Weekly Market Performance — January 23, 2026

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of January 19, 2026. Four days of packed headlines and global volatility across markets left U.S. equities slightly lower in an abbreviated week of trading. Tariff threats across the Atlantic dented risk sentiment following the long weekend before a bounce in big tech names helped stocks recoup the geopolitical-fueled slide. International markets ended mixed with Europe snapping a five-week win streak while artificial intelligence (AI) heavy markets in Asia continued to outperform. Treasuries were little changed after digesting a rout in the Japanese Government Bond (JGB) market, while commodities broadly gained ground.

Stock Index Performance

U.S. and International Equities

U.S. Equities: A holiday-shortened week didn’t stop headlines from remaining in high supply across markets for a second consecutive week, leading major averages to back-to-back weekly losses. U.S. stocks returned to action from the long weekend with sharp losses following a fresh ramp in President Trump’s tariff rhetoric in efforts to gain control of Greenland. Monday’s threats of 10% levies on eight European trade partners (plus €93 billion in potential countermeasures) fueled a risk-off tone that saw the S&P 500 and Nasdaq both shed 2%.

Nonetheless, Wall Street bulls displayed some resilience. The S&P 500 clawed back part of Tuesday’s tariff-fueled slide with a stout rebound as cooling tensions in the Arctic and across the Atlantic sparked a cross-asset relief rally after President Trump touted a framework deal with Greenland via NATO, while also removing recent tariff threats and ruled out using military force. The geopolitical relief rally carried over into the latter half of the week with some additional help from tech names after NVIDIA (NVDA) CEO Jensen Huang highlighted strong demand and stated that multi-trillion-dollar investments will be required for the artificial intelligence (AI) build out. Simultaneously, Greenland Prime Minister Nielsen hinted that he is open to a permanent NATO mission and increased defense.

On the earnings front, General Electric (GE) and Procter & Gamble (PG) shares slipped on a disappointing outlook and cautious consumer takeaways, respectively, while Intel (INTC) sank in response to Thursday’s warning of manufacturing problems and disappointing guidance.

International Equities: The pan-European STOXX 600 Index snapped a five-week winning streak, suffering its biggest weekly loss in two months amid the brief transatlantic spat. Sentiment across the region was broadly risk off, with French shares among laggards after failing to fully retrace early week losses driven by threats of a 200% tariff on French wine. Meanwhile, the U.K. was among relative outperformers, supported by remarks from Finance Minister Reeves that that the sovereign state is well positioned to avoid tax hikes, and better-than-expected economic data. In earnings, highlights included stronger-than-expected cash flow figures for Volkswagen and Michelin, while shares of Ubisoft plummeted after the French video game maker slashed guidance and canceled six games.

Major Asian markets were mixed over the last five days with South Korea and Taiwan leading gains on continued homegrown AI chip enthusiasm and the mid-week comments from NVDA CEO Huang. Japanese shares remained top of mind, ending the week lower, after investors sold the news of an early February snap election — brushing off vows for a temporary sales tax cut on food to focus on political uncertainty jitters — while also facing downside pressure from bank shares as a result of the slump in Japanese government bonds (JGB). Elsewhere, losses in Hong Kong were capped by mid-week support from reports that Alibaba is preparing to list its chipmaking unit, and mainland China dropped as regulator efforts to cool the rally remained in focus.

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, measured by the Bloomberg Aggregate Index, were little changed after paring early week losses driven in part by a spike in JGB yields spilling over across the Pacific. While Treasuries faced a Tuesday rout and equity markets were volatile, public corporate credit bond markets broadly ignored, frankly, everything.

Spreads for investment-grade (IG) and high yield (HY) bonds have tightened this week and at 0.70% and 2.47%, respectively, are at or close to secular tights for both asset classes. Historically, when corporate bond spreads reach very tight levels, this portends poor excess returns relative to Treasuries on a go-forward basis, as the asymmetry of potential outcomes skews towards widening. Per Goldman Sachs, the mean and median 12-month forward excess return for IG when spreads averaged at or below 0.88% (below the 10th historical percentile), were -1.3% and -0.6%, respectively. As well, the mean and median 12-month forward excess returns for HY when spreads averaged at or below 2.95% (below the 10th historical percentile), were -4.1% and -3.3%, respectively. That said, given the current (and expected) macroeconomic environment with above-trend U.S. GDP growth, a Federal Reserve that is still in cutting mode, and cooling inflation, spreads can remain range-bound, which is our expectation. Additionally, all-in yields are still trading around their 65th percentile for the IG index and 34th percentile for HY, which should continue to attract demand from total return investors.

Commodities and Currencies: The broader commodities complex posted strong gains over the last five days amid widespread gains. Natural gas made headlines for the energy complex with a 68% surge on the back of severe winter weather forecasts for the weekend across dozens of U.S. states, driving increased demand to heat homes. Geopolitical developments remained top of mind for crude oil investors as West Texas Intermediate (WTI) crude prices held on to a healthy weekly advance amid volatile trade and geopolitical tensions between the U.S and Europe. Oil markets received additional support to end the week after President Trump revived threats to use force against Iran while Russia threw cold water on Ukrainian peace talks. Elsewhere, precious metals remained one of the preferred haven assets in the latest bout of volatility, boosting gold and silver prices, while the dollar weakened against strength from the euro and yen.

Economic Weekly Roundup

This week’s economic calendar was fairly light, with a slight upward revision to the final print for third quarter economic growth drawing some attention on Thursday. More importantly to markets slate was a dual release of inflation data, with investors cheering October and November results delayed by last quarter’s government shutdown. Among highlights, core services ex housing in November rose 0.25% month to month, pushing the annual rate up to 3.3%.

We expect insurance and health care costs to soften later this year but, in the meantime, inflation will continue to run on the hotter side. Cost pressures on health care are demand driven as we’ve seen in the strong earnings data, illustrating a constructive context for this sector. With inflation temporarily running too hot, and unknown impacts from tariff pass throughs, the Federal Open Market Committee (FOMC) is likely to announce no changes to monetary policy at the end of next Wednesday’s meeting. The FOMC will not likely return to rate cuts until late Q2.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: Chicago Fed National Activity Index (Oct and Nov), Durable Goods Orders (Nov preliminary), Capital Goods Orders and Shipments (Nov preliminary), Dallas Fed Manufacturing Activity (Jan)

• Tuesday: ADP Weekly Employment Change (Jan 3), FHFA House Price Index (Nov), S&P Case-Shiller 20-City and National Home Price Index (Nov), Richmond Fed Manufacturing Index and Business Conditions (Jan), Conference Board Consumer Confidence report (Jan), Dallas Fed Services Activity (Jan)

• Wednesday: MBA Mortgage Applications (Jan 23), FOMC Rate Decision

• Thursday: Nonfarm Productivity (3Q final), Unit Labor Costs (3Q final), Initial Jobless Claims (Jan 24), Continuing Claims (Jan 17), Trade Balance (Nov), Factory Orders (Nov), Durable Goods Orders (Nov final), Durable Goods Orders (Nov final), Capital Goods Orders and Shipments (Nov final), Wholesale Inventories (Nov final), Wholesale Trade Sales (Nov)

• Friday: Headline and Core PPI (Dec), MNI Chicago PMI (Jan)

  
  

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Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

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Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor's holdings.

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