These monthly market commentaries share a synopsis of the U.S. financial markets with intelligent insights.
Latest Commentary:
January 2026 Market Recap
January is often considered the bellwether month for the U.S. stock market. If the S&P 500 is up in January, it signals a good year is ahead. The data supports this expectation —more than 80% of the time the S&P 500 has been up for the year when the January return has been positive. This is known as the January Effect. Unfortunately, the statistical significance of the January Effect is not as strong as some make it seem. In the years when the January performance is negative, the full year results are positive about 50% of the time. And, across all years, the S&P 500 has delivered positive returns more than two-thirds of the years.
Here are observations on what occurred across the investment markets in January:
Broad Market Performance1
| Index | Jan | 3M | 1 Year | 3 Year |
| S&P 500 | 1.5 | 1.8 | 16.4 | 21.1 |
| MSCI EAFE | 5.2 | 9.1 | 31.2 | 16.2 |
| Bloomberg US Aggregate Bond | 0.1 | 0.6 | 6.9 | 3.7 |
Data as of January 31, 2026
Domestic Equity2
International and Global Equities3
Fixed Income Markets4
Specialty Markets5
Sectors6
Dear Valued Investor,
Other than the historic volatility in gold and silver prices, the biggest news for markets in January may have been the nomination of Kevin Warsh as the next Federal Reserve (Fed) Chair. We anticipate a Warsh-led Fed will be able to steer the Federal Open Market Committee (FOMC) toward two rate cuts later this year, with help from easing inflation pressure. Remember, the Chair just gets one vote on the 12-member FOMC, so the health of the labor market and the path of inflation will be critical.
Warsh’s track record of flexibility on interest rate policy, his credibility with Fed officials, and prior advocacy for central bank independence should help ease concerns about the President’s influence. However, his preference for a smaller Fed balance sheet, now over $6.6trillion, and his emphasis on fiscal responsibility could complicate the Treasury’s efforts to refinance government debt at lower rates. This dynamic will be important to watch because the U.S. government’s fiscal situation is not on a sustainable path.
One of the reasons Warsh is likely to push for lower rates, despite still-elevated inflation, is productivity gains from AI can help the economy grow faster with less inflation. Recent data shows U.S. nonfarm business productivity rose 4.9% in the third quarter of 2025, strong enough to counter inflationary pressures even amid solid economic growth. Technology and more efficient processes enable firms to produce more with fewer hours worked, a key reason economic growth will likely help push stocks higher.
AI investment is also helping drive a strong fourth quarter earnings season. S&P 500 companies are on track to deliver a fifth consecutive quarter of double-digit earnings growth. While this is driven mostly by the tech sector’s 30% earnings increase, keep in mind industrials are tracking toward 25% earnings growth. Several leading companies have cited tangible benefits of AI during earnings season, including Bank of America, Meta, and Costco. Strong earnings can help solidify the floor under stock prices, while cooling inflation and stable interest rates can help raise the ceiling by supporting higher valuations.
Looking ahead, the backdrop for stocks remains favorable. Massive AI investment is driving gains in productivity and earnings. Consumers will get tax refunds associated with the One Big Beautiful Bill Act starting this month. Positive stock market performance in January often bodes well for annual returns, though past performance does not guarantee future results. And increased participation in this bull market is encouraging — the average stock has outperformed the S&P 500 Index over the past three months*.
AI scrutiny, deficit spending, and geopolitics remain key risks. New Fed Chairs are often tested by markets, and midterm election years tend to be more volatile. Don’t let any volatility that may come along shake your confidence. It will not shake ours. We believe volatility creates opportunity. Keep buying stocks.
Sincerely,
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Disclosures and references:
1-6 All data referenced in the table and comments supplied by Morningstar.
This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Global Retirement Partners, LLC or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision, and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for informational purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.
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