You wake up, check your phone, and see red. It's a gut-punch feeling. Honestly, if you’re looking at your portfolio today, Saturday, January 17, 2026, you might be feeling a little uneasy. The short answer to "is the stock market down right now" depends entirely on your timeframe.
If you are looking at the week that just wrapped up, then yeah, it’s down. The major indexes—the S&P 500, the Dow, and the Nasdaq—all limped across the finish line on Friday with weekly losses. Not massive, mind you, but enough to make you notice. The Dow Jones Industrial Average dropped about 0.3% for the week, while the tech-heavy Nasdaq took a harder hit, losing 0.7%.
But here is the thing.
Context is everything. While the last five days felt like a slog, the bigger picture is actually kind of wild. We are currently sitting in the first year of President Trump’s second term, and despite the "dizzying mix" of record highs and sudden pullbacks, the S&P 500 is actually up about 16% since he took office last January.
It’s been a weird year. Basically, every time the market dips, investors rush in to "buy the TACO trade"—a nickname Wall Street has given to the current trend of buying every policy-driven dip.
Why is the Stock Market Down Right Now?
So, if the long-term trend is up, why did this week feel so crummy? There isn’t just one smoking gun. It’s more like a collection of "vibes" and data points that have traders feeling twitchy.
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First, let's talk about the Federal Reserve. Everyone is obsessed with who is going to lead the Fed when Jerome Powell’s term ends in May. This week, Trump hinted he might not go with Kevin Hassett, a favorite who many expected would slash rates aggressively. That uncertainty sent Treasury yields—specifically the 10-year—shooting up to 4.23%, the highest we've seen in four months. When yields go up, stocks (especially tech) usually feel the heat.
Then you have the "sector rotation" happening. For years, it was all about Big Tech and AI. But lately? The tables are turning.
The Great Rotation of 2026
While the Nasdaq is struggling, other areas are actually thriving. Look at what’s happening in basic materials and mining. Gold and silver have been hitting record highs this month. In fact, silver just hit another record yesterday.
- Mining and Materials: Up over 9% so far this year.
- Financials: Big banks like PNC reported huge earnings this week, with profit up 25%.
- Small Caps: The Russell 2000 is actually outperforming the S&P 500 year-to-date.
It’s a K-shaped market. Some things are flying; others are dying. Software stocks like Adobe and Salesforce have had a rough start to 2026, dropping double digits in just the first two weeks of the year. Meanwhile, chipmakers like TSMC are reporting record profits because the world still can't get enough AI hardware.
Is a Crash Imminent? 155 Years of History Says... Maybe
Whenever we see a weekly dip, the "C-word" starts getting tossed around. Crash.
History is a funny thing. Right now, the S&P 500 Shiller PE ratio—a measure of how expensive stocks are—is at its second-highest level in history. The only time it was higher was right before the Dot Com bubble burst. That sounds terrifying, right?
But "expensive" doesn't mean "about to explode." Market cycles aren't linear. Analysts like Sean Williams from The Motley Fool have pointed out that while a decline is "expected" eventually, 155 years of data suggests a crash isn't necessarily imminent just because we're at a high.
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Actually, the average bull market lasts over 1,000 days. We’re currently in a confirmed bull market that started back in late 2022. If history rhymes, we might have more room to run, even if the road is bumpy.
The Trump Factor and 2026 Tariffs
The elephant in the room is policy. The "Liberation Day" tariffs announced last April changed the game. While tariffs usually scare the market, the 2025 experience showed that corporate tax cuts and deregulation are currently acting as a massive floor.
Cathie Wood over at Ark Invest is calling the U.S. economy a "coiled spring." She thinks the combination of AI-driven productivity and lower taxes could push the market to new heights in 2026, despite the sticky inflation we're seeing near the 3% mark.
What You Should Actually Do
Watching the ticker change colors from green to red is a great way to give yourself an ulcer. If you're wondering if you should sell because the stock market is down right now, you need to ask yourself what your "exit" looks like.
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If you are a day trader, yeah, the rising Treasury yields are a problem. But for the rest of us? The "TACO trade" mentality of buying the dip has been the winning strategy for twelve months straight.
Here is the playbook for the next few weeks:
- Watch the 10-Year Yield: If it stays above 4.2%, expect tech stocks to stay stagnant or drop further.
- Look Beyond Tech: The "rotation" is real. Industrials, banks, and even mining stocks (look at the Mexican BMV performance lately) are where the momentum is shifting.
- Prepare for Monday: The market is closed this Monday, January 19, for Martin Luther King Jr. Day. Use the long weekend to rebalance rather than panic-sell.
- Ignore the "Noise" of 2026: We are seeing a lot of political drama regarding Fed independence. Don't let a Truth Social post or a leaked jobs report dictate your 401(k) strategy.
The market is "unstable" rather than "broken." We're seeing a broadening out of performance where the "winners" aren't just the same five tech companies anymore. That's actually a healthy sign for the long term, even if it makes the weekly charts look a bit messy.
Stay diversified. Keep an eye on those interest rates. And honestly? Maybe stop checking the app every fifteen minutes.
Next Step: Review your portfolio's exposure to "software-as-a-service" stocks, as they are currently the biggest laggards in 2026, and consider if you need more "real-world" assets like financials or industrials to balance the volatility.