Honestly, the vibe on Wall Street right now is a bit... weird. If you’ve been glued to your portfolio this weekend, you’ve probably noticed that the "Magnificent Seven" aren't looking so magnificent lately. In fact, they’ve been dragging their feet. Apple and Meta are both down about 6% since the calendar flipped to 2026. Microsoft isn't far behind, slumped nearly 5% this month alone.
But here is the kicker. Even with the tech titans sweating, the broader market is weirdly resilient.
The S&P 500 actually managed to eke out a 1.4% gain so far this year. It’s like the market is finally learning to walk without its tech crutches. We’re seeing a massive rotation. Money is pouring into the "unloved" sectors—think consumer staples, materials, and industrials. These are the boring companies that make your soap and steel, and they are suddenly the belle of the ball. This broadening of the rally is basically what every analyst has been begging for since the AI fever took over in 2023.
What’s Shaking the US Stock Markets Today News
The big drama this week isn't just about stock prices; it’s about who’s running the show in Washington.
Investors are currently obsessing over the Federal Reserve. There’s a lot of chatter about Chair Jerome Powell facing a criminal probe from the Justice Department. Yeah, you read that right. On top of that, President Trump is hinting at who might take the reins next at the Fed. For a while, everyone thought Kevin Hassett was a shoe-in, but now the momentum is shifting toward former Fed Governor Kevin Warsh.
Markets hate uncertainty. When Trump signaled he might keep Hassett in his current role instead of promoting him, stocks wobbled. Why? Because the market is trying to price in whether the Fed will actually stay independent or if it’s going to become a political football.
The Interest Rate Waiting Game
If you were hoping for a rate cut this month, don’t hold your breath. The CME FedWatch tool is showing a massive 95% probability that the Fed holds steady at the January meeting.
Inflation is still being stubborn. The latest CPI data showed prices rising at 2.7% year-over-year. It’s not a disaster, but it’s not the "mission accomplished" 2% the Fed wants. Michael Feroli over at J.P. Morgan thinks we might not see any cuts in 2026. That’s a pretty bold call considering some traders were betting on two or three.
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- Dow Jones: Recently hovered around 49,363. Close to that 50k milestone, but Salesforce and UnitedHealth have been dragging it down.
- Nasdaq: Up about 54% since its bull market began in April 2025. History says it could hit 26,108 by April this year if the trend holds.
- S&P 500: Sitting near 6,940. It’s a tug-of-war between sinking tech and rising value stocks.
The Under-the-Radar Movers
While everyone is watching Nvidia (which, to be fair, is still a beast), some other wild stuff is happening.
Have you looked at gold lately? It just hit a new peak of $4,685 an ounce. Silver is smashing through $92. When precious metals go on a tear like this, it usually means big institutional players are nervous about the dollar or geopolitical blowback. Speaking of blowback, the trade tensions involving Iran and Venezuela are keeping energy traders on edge.
There's also some interesting movement in the "equal weight" versions of the big indexes. The Invesco Equal Weight S&P 500 ETF (RSP) is actually outperforming the standard index by a decent margin this month. This tells us that the "average" stock is doing better than the "giant" stocks.
Is a Recession Actually Coming?
J.P. Morgan Global Research is putting the odds of a U.S. recession at 35% for 2026.
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That’s high enough to be annoying but not high enough to panic. The labor market is the main thing to watch. We only added about 50,000 jobs in December—lower than the 73,000 experts were looking for. However, the unemployment rate actually ticked down to 4.4%.
It’s a confusing mix of signals. You’ve got "sticky" inflation on one hand and a softening labor market on the other. This is exactly the kind of "soft landing" tightrope the Fed has been trying to walk for two years.
What You Should Actually Do Now
Stop obsessing over the daily Nasdaq fluctuations. If you’re heavily concentrated in the Magnificent Seven, you’re feeling the pain right now. But that doesn’t mean the bull market is dead. It’s just changing shape.
First, check your sector exposure. If you don't have anything in consumer staples or industrials, you're missing the current momentum. The "left behind" stocks are catching up.
Second, keep an eye on the 10-year Treasury yield. It’s sitting around 4.17% right now. If that starts climbing toward 4.5%, expect more pressure on tech stocks.
Third, watch the headlines out of Washington regarding the Fed chair. If Kevin Warsh becomes the clear frontrunner, expect the market to react to his reputation as a "hawk" (someone who likes higher rates).
Basically, the era of "just buy Big Tech and chill" is taking a breather. The market is getting more complicated, which means you have to be more strategic. Diversification isn't just a boring buzzword anymore; it's the only thing keeping most portfolios green this January.
Keep your eyes on the earnings reports coming out from the big banks. JPMorgan Chase already warned that markets might be "underappreciating" the risks of sticky inflation. If the big banks start hoarding cash or reporting higher loan defaults, that’s your signal to move even more defensively. For now, the broaden-out rally is your friend.
Next Steps for Your Portfolio:
- Rebalance: Check if your tech holdings have grown into a dangerously large percentage of your total wealth.
- Monitor the Fed: Pay attention to the January 28-29 FOMC meeting; the language they use will be more important than the "no-change" decision itself.
- Look at "Old Economy" Stocks: Materials and energy could provide a hedge if geopolitical tensions in the Middle East or South America escalate.