Markets turned volatile as AI disruption fears weighed on U.S. equities, triggering rotation into value sectors and international stocks. Meanwhile, Treasury yields declined sharply on strong demand, reinforcing bonds’ role as portfolio stabilizers. January payrolls beat expectations, giving the Fed room to remain patient as investors look ahead to GDP and Core PCE data.
Equity markets delivered a week of sharp rotation as value and cyclical sectors took the lead, lifting small caps and the Dow while growth-heavy indexes lagged. With labor demand cooling but supply tightening, investors are navigating a market where positioning and diversification matter more than headline direction.
U.S. stocks closed January mostly lower as renewed AI concerns, a steady-handed Fed, and shifting currency markets drove volatility. Here’s a concise breakdown of what moved markets and what lies ahead.
A holiday-shortened week marked by tariff headlines and global uncertainty pushed U.S. stocks modestly lower before big tech helped stabilize markets. With inflation still elevated and the Fed expected to hold rates steady, attention shifts to a pivotal week ahead.
Markets pulled back modestly as earnings season began, with small caps and international equities leading while investors assessed inflation trends, Fed policy, and a softening labor outlook.
Markets kicked off 2026 with a risk-on tone as the S&P 500 advanced and the Russell 2000 powered to fresh records. Investors weighed a headline-heavy week - geopolitics, Washington policy signals, and a mixed jobs report - while cyclical leadership broadened beyond mega-cap tech.