As expected, the first full trading week of January 2026 was an exciting one for the S&P 500 (Index: SPX), which closed out the week at 6,966.28, a new record high and 1.6% higher than it ended the previous trading week.
Although we anticipated the week would be a good one for oil and gas industry stocks because the U.S.' successful extraction of Venezuela's dictator from power during the preceding weekend, there were two other big news events to push stock prices higher across the board during the week that was.
The first of those additional headlines that moved the markets originated at the annual Consumer Electronics Show in Las Vegas on Tuesday, 6 January 2025. Nelson Huang, the CEO of Nvidia (Nasdaq: NVDA) announced the company was in full production of its next generation AI-industry leading computer chips and that data storage was becoming a constraint on the sector's growth, which prompted the stocks of hard drive and memory storage to surge.
The second additional headline came on Friday, 9 January 2025 with the release of the December 2025 employment situation report. At first glance, it contained the bad news that 2025 closed out with anemic job growth. But here, this bad news increased the likelihood the Fed will cut the Federal Funds Rate in 2026 after a pause, which benefits the companies that will be borrowing big to support their investments in AI technologies. The CME Group's FedWatch Tool projects the Fed will hold the Federal Funds Rate steady until 17 June (2026-Q2), when it anticipates a quarter point rate cut. The tool forecasts another quarter point reduction on 16 September (2026-Q3).
Investor attention however appears to be focused on the upcoming quarter of 2026-Q2, given the potential the Fed will announce its next rate sometime during the quarter. The latest update finds the trajectory of the S&P 500 falling within the middle of the chart's redzone forecast range, which assumes investors would be focused on 2026-Q1 while it runs.
There was a lot of new information investors had to absorb during the trading week ending on Friday, 9 January 2026. Here are the week's market-moving headlines:
- Monday, 5 January 2026
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- Signs and portents for the U.S. economy:
- Trump says Venezuela’s president Maduro captured after pre-dawn operation
- US pushes oil majors to invest big in Venezuela if they want to recover debts
- Venezuela's oil exports paralyzed amid political turmoil, sources say
- Oil settles $1 higher as traders assess Venezuela upheaval
- Oil prices forecast to ease in 2026 under pressure from ample supply
- OPEC+ maintains plan for steady crude output amid global friction
- US factory sector contracts for 10th straight month in December
- Record copper price signals accelerating race for supplies
- Fed minions think inflation may drop to 2% in 2026, below the 3% they've been targeting in last three years. Also starting to think tariffs reduce inflation rather than increase it:
- Fed's Paulson 'cautiously optimistic' three-month inflation will be 2% by year-end
- Tariffs may lower inflation, SF Fed research suggests
- Fed's Kashkari sees risk jobless rate could 'pop' higher
- Bigger trouble developing in China:
- BOJ minions say they're not done turning the screws on Japan's interest rates:
- Bank of Japan chief vows to keep raising interest rates
- Japan's factory activity steadies as demand declines slow, PMI shows
- Dow logged a record close as Wall Street rallied on U.S. action in Venezuela
- Tuesday, 6 January 2026
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- Signs and portents for the U.S. economy:
- WTI crude extends decline after Trump says Venezuela will send oil to US
- China buys more US soybeans, total purchases near 10 million tons
- Fed minions talk about potential 2026 rate cuts:
- https://www.reuters.com/sustainability/boards-policy-regulation/fed-should-deliver-big-rate-cuts-this-year-miran-tells-fox-business-2026-01-06/
- Fed's Barkin says future rate changes should be fine-tuned based on incoming data
- BOJ minions pressured to target 2% annual inflation:
- Government panel member urges BOJ to anchor inflation expectations around 2%
- Japan lobby group for small firms urges government action on inflation
- Japan's cash in circulation falls for first time in 18 years in 2025 on BOJ stimulus exit
- ECB minions get better economic data for Eurozone:
