AE Wealth Management: Weekly Market Insights | 1/11/26 – 1/17/26
Weekly Market Commentary
THE WEEK IN REVIEW: Jan. 11-17, 2026
Markets have an up-and-down week
We set records on Monday for all three major U.S. indices, but we have yet to hit 7,000 on the S&P 500 and 50,000 on the Dow.1,2 News broke over the weekend that the Justice Department was launching an investigation of Federal Reserve Chair Jerome Powell over accusations that he lied to Congress on the cost overruns of the Fed’s new headquarters (more in the next section).3 The announcement tanked markets initially before they rallied later in the day, and we set new records for the Dow and the S&P 500.
The latest Consumer Price Index (CPI) number was released on Tuesday, holding steady from the prior month at 2.7%.4 However, disappointing earnings from JPMorganChase kicked off the fourth-quarter earnings reporting season, and then a sell-off in mega-cap tech stocks dragged markets lower.5 The catalyst seemed to be President Trump telling the big tech firms to “pay their way” with respect to building AI data centers.6 Then, oil prices jumped after Trump hinted at intervening in Iran’s internal turmoil. Oil came back down after Trump appeared to be backing away from an attack on Iran, but the situation is fluid.7
The selling continued on Wednesday as the Producer Price Index (PPI) ticked up a bit to 3.0%, which dampened rate-cut hopes.8 Big tech stocks again led the way as concerns about valuations and regulations weighed on the market.
Banks also contributed to the misery as Citigroup, Bank of America and Wells Fargo lost ground after reporting their quarterly results.9,10,11 The banks have positive things to say about the health of the U.S. consumer but warned that President Trump’s proposed interest rate cap on credit cards would hurt economic growth.12
As has been the case lately, markets shrugged off concerns and worries, mounting another comeback on Thursday and regaining some of the losses from the prior two sessions. The comeback stalled on Friday as markets traded in a narrow range following news that the Supreme Court plans to rule on the scope of the president’s tariff authority next Tuesday.13
All in, we were slightly down for the week. The march toward new milestones on the S&P 500 and Dow appears to be stalled, yet those levels still feel within reach.
More Fed drama not helping markets
Jerome Powell released an unprecedented video informing us that “the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multiyear project to renovate historic Federal Reserve office buildings.”14
For those too young, the incident is reminiscent of Richard Nixon’s “I am not a crook” televised address during the Watergate investigation that ultimately brought down his presidency. One of the most ironic parts of that speech was that Nixon made those comments at Disney World, a fantasy land designed for fun, not politics.15
The comparison sharpens when we hear that Representative Anna Paulina Luna from Florida (home of Disney World) referred Powell to the Justice Department for criminal charges, accusing him of two specific instances of lying under oath to Congress.16 Specifically, Luna said Powell lied about lavish amenities at the Fed’s Eccles Building and misrepresented its state of maintenance. In other words, she’s accusing Powell of overspending and failing to oversee the spending.
Let’s set the backdrop on this. Trump doesn’t like Powell because Powell will not lower rates quickly, and he views Powell as partisan. Trump also has the ability to make Powell’s life miserable so that Powell will hopefully quit before his term as Fed chair is up in May.
Is that orange really worth the squeeze? If left alone, Powell will be replaced in May. So, the worst-case scenario for Trump is that Powell will preside as Fed chair for three meetings. If this gets any legs and Powell is dragged into court, there will be a bigger political circus and we may not get a new chair, which markets won’t like.
It seems prudent for Trump to leave this one alone. If the economy is growing at 5% as projected, then we don’t need rate cuts anyway. Inflation is stuck around 3%, but if the economy grows at 5%, then job growth will likely rebound and wages will likely continue to rise — and only good things can come from that.
After Powell’s term is up in May, the president can replace him with someone more to his liking and avoid the drama. If this Powell situation progresses, we could have a long, drawn-out political free-for-all. That would introduce a lot of uncertainty for the markets, and with everything else going on in the world, we really don’t need more uncertainty. If the first half of January is any indication of what the rest of the year is going to be like, buckle up — it’s going to be an interesting ride.
Coming this week
- Markets were closed on Monday in observance of Martin Luther King Jr. Day.
- No data is scheduled to be released on Tuesday. Wednesday will include construction spending, pending home sales and MBA mortgage applications.
- The real action will be on Thursday and Friday, starting with the first reading of fourth-quarter 2025 gross domestic product (GDP). The third quarter clocked in at a 4.3% annual rate, and the latest forecast for last quarter was a whopping 5.3% annual growth rate.17,18 Thursday will also feature weekly unemployment claims, which should be more representative now that the holidays are behind us.
- On Friday, we’ll get personal consumption expenditures (PCE), the Fed’s preferred measure, plus consumer sentiment. It will be interesting to see what the Fed does with that information or whether it will even factor into rate decisions at its first meeting later this month.
- Earnings season is here. Tech, AI and consumer-focused companies especially bear watching.
