Monthly Market Update - January 2026

January has arrived! As we closed out 2025, U.S. stock markets reached new highs of double-digit percentage gains, driven mainly from AI investment as the expectation of Federal Reserve interest rate cut. Additionally, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all reached all-time highs as well in late December.

Economic data has been released, which was delayed by a 43-day government shutdown in October and November. The reports show that there is a rise in the unemployment rate, as well as inflation data presenting cooler than anticipated. Looking ahead to 2026, continued AI impacts and upcoming resumption of full economic data reporting expects to influence the market’s direction.

We wish you an excellent start to the new year! If you have any questions, please do not hesitate to reach out. 

Stocks

Santa Claus passed over the stockings of many investors, with major U.S. equity indices finishing mixed in the final month of the year. The S&P 500 finished essentially flat for the month, up only 0.06%, while the tech-heavy NASDAQ fell -0.67%, but the Dow Jones did rise 0.92%. Early month exuberance was slowed as investors prepared their portfolios for the new year, and remained cautious on expensive tech stock. Strong economic data, and the expectations for lower interest rates in the coming year did spur investor sentiment enough to keep broader markets intact, finishing what turned out to be another strong year for equities.

Sector Performance

Only five of the eleven sectors on the S&P 500 were positive in the last month of the year. Sectors which had strong earnings, and lower valuations like financials, materials, and industrial, were all strong performers in the month, while sectors with heavy exposures to artificial intelligence sectors like information technology, utilities, and communication services were hurt. Despite the difficult final month of the year, all eleven sectors finished positive in 2026 highlighting strength from multiple areas of the S&P 500 and broad based earnings growth. 

Bonds

Fixed income markets fell in December, after five consecutive months of gains. As long-term interest rates moved higher, bond prices declined due to their inverse relationship. Strong economic data gathered throughout the month suggested that the Federal Reserve may cut interest rates fewer times than previously anticipated, which made yields rise slightly. The yield on the 10-year Treasury rose 8.1 basis points in December, but remains down through the year. Falling interest rates since the start of the year have been a big reason that fixed income markets performed so well in 2025. 

Economic Update

With the government shutdown in the rearview mirror, investors were focused on the release of delayed government data to get a picture into the health of the economy. Gross Domestic Product, or GDP, for the third quarter came in at 4.3%, outpacing expectations and suggesting strong growth. The Consumer Price Index (CPI) for the month of November showed that prices rose slower than anticipated, up 2.7% from this time last year. The economy added 64,000 jobs in November, a pace below the recent growth trend that may point to slower hiring rather than an outright decline in employment. When put together, the U.S. economy appears to be on solid footing headed into the New Year as inflation is cooling, growth is accelerating and the labor market continues to hold on.

A 2025 Lookback: Species Beating Extinction Across The Globe

Dozens of species have proved that extinction is not inevitable across the globe this past year. Though it seemed highly unlikely, the green turtle has officially been removed from the “endangered” list after a decades-long mission to save the species.

A kingfisher, an iridescent bird that went extinct in the wild due to the invasive brown tree snack, that is native to Guam has laid eggs outdoors for the first time in almost four decades as part of a breeding program. Over in Sweden, the brown trout has returned helping to clean-up rivers. The crane has also staged an extraordinary revival in Scotland, after being hunted to extinction. 

In other developments, the sailback houndshark was recorded again off Papua New Guinea, jaguar numbers have dramatically increased in Mexico, and the chinook salmon were spotted swimming in the Chiloquin Basin in Oregon, US, for the first time in 100 years.

As we move into 2026, we are excited to see what is next for the world of animal conservation. To learn more about this inspiring news, view the full article here.

THOUGHT FOR THE MONTH

^{Index Definitions}

^{Dow Jones Industrial Average:The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.}

^{Dow Jones U.S. Real Estate Total Return Index:The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.}

^{NASDAQ Composite:The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector.} 

^{S&P 500 Bond Index:The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.}

^{S&P 500 Consumer Discretionary:The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.}

^{S&P 500 Consumer Staples:The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.}

^{S&P 500 Energy:The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.}

^{S&P 500 Financials:The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.}

^{S&P 500 Index:The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.}

^{S&P 500 Utilities:The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.}

^{S&P U.S. Aggregate Bond Index:The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.}

^{S&P U.S. Treasury Bond Index:The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.}

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