporary or a real structural sentiment shift. Stay tuned for next Sunday’s newsletter for our next update on market moves, economic shifts, and actionable insights. » Get your free InvestLane score: see how your portfolio aligns with your financial health.
Tech Earnings, Fed Signals, and a Tariff Truce Steer Markets
The major indices touched record highs earlier in the week, but lost momentum after the Fed’s hawkish turn put future rate cuts in doubt. Big tech earnings results were mixed, but emphasized the desire to keep spending on AI development. Market leadership was restricted mostly to just tech stocks and overall breadth looked much worse than the S&P 500 would suggest. Tip of the Week: A low-fee brokerage account with diversified ETFs can help you stay invested and capture upside as you wait for clearer market direction. Market Moves Weekly Market Snapshot: S&P 500: +0.7% – The market averages were pulled higher by outperformance in mega-cap tech. Nasdaq Composite: +2.2% – Tech gains continue to mask broadening weakness elsewhere in U.S. equities. Russell 2000: -1.4% – Rate-sensitive small-caps were disappointed by the Fed’s lack of commitment to future rate cuts. VIX: 17.4 – Equity volatility ticked up modestly but remains well within its traditionally normal range. Gold: -2.5% – Stabilizing around the $4,000 level as risks begin to balance out. 10-Year Treasury Yield: 4.08% – Yields are back on the rise after Powell failed to confirm that a December rate cut was a done deal. Drivers: The Fed cut rates by 0.25% to a range of 3.75–4.00%.1 But a lack of data transparency due to the government shutdown kept its future rate path open-ended. A heavy Q3 earnings slate and a U.S.–China trade agreement lifted equities, but Fed policy expectations continue to drive the market. Economic Highlights A couple of the notable themes that stood out this week: The Fed decided to cut interest rates by a quarter-point, as expected, but also announced it was stopping its balance sheet reduction on December 1st. By doing this, the central bank will no longer be pulling liquidity out of the economy. Traditionally, that’s been a bullish catalyst for equities. Q3 earnings report from the Magnificent 7 companies confirmed two things: 1) cloud growth is still strong and 2) they’ll keep spending a lot of money on AI development. Market reaction, however, was mixed. Amazon and Google saw big gains, but Meta Platforms fell 13% for the week on concerns that it’s spending too much money. The U.S. and China reached a trade agreement during their meeting in South Korea this past week.2 China agreed to ease restrictions on rare earth metal exports, a move the Trump White House had long pushed for. In exchange, the U.S. reduced the tariff rate related to fentanyl from 20% to 10%, although many tariffs still remain in place. The European Central Bank decided to keep its benchmark interest rate unchanged this past week, but the Bank of Canada chose to cut by a quarter-point.3/4 There’s evidence in both cases that economic challenges are growing. Eurozone economic growth is still relatively flat, while Canada is dealing with rising unemployment. The Week Ahead A few themes to watch next week: The Labor Department plans to release the October jobs report on Friday, November 7, but a prolonged government shutdown could delay it. The September data remains pending. We will, however, get the ADP employment data, which measures private sector job growth. This will be important not just because it’s the only labor market data we’re getting, but because that number has shown negative job growth in three of the past four months. The Q3 earnings season begins winding down, but we’ll still get reports from McDonald’s, Pfizer, Uber and Palantir. Quarterly earnings, thus far, have been good, not great, but nothing yet to indicate that a major slowdown is at hand. Momentum may be building to end the government shutdown this week. The potential expiration of SNAP benefits and ongoing disruptions at airports could finally be pushing Congress towards reaching a resolution sooner than later. The markets haven’t reacted much to events in Washington, but could start to if this becomes the longest shutdown in history. » Start investing today: Explore and compare top brokerage accounts In Summary Markets are still dealing with expectations without a lot of the government economic data it usually relies on. The Fed’s statement this past week reflects this. Without firm information to work with, we may soon see the markets turn a little more cautious. Investors continue to mostly ignore the impact to GDP from the government shutdown and seem content with steadiness in the three major indicators: GDP growth, unemployment, and inflation. Stay tuned for next Sunday morning’s newsletter for your latest updates on market moves, economic shifts, and actionable insights. Get Your Free InvestLane Score: See how your portfolio aligns with your financial health.
Markets Rally as Earnings Optimism Meets Rate Cut Hopes
The markets finished another strong week fueled by more positive earnings news and a CPI report that shows inflation is still under control. Another rate cut from the Fed is likely next week, which is helping tech, cyclicals and small-caps lead U.S. equities higher. Tip of the Week: If you’re considering where to park cash now that volatility is rising, look for a high-yield savings account or money-market fund offering over 4% APY as a temporary home for uninvested funds. Market Moves Weekly Market Snapshot: S&P 500: +1.9% – fueled by healthy corporate earnings growth and optimism that the Fed is on track to continue cutting rates. Nasdaq Composite: +2.2% – tech continues to lead as the resilient U.S. economy narrative remains intact. Russell 2000: +2.5% – lower interest rates tend to benefit small-caps more than large-caps. VIX: 16.4 – after a bout of volatility last week stemming from regional bank concerns, market calm returned. Gold: -2.9% – a sharp pullback in safe haven trades as regional bank and inflation fears subsided. 10-Year Treasury Yield: 4.00% – hovering at times below the key 4% level for the first time since April ahead of an anticipated Fed rate cut next week. Drivers: Worries around a lack of data transparency due to the government shutdown were eased following a tame September CPI report. Earnings momentum has been steady. Tariff uncertainties are being kept in view, but have not been driving investment decision making. Economic Highlights A couple of the notable themes that stood out this week: The U.S. inflation rate rose to 3% in September, its highest reading since January, but ended up coming in below expectations.1 The core inflation rate ticked down 0.1% from last month and helped soothe market fears that tariffs were having a larger effect on consumer prices.2 The government shutdown is delaying the latest non-farm payroll report. Alternate data, including continuing jobless claims and ADP employment, continue to show a labor market that is cooling quickly. Markets aren’t reacting for now, but it could eventually impact equity prices if the trend continues. Japan’s latest inflation data could make next week’s Bank of Japan meeting an interesting one.3 Prices are up 2.9% year-over-year and could push the central bank to hike rates after a year of stubbornly high inflation. New Prime Minister Sanae Takaichi, however, is a policy dove which makes a rate increase unlikely. The Week Ahead A few themes to watch next week: The Fed, the European Central Bank, the Bank of Japan, and the Bank of Canada are all going to set policy rates. Of this group, only the Fed is expected to cut. Much of the heavy lifting globally on inflation control is already done, but recent upticks in both Japan and Canada are worth watching. It’s going to be a major earnings week with reports coming from Microsoft, Apple, Alphabet, Meta Platforms, Amazon, Visa, Mastercard, and ExxonMobil. The Q3 earnings season thus far has been mixed and results from the tech heavyweights could determine if the current bull run has another leg. President Trump and Chinese President Xi will meet on October 30th to talk trade ahead of the scheduled November 1st tariff increase. The two sides have traded verbal jabs over the past couple weeks with little sign of meaningful progress on a trade deal so far. In Summary Markets ended the week on an upbeat note with quarterly earnings looking good and inflation appearing to be under control. Central banks and earnings from many of the magnificent 7 names will take center stage next week with positive momentum fueling the bulls. Stay tuned for next Monday’s newsletter for your next update on market moves, economic shifts, and actionable insights. » Start investing today: Explore and compare top brokerage accounts
