Market Data as of Week Ending: 1/9/2026 unless noted otherwise
U.S. equities rose last week, overcoming heightened geopolitical tensions as most major indices closed at record highs. With an estimated 8.3% growth rate for Q4 2025, the S&P 500 is on track to achieve its 10th consecutive quarter of earnings growth. Analysts forecast 14.9% earnings growth for the S&P 500 in 2026—outpacing the 8.6% historical average and, if realized, marking a third consecutive year of double-digit increases. Small-cap stocks generally outperformed their larger-sized peers, while the style factor remained mixed. All but one major economic sector posted gains for the week, led by consumer discretionary and materials. Utilities was the only sector in negative territory and Information Technology narrowly ended the week with a slight gain of 0.03%. Foreign equities also ended the week higher; however, developed markets lagged while emerging markets outperformed relative to domestic peers.
Bonds were mostly higher as Treasury yields ended the week mixed, with lower prices offsetting income at the front end of the curve. The 2-Year Treasury yield increased to 3.54%, while the 10-Year declined to 4.18%, narrowing the 2-10 year spread to 0.64%. U.S. short-term government bonds were the only major sector in negative territory, as most other segments benefited from favorable spreads and decreasing interest-rate risk further out on the curve. Credit spreads remain historically tight, with investment-grade and high-yield corporate yields ending the week at 4.84% and 7.01%, respectively.
Economic data releases were dominated by labor market indicators, which showed a mixed labor market, increasing expectations that the Federal Reserve may hold interest rates steady. U.S. payrolls rose by only 50,000 in December, well below expectations and following downward revisions to prior months, while fullyear 2025 job growth slowed sharply to an average of 49,000 per month. The unemployment rate edged down to 4.4% and wage growth reaccelerated to 3.8% year over year, even as job openings fell to their lowest level since September 2024, signaling a mixed labor market. Outside of employment, ISM surveys showed a bifurcated economy, with services expanding solidly (54.4) while manufacturing remained in contraction (47.9) for a tenth consecutive month. Housing data weakened further, as starts fell to their lowest level since the pandemic downturn. Consumer sentiment from the University of Michigan improved modestly for a second month to 54.0 in January, driven by gains among lower-income households, reinforcing expectations that the Federal Reserve may keep policy rates on hold.