Key Focus This Week “Earnings momentum, key macro data, and policy-related events shape a shortened trading week”

Markets enter the week of January 19 following mixed global performance, with U.S. equity and bond markets closed on Monday for Martin Luther King Jr. Day, compressing the trading week to four sessions. Tighter liquidity conditions may heighten market sensitivity to incremental information and short-term volatility.

The fourth-quarter earnings season remains the primary driver, with companies across major sectors reporting results. Netflix and Intel will be closely watched for signals on consumer demand, capital spending, and broader industry trends. In a relatively stable policy environment, earnings outcomes and guidance are expected to continue driving sector rotation and stock-specific dispersion.

Macro attention will focus on U.S. third-quarter GDP (final) and the PCE price index, which will help refine the inflation outlook following last week’s CPI release. From a policy perspective, remarks by U.S. President Donald Trump on housing-related issues may temporarily elevate market sensitivity, particularly across housing-linked sectors.

Last Week’s Key Economic Data & News Recap

U.S. Equity Markets Pulled Back After Early-Week Record Highs

U.S. equity markets ended the week modestly lower after advancing to record levels earlier in the period. Major indices moved higher at the start of the week, supported by momentum from the prior week, before retreating as investors digested inflation data and the first round of fourth-quarter earnings releases. Daily market coverage during the week showed a pattern of early gains followed by late-session pullbacks, indicating a moderation in risk-taking after recent highs.

Sector performance reflected this shift in tone. Cyclical sectors that had led gains earlier showed signs of consolidation, while market leadership narrowed as investors reassessed valuations following the recent rally.

Inflation Data Pointed to Stable Price Trends

Inflation data released mid-week showed continued moderation in price pressures. The Consumer Price Index (CPI) for December increased 0.3% month-over-month, while the year-over-year rate remained unchanged at 2.7%, matching November’s reading. Core CPI, which excludes food and energy, rose 0.2% month-over-month and held steady at 2.6% year-over-year.

Compared with prior months, the data suggested that inflation trends remained stable rather than accelerating, reinforcing expectations that monetary policy would remain unchanged in the near term. Market reaction to the CPI release was measured, with limited follow-through in equities and bond yields following the announcement.

Earnings Season Began with Mixed Market Reactions

The start of fourth-quarter earnings season featured results from several large U.S. financial institutions. Reported earnings generally showed improved profitability compared with the same period last year, reflecting stronger trading activity and a gradual recovery in investment banking revenues. Despite these results, share prices of several major banks declined following their earnings releases.

Market reaction indicated that investors were focused less on headline earnings and more on revenue composition, forward guidance, and policy-related considerations. In particular, discussions around regulatory and political developments affecting the banking sector appeared to weigh on sentiment, contributing to financial stocks underperforming the broader market during the week.

Precious Metals Extended Gains as Cross-Asset Volatility Persisted

Precious metals remained a notable area of strength during the week. Silver prices stayed near recent highs, extending gains accumulated earlier in 2026 after a sharp rally from late-2025 levels. Compared with year-end pricing, silver has posted substantial year-to-date increases, reflecting sustained demand amid volatile equity market conditions.

Gold prices also remained elevated over the week, holding onto recent gains as investors maintained exposure to defensive assets. The continued strength in precious metals contrasted with choppier performance in equities, highlighting ongoing cross-asset dispersion as markets balanced inflation data, earnings developments, and broader macro uncertainty.