- Finally, things are shaky in Iran and could boil over at any time. If things escalate there and the U.S. gets involved, all the oxygen could be sucked out of the room for markets.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500 | -0.38% | 1.38% | 16.89% | 20.17% | 12.99% |
| NASDAQ | -0.66% | 1.18% | 21.60% | 28.51% | 12.59% |
| DJIA | -0.29% | 2.70% | 14.38% | 12.90% | 9.88% |
Interest Rates: | |||||
| 1/16/2026 | 1/9/2026 | ||||
| UST 10 YR Government Bond Yield | 4.23% | 4.17% | |||
| Germany 10 YR | 2.85% | 2.83% | |||
| Japan 10 YR | 2.19% | 2.10% | |||
| 30 YR Mortgage | 6.11% | 6.16% | |||
| Oil | $59.44/ppb | $59.12/ppb | |||
| Regular Gas | $2.82/ppg | $2.80/ppg | |||
| All data as of Jan. 16, 2026. | |||||
Sources:
1 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed Jan. 18, 2026.
2 Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed Jan. 18, 2026.
3 Glenn Thrush and Colby Smith. The New York Times. Jan. 11, 2026. “Federal Prosecutors Open Investigation Into Fed Chair Powell.” https://www.nytimes.com/2026/01/11/us/politics/jerome-powell-fed-inquiry-trump.html. Accessed Jan. 18, 2026.
4 U.S. Bureau of Labor Statistics. Jan. 13, 2026. “Consumer Price Index Summary.” https://www.bls.gov/news.release/cpi.nr0.htm. Accessed Jan. 18, 2026.
5 JPMorganChase. “Fourth-Quarter 2025 Results.” https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2025/4th-quarter/d868c7ef-1670-465d-ba75-c2b36ddbcc6b.pdf. Accessed Jan. 18, 2026.
6 Jennifer A. Dlouhy and Naureen S. Malik. Yahoo! Finance. Jan. 16, 2026. “Trump Moves to Make Tech Giants Pay for Surging Power Costs.” https://finance.yahoo.com/news/trump-moves-tech-giants-pay-023341234.html. Accessed Jan. 18, 2026.
7 Chloe Taylor. CNBC. Jan. 15, 2026. “Oil falls more than 4% as traders see Trump backing away from Iran strike threats.” https://www.cnbc.com/2026/01/15/oil-prices-sink-more-than-2percent-as-trump-remarks-calm-concern-about-iran.html. Accessed Jan. 18, 2026.
8 U.S. Bureau of Labor Statistics. Jan. 14, 2026. “Producer Price Index News Release summary.” https://www.bls.gov/news.release/ppi.nr0.htm. Accessed Jan. 18, 2026.
9 Citigroup. Jan. 14, 2026. “Fourth Quarter and Full Year 2025 Results and Key Metrics.” https://www.citigroup.com/rcs/citigpa/storage/public/Earnings/Q42025/2025prqtr4rslt.pdf. Accessed Jan. 18, 2026.
10 Bank of America. Jan. 14, 2026. “Bank of America Reports Fourth Quarter 2025 Financial Results.” https://newsroom.bankofamerica.com/content/newsroom/press-releases/2026/01/bank-of-america-reports-fourth-quarter-2025-financial-results.html. Accessed Jan. 18, 2026.
11 Wells Fargo. Jan. 14, 2026. “Wells Fargo Reports Fourth Quarter 2025 Net Income of $5.4 billion, or $1.62 per Diluted Share.” https://www.wellsfargo.com/assets/pdf/about/investor-relations/earnings/fourth-quarter-2025-earnings.pdf. Accessed Jan. 18, 2026.
12 John Towfighi. CNN Business. Jan. 16, 2026. “Trump’s affordability pledge strikes directly at the heart of Wall Street’s profit engine.” https://www.cnn.com/2026/01/16/business/credit-card-cap-affordability-trump. Accessed Jan. 18, 2026.
13 Lori Ann LaRocco. CNBC. Jan. 14, 2026. “Supreme Court tariff ruling: It’s not just about refunds. Volume of U.S. freight trade could hinge on decision.” https://www.cnbc.com/2026/01/14/supreme-court-trump-tariffs-decision.html. Accessed Jan. 18, 2026.
14 Federal Reserve. Jan. 11, 2026. “Statement from Federal Reserve Chair Jerome H. Powell.” https://www.federalreserve.gov/newsevents/speech/powell20260111a.htm. Accessed Jan. 18, 2026.
15 History.com. May 28, 2025. “Nixon insists that he is ‘not a crook.’” https://www.history.com/this-day-in-history/november-17/nixon-insists-that-he-is-not-a-crook. Accessed Jan. 18, 2026.
16 Anna Paulina Luna. July 21, 2025. “Rep. Anna Paulina Luna Refers Federal Reserve Chair Jerome Powell for Criminal Investigation Over False Testimony.” https://luna.house.gov/posts/rep-anna-paulina-luna-refers-federal-reserve-chair-jerome-powell-for-criminal-investigation-over-false-testimony. Accessed Jan. 18, 2026.
17 Bureau of Economic Analysis. Dec. 23, 2025. “Gross Domestic Product, 3rd Quarter 2025 (Initial Estimate) and Corporate Profits (Preliminary).” https://www.bea.gov/news/2025/gross-domestic-product-3rd-quarter-2025-initial-estimate-and-corporate-profits. Accessed Jan. 18, 2026.
18 Federal Reserve Bank of Atlanta. Jan. 14, 2026. “GDPNow™.” https://www.atlantafed.org/cqer/research/gdpnow. Accessed Jan. 18, 2026.
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