Weekly Market Performance — January 9, 2026

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of January 5, 2026. Headlines remained in high supply over the first full week of trading in 2026, with investors parsing high-profile economic data, announcements out of Washington, and geopolitical risks. Nonetheless, U.S. stocks powered higher to secure a healthy weekly advance. Across the pond, European shares gained ground on the back of tech shares, while Asian markets ended mostly higher. In fixed income, domestic bonds also posted a positive week, while commodities and currencies broadly moved higher as crude oil, gold, and silver strengthened alongside the U.S. dollar.

Stock Index Performance

U.S. and International Equities

U.S. Equities: Major equity averages started their 2026 campaign off with a bright note, ending the first full week of trading in the green after a modest gain in the first session of the new year last Friday. Early week headlines were dominated by the early Saturday morning capture of Venezuelan President Nicolas Maduro by U.S. forces in Caracas on narco-terrorism, illegal weapon, and drug importation charges. The stock market's long track record of looking past geopolitical events broadly remained the case, although energy names received some support from rising crude prices while shares of oil refiners rose later in the week following President Trump’s call for Venezuela to turn over millions of barrels of oil to the U.S.

The artificial intelligence (AI) theme also remained top of mind following a flurry of upbeat headlines from the CES trade show in Las Vegas — lifting memory companies — and remarks around strong demand from AI theme bellwether NVIDIA (NVDA). However, rotation dynamics were arguably a bigger story as cyclical pockets of the market benefited investors looking beyond big tech names. Small caps were also a beneficiary, powering fresh records for the Russell 2000 Index. Simultaneously, defense names were lifted by President Trump signaling his intent to ramp up military spending to $1.5 trillion in 2027, just hours after pressuring military contractors via an executive order aimed to prevent defense companies from issuing dividends or initiating share buybacks. Nonetheless, despite mixed market breadth over the last five days stocks rose to end the week, shrugging off Supreme Court tariff ruling jitters and a mixed jobs report that saw unemployment tick lower while payrolls missed consensus forecasts.

International Equities: European stocks gained ground with the STOXX 600 Index surpassing the 600-point mark for the first time and ending the week at record levels. Technology names led the region’s advance as shares of ASML rallied on a recent analyst upgrade, optimism around the expected memory-chip super cycle, and bets of a memory chip shortage. Defense names also outperformed on potential U.S. military spending increases and raised guidance from Dassault Aviation. On the macro front, Eurozone consumer inflation remained at the European Central Bank’s (ECB) 2% target, reinforcing the expectation for monetary policy to remain unchanged this year, while in M&A news, Rio Tinto Group and Glencore reportedly entered talks to form the world’s largest miner.

On the other side of the globe, Asian exchanges ended mostly higher. Leading technology and AI firms led the charge with Taiwan Semiconductor (TSM) leading the Taiex to all-time highs during the week while SK Hynix and Samsung helped power fresh records in Seoul. Japanese benchmarks led the advance, aided by a Friday rally on yen weakness and a rebound in household spending against expectations of a decline, led by a spike in auto sales. Hong Kong edged lower amid China and Japan’s diplomatic rift over Taiwan returning to the front burner after Beijing banned the export of civilian-military dual use goods and launching an anti-dumping probe, but mainland China gained on homegrown tech enthusiasm after authorities expressed artificial intelligence (AI) growth goals for the next two years.

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, measured by the Bloomberg Aggregate Index traded higher this week as Treasury yields and spreads were generally lower during the week. The mortgage-backed securities (MBS) market made headlines Friday after President Trump called for Freddie Mac and Fannie Mae to purchase $200 billion in mortgage bonds, aimed at improving housing affordability via lowering mortgage rates. And after securitized markets — particularly agency MBS — had its best year in over a decade in 2025, returning more than 8.5%, what's next for agency MBS? After last year’s outperformance, MBS spreads have tightened meaningfully and are below their longer-term averages, which means future returns will likely come more from coupon payments versus price appreciation. Importantly, price appreciation from falling Treasury yields and tightening spreads accounted for over 5% of the total returns in 2025 with coupon income comprising the rest. While the near-term momentum of falling interest rate volatility and constrained net supply will likely continue into the first half of the year, already tight spreads and eventually lower mortgage rates, which will increase prepayment risks, potentially cap returns for 2026. On the other hand, Fannie Mae and Freddie Mac have already become large buyers of MBS to help offset the Fed’s balance sheet runoff and increase its retained portfolio as it prepares to eventually go public again, which will likely keep spreads contained. We still view MBS as attractive, but returns in 2026 are unlikely to match those of 2025.

Commodities and Currencies: The broader commodities complex traded higher this week, measured by a healthy rise in the Bloomberg Commodities Index. West Texas Intermediate (WTI) crude oil prices oscillated around the week-to-date flat line before jumping Friday on escalating protests in Iran, the fourth-largest OPEC+ producer, and signs of strength in the U.S. economy via a drop in the unemployment rate. Broad geopolitical uncertainty was also bullish for prices this week, although last weekend’s developments in Venezuela are not expected to move the needle much for oil prices outside of some potential support due to Chinese buyers searching for alternatives to discounted Venezuelan barrels. In metals, gold picked up where it left off in 2025, posting a strong gain with the yellow metal underpinned by geopolitical risks and as China’s central bank extending its monthly buying streak to 14. Silver prices rose sharply. Elsewhere, the U.S. dollar posted back-to-back weekly gains.

Economic Weekly Roundup

Revisions Giving Warning Signs. Revisions are an important signal, and there was a note of caution in Friday morning’s non-farm payrolls print.

December payrolls grew by 50,000, net of the downward revisions to the previous two months. The 3-month average change in payrolls is now -22,000. At the start of last year, the 3-month average was 232,000. The unemployment rate declined slightly to 4.4% from 4.5%, suggesting the labor market is still on the tighter side. Average hourly earnings grew 3.8% from a year ago, outpacing inflation. Both participation rates and employment-population ratios were little changed in December as demand for labor weakened.

Bottom Line: Weaker labor demand is more of a story than lower labor supply — allegedly from stricter immigration policy. Typically, when firms cut or pause hiring plans, consumer spending and broader economic activity slows. Going forward, investors should track alternative, private data for emerging trends in hiring and firing. For now, the labor market is stable enough for investors to focus on the tailwinds of large tax refunds and the promises of greater productivity growth to fuel the economy in 2026.

The Week Ahead

The following economic data is slated for the week ahead, but some U.S. government data releases are slated for intermittent release before month-end due to the recent shutdown.  

• Monday: No economic releases scheduled

• Tuesday: NFIB Small Business Optimism (Dec), Headline and Core CPI (Dec), Real Average Weekly and Hourly Earnings (Dec), New Home Sales (Sep and Oct), Federal Budget Balance (Dec)

• Wednesday: MBA Mortgage Applications (Jan 9), Headline and Core PPI (Oct and Nov), Retail Sales (Nov), Current Account Balance (3Q), Existing Home Sales (Dec), Business Inventories (Oct), New Home Sales (Nov)

• Thursday: Philadelphia Fed Business Outlook (Jan), Initial Jobless Claims (Jan 10), Continuing Claims (Jan 3), Import and Export Price Indexes (Oct and Nov), Empire Manufacturing (Jan), Total Net TIC Flows (Nov), Net Long-term TIC Flows (Nov)

• Friday: New York Fed Services Business Activity (Jan), Industrial Production (Dec), Manufacturing (SIC) Production (Dec), Capacity Utilization (Dec), NAHB Housing Market Index (Jan)

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

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.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

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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