Markets are weird right now. If you've been staring at your screen wondering why the Dow is flat while tech looks like a heart monitor, you're not alone. It’s Sunday, January 18, 2026, and the chatter on the floor is all about one thing: the setup for next week. Specifically, everyone is obsessing over stock market futures for friday, January 23.
Why Friday? Because it’s the day the January Flash PMI data drops, but more importantly, it's the culmination of a week that’s basically a gauntlet for investors. We’ve got the World Economic Forum in Davos, a massive pile of earnings, and the looming shadow of the PCE price index—the Fed’s favorite way to measure if we’re actually beating inflation or just kidding ourselves.
The Davos Distraction and the Reality of Earnings
Honestly, Davos usually feels like a bunch of billionaires talking about saving the world while eating $500 steaks, but this year is different. With President Trump expected to speak and the rumor mill spinning about Kevin Warsh potentially becoming the next Fed Chair, every headline out of Switzerland is moving the needle.
But while the elites talk, the companies we actually own are reporting. We're heading into the meat of Q4 earnings season. On Friday the 23rd, keep an eye on SLB (the old Schlumberger) and Booz Allen Hamilton. They aren't as flashy as Nvidia, but they tell us a lot about energy demand and government spending.
💡 You might also like: Missouri Paycheck Tax Calculator: What Most People Get Wrong
- Netflix (NFLX) and 3M (MMM) report earlier in the week (Tuesday).
- Intel (INTC) and Procter & Gamble (PG) hit on Thursday.
- By the time we get to Friday’s pre-market, we'll know if the "AI Industrialization" trade is still alive or if we're just overpaying for hype.
The vibe is "cautious optimism," which is just Wall Street speak for "I’m terrified of a rug-pull."
Why the PCE Index is the Ghost in the Machine
You’ve probably seen the headlines about the 10-year Treasury yield hitting 4.23%. That’s the highest since September. It’s making everyone nervous. When yields go up, those stock market futures for friday start looking a bit shaky.
The core PCE (Personal Consumption Expenditures) inflation numbers are expected to show a 0.2% rise. If it comes in hotter? Expect a bloodbath in the Nasdaq. If it’s cooler? We might see the S&P 500 finally break toward that 7,000 mark. Right now, the futures are hovering around 6,977 for the S&P, which is basically a holding pattern.
📖 Related: Why Amazon Stock is Down Today: What Most People Get Wrong
The Semiconductor Support System
Semiconductors are the only thing keeping the lights on in some portfolios. Last Friday, the PHLX Semiconductor Index (SOX) jumped over 1% because of Micron and AMD. There’s a new US-Taiwan trade deal promising $250 billion in American production, and that’s a massive tailwind.
But there’s a catch. Software stocks like Palantir and Workday have been getting hammered lately. It’s a weird bifurcation. You’ve got the hardware guys winning and the software guys struggling to prove they can actually make money from all those chips.
The "Kevin Warsh" Factor
The market loves certainty, and right now, we don't have it at the Fed. Jerome Powell’s term is ending soon, and Trump’s hints about Kevin Warsh have sent yields climbing. Warsh is seen as more of a hawk—or at least someone who might not be as predictable as the current regime.
👉 See also: Stock Market Today Hours: Why Timing Your Trade Is Harder Than You Think
If you're trading stock market futures for friday, you have to watch the bond market. If the 10-year yield keeps creeping toward 4.5%, the "everything rally" is going to hit a wall. It’s just simple math: when you can get 4.5% on a "risk-free" government bond, paying 30x earnings for a tech stock starts to look a lot less attractive.
What You Should Actually Do
Don't get blinded by the noise. The big banks like Morgan Stanley are still calling for the S&P to hit 7,800 by year-end, but they’re also admitting 2026 is going to be "choppy." That's code for "hold onto your hat."
Here is how to play the lead-up to Friday:
- Watch the 4.25% Level: If the 10-year yield breaks and holds above 4.25%, expect the Dow and S&P futures to trade deep in the red.
- Earnings over Macro: Pay more attention to Intel’s guidance on Thursday than whatever comes out of Davos. If Intel says the chip glut is over, the Friday session will be a flyer.
- Check the "Magnificent 7" Lag: Notice how Microsoft and Alphabet aren't the ones leading the charge anymore? The "rotation trade" is moving into mid-caps and financials like PNC. Follow the volume, not the name brand.
- PCE is the Final Boss: Friday morning at 8:30 AM ET is the moment of truth. If PCE is 0.2% or lower, the weekend will be a celebration. Anything 0.4% or higher and you might want to tighten your stops.
It's a high-stakes week. The stock market futures for friday are currently pricing in a "perfect" outcome, which doesn't leave much room for error. Stay nimble, keep an eye on those yields, and don't be afraid to take some chips off the table if the PCE numbers look spicy.
Actionable Insight: Look for entry points in the S&P 500 (SPX) if it dips toward 6,900 early in the week. Historical data from this earnings season suggests that "buying the dip" after initial bank reports has been profitable, provided the tech giants don't miss their guidance on Thursday.