Despite Rollercoaster Ride, Stocks Finish the Week Little Changed

Performance for Week Ending 1.23.2026:

The Dow Jones Industrial Average (Dow) fell 0.5 percent, the Standard & Poor’s 500 Index (S&P 500) lost 0.4 percent, and the Nasdaq Composite Index (Nasdaq) dipped 0.1 percent for the week ending Jan. 23. Sector breadth was mixed, with six of the S&P sector groups closing higher and five closing lower. The energy sector (3.1 percent) was the best performer, while the financials sector (-2.5 percent) was the weakest.

*See below for Index Definitions

MARKET OBSERVATIONS: 1.19.2026  – 1.23.2026

The S&P 500 finished lower for a second straight week, its first back-to-back weekly loss since mid-June. Trading was highly volatile, with the broader market plunging by over 2 percent on Tuesday after President Trump threatened to impose ‍additional impose tariffs on several European nations due to their resistance to his ambition to acquire Greenland. Sentiment shifted on Wednesday and Thursday after Trump signaled in his address in Davos that he would not ‌use force to acquire Greenland. In a follow up post on Truth Social, Trump said after a meeting with the Secretary General of NATO Mark Rutte that a framework for a future deal over Greenland had been reached, and that he decided not to follow through with his tariff threat. Stocks rallied sharply, erasing much of Tuesday’s losses.

Q4 Earnings–So Far, So Good:: Through Friday Jan. 23, 62 companies in the S&P 500 have released Q4 results, with 81 percent beating expectations. While it’s still early, aggregate earnings for this group are up 17.7 percent from a year ago, solidly ahead of the 8.8 percent projected year-over-year growth rate for the overall quarter. On the sector level, the biggest upside surprises have come from the technology and materials sectors, while the strongest growth rates are also seen in technology and materials. According to Bloomberg, consensus expectations are for S&P 500 earnings to total 12.2 percent for 2025 and by 14.4 percent this year.

Economic Roundup: Data from payroll processor ADP showed private employers added an average of 8,000 jobs per week over the four weeks ending Dec. 27, 2025. While this marked the sixth consecutive period of job growth, the pace of hiring slowed into year end. U.S. construction spending increased more than expected in October according to the Commerce Department, which said that construction spending rose 0.5 percent after falling 0.6 percent in ‌September. Despite the month-over-month gain, spending dropped 1 percent from a year ago. Meanwhile, contracts to purchase previously owned U.S. homes unexpectedly fell in December, hitting a five-month low, as worries over the labor market and a persistent shortage of entry level houses offset lower mortgage rates. Initial claims for state unemployment benefits increased less than expected last week, suggesting the labor market maintained a steady pace of job growth in January. Lastly, a final estimate showed that the U.S. economy grew by a slightly more than expected 4.4 percent in the third quarter of 2025.

Outlook: After three consecutive years of double-digit returns, we believe the S&P 500 is well positioned to deliver another year of positive performance. Supporting our view is the favorable macro environment. The U.S. economy is growing, earnings are forecast to grow at a double-digit pace, the Federal Reserve (Fed) is expected to maintain an easing bias, and fiscal policy will be a tail wind during the first half of the year, reflecting the lagged effect of the passage of the One Big Beautiful Bill Act. History books suggest that bull markets rarely end when the Fed is easing and both the economy and earnings are growing. Typically, bull markets end when the Fed begins raising rates, not cutting, and we just don’t see rate hikes any time in the foreseeable future.

The Week Ahead: The focal point this week will be the two-day Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday where the Fed is widely expected to hold interest rates steady. Highlights on the data calendar include the Conference Board’s consumer confidence index for January, durable goods orders for November, and the December producer price index. It will be a busy week on the earnings front with 100 members of the S&P 500 scheduled to release results. Amongst this group will be four Magnificent Seven stocks, with Microsoft, Meta, and Tesla reporting on Wednesday, and Apple on Thursday. Outside of the FOMC meeting the Fed speaking calendar will be quiet with just St. Louis Fed President Alberto Musalem scheduled to speak on Friday.

— By Michael Schwager, Chief Market Strategist, Managing Director

Definitions

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally defined as the leaders in their industry. It has been a widely followed indicator of the stock market since Oct. 1, 1928.

Standard and Poor's 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Nasdaq Composite Index is a broad-based capitalization-weighted index of stocks in all three Nasdaq tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of Feb. 5, 1971.

This material contains opinions of the author, but not necessarily those of Guggenheim Partners, LLC or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. No part of this material may be reproduced or referred to in any form, without express written permission of Guggenheim Partners, LLC.