February 2, 2026
The Markets (as of market close January 30, 2026)
The U.S. stock market delivered a strong performance to kick off 2026. Market indexes reached record-setting levels. Overall, Wall Street showed resilience despite mixed corporate results and ongoing fiscal policy uncertainty. Each of the benchmark indexes listed here closed January in the black. The S&P 500 rose steadily throughout the month, even surpassing the 7,000 threshold for the first time in its history. The Dow's gains reflected broad market strength, while the tech-heavy NASDAQ showed consistent upward momentum throughout the month. Entering February, investor sentiment remained cautiously optimistic.
January was a pivotal month for the U.S. economy, revealing both the strengths and vulnerabilities. The combination of fiscal stimulus, resilient corporate earnings, and technological innovation provided avenues for growth, but the headwinds from tariffs, a cooling labor market, and persistent inflation signaled a more challenging road ahead. The economy appears to be transitioning from stimulus-fueled expansion to a period of more modest, uneven growth. Gross domestic product ended the third quarter of 2025 with an annualized return of 4.4%. Forecasts suggest the fourth quarter GDP may tick down a bit.
Price pressures are moderating but remain above the Federal Reserve's 2.0% target, impacted by tariffs, both threatened and realized, and overall fiscal policy uncertainty.
The labor market continued to show signs of strain. Job growth slowed considerably, while the unemployment rate increased from 4.1% in December 2024 to 4.4% in December 2025.
Late in January, the Federal Reserve held interest rates steady, reinforcing expectations for a stable policy path, with possibly one or two rate cuts later in the year. Among the market sectors, energy, materials, consumer staples, industrials, and communication services advanced, marking a shift away from tech shares.
About one-third of the way through fourth-quarter earnings season, the S&P 500 is reporting strong results according to the latest information from FactSet. Overall, 33.0% of the S&P 500 companies have reported actual earnings results for the fourth quarter. Of those companies, 75.0% reported actual earnings per share (EPS) above estimates, which is below the five-year average of 78% and below the 10-year average of 76.0%. Eight of the 11 sectors are reporting year-over-year growth, led by information technology, industrials, and communication services.
Ten-year Treasury yields climbed throughout January, reaching a multi-month high early in the month. The rise in yields was largely driven by a selloff of Treasury bonds, reflecting investor concerns about persistent inflation, a slowing labor market, and the perception that the Fed may need to reduce the number of interest rate cuts in 2026. Two-year Treasuries rose about 4.5 basis points in January.
Crude oil prices were on track for the first monthly increase in four months. Severe winter weather disrupted U.S. crude production, while supply concerns pushed prices sharply higher. The dollar hovered near four-year lows, making oil cheaper for foreign buyers and boosting demand. The retail price of regular gasoline was $2.853 per gallon on January 26, $0.012 above the price a month earlier but $0.250 lower than the price a year ago.
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark the performance of specific investments.
Eye on the Month Ahead
Heading into February, investors will likely focus on international trade, AI and big tech companies, and whether there will be a shift in the U.S. monetary policy.
Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
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