- Euro zone growth slows in December but completes strongest quarter since 2023
- Euro zone inflation dips, growth holds up, backing ECB's sanguine narrative
- S&P 500 notches fresh all-time high with 7,000 now in sight
- S&P 500, Dow close at all-time high as stocks climb on tech trade revival
- Chip stocks jump on AI optimism; Dow ends at record high
- Nvidia, AMD's announcements at CES see largely bullish views from analysts
- Micron, Sandisk, memory stocks continue to soar amid AI demand
- Gold inches closer to record peak as geopolitical risks lift safe-haven demand
- Wednesday, 7 January 2026
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- Signs and portents for the U.S. economy:
- US will ban Wall Street investors from buying single-family homes, Trump says
- US job openings slide to 14-month low; hiring weak in November
- US bank profits to surge on investment banking jump in fourth quarter
- US service sector activity picks up in December, employment rebounds
- Oil falls, stocks mixed after Trump reveals plan for Venezuelan oil
- Trump targets defense contractor pay, buybacks and dividends
- Bigger trouble, stimulus developing in China:
- Eurozone economy described as "benign":
- Wall Street ended mostly lower as investors weigh latest labor data
- Thursday, 8 January 2026
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- Signs and portents for the U.S. economy:
- Oil settles up 3% on Venezuela news, supply worries in Russia, Iraq and Iran
- BEA says it will use US September, November CPI averages to calculate October PCE inflation
- US October trade deficit lowest since 2009 as imports decline
- US third-quarter productivity rises at fastest pace in two years
- Trump orders his 'Representatives' to buy $200 billion in mortgage bonds
- Fed minions expected to cut U.S. interest rates a little during 2026, one minions wants to see bigger drop in rates:
- Fed to cut rates slightly this year, CBO forecasts
- Fed's Miran says he's looking for rate cut of 150 basis points this year
- US December jobless rate likely at 4.6%, Chicago Fed says
- Bigger trouble developing in China:
- China warns of battery industry overcapacity risks
- Chinese refiners expected to replace Venezuelan oil with Iranian crude, traders say
- Bigger trouble, wage inflation developing in Japan:
- China curbs rare earth exports to Japanese companies after dual-use ban, WSJ reports
- Bank of Japan sees wage hikes continuing, China tension clouds outlook
- U.S. stocks end mixed as investors assess labor data, defense trade
- Friday, 9 January 2026
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- Signs and portents for the U.S. economy:
- US job growth stuck at stall speed in December; unemployment rate dips to 4.4%
- Oil gains as market assesses protests in Iran, dealmaking for Venezuela
- Bessent says US Treasury can easily cover any tariff refunds
- Fed minions still not expected to cut rates in January 2026, see housing affordability as a supply problem, are still fighting Bidenflation, no comment on jobless rate coming in lower than they expected:
- January Fed rate cut bets dip after latest labor report
- Two Fed officials say key to fixing US housing more about supply than financing
- Fed's Bostic says high inflation still central bank's main challenge -radio interview
- U.S. economy adds 50,000 jobs in December, unemployment rate at 4.4%
- Bigger trouble, stimulus developing in China:
- China car sales may stagnate in 2026, strong EV export growth unlikely to last
- China's consumer inflation scales 3-year high but deflation battle far from over
- S&P 500, Dow set all-time closing highs after jobs report, no SCOTUS ruling on tariffs
The Atlanta Fed's GDPNow toolestimates real GDP growth in the U.S. during 2025-Q4 jumped to +5.1% from the +3.0% growth it anticipated a week earlier.
Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull celebrating new record highs in the S&P 500 index".
Update 16 January 2026: In writing up the past week's market action, we discovered we incorrectly identified the future quarter for which the assumption behind the redzone forecast range applies. Instead of 2026-Q1 as the original chart indicated, it should read 2026-Q2, which matches the alignment of the forecast range depicted in the chart. We've corrected the related text in the article to agree with this assumption, which we've emphasized with boldface font. Our apologies for not catching it sooner.