Source: https://www.ft.com/content/321eb05e-47a5-454c-8c46-fa22b4296957
The benchmark S&P 500 started the first week of January quietly reaching another record high. [3] [4] However as the month wore on, foreign policy action stole the spotlight. U.S. threats of additional tariffs against European countries opposed to a Greenland sale reignited concerns over trade tensions, causing stocks to slump and bond yields to spike (prices lower). [5] After those threats were dropped, markets staged a rally that2 brought it to all-time highs again. [6], [7]
Corporate Earnings Continue to Show Strength
Markets have been supported by a fourth-quarter earnings season that has generally offered an encouraging picture of corporate profitability. As of late January, approximately one-third of S&P 500 companies had reported actual results for Q4 2025, with 75% reporting actual earnings per share above estimates. [8] While this beat rate is slightly below the five-year average of 78%, companies are reporting earnings that are 9.1% above estimates in aggregate, which is above both the five-year and ten-year averages. [9]
The blended earnings growth rate for Q4 2025 stands at an impressive 11.9%, marking the fifth consecutive quarter of double-digit year-over-year earnings growth for the index. [10]
Source: https://www.bloomberg.com/news/articles/2026-01-28/stock-market-today-dow-s-p-live-updates
Consensus expectations place the Magnificent Seven at 19% earnings growth in 2026, while the remaining 493 stocks are projected to grow at 15%.[12]
As we’ve previously noted, stock market gains have been heavily concentrated in a handful of mega-cap technology stocks often called the “Magnificent Seven.” However, earnings strength appears to be broadening beyond the Mag 7, as this year’s earnings growth gap between these giants and the rest of the S&P 500 is expected to narrow to its smallest in years. [11] Consensus expectations place the Magnificent Seven at 19% earnings growth in 2026, while the remaining 493 stocks are projected to grow at 15%. [12]
Source: https://www.bloomberg.com/news/articles/2026-01-28/stock-market-today-dow-s-p-live-updates
This narrowing gap could provide a healthier foundation for the stock market. When more companies contribute to earnings growth, the rally becomes less dependent on the fortunes of just a few technology giants. As investors looked for opportunities beyond big tech, small capitalization stocks (below $1B in market capitalization) managed to outperform, with the Russell 2000 advancing over 5% for the month. [13]
Corporate profitability is a fundamental driver of stock prices over the long term. When companies generate strong earnings growth across multiple sectors, it can provide fundamental support for market valuations. The key question going forward will be whether companies can continue to deliver on these expectations, particularly as they navigate an environment of evolving policies and ongoing tech disruption.
Interest Rates On Hold
Source: https://www.wsj.com/economy/central-banking/fed-holds-rates-steady-for-first-time-since-july-e5622f03?mod=hp_lead_pos2
Looking Ahead
Earnings season will continue to take center stage in the coming weeks. Continued solid expectations for corporate earnings reflects confidence in economic expansion and earnings momentum, though it also leaves less room for error or disappointment. In Washington, Congress managed to pass spending legislation to fund the majority of the government –except for the U.S. Department of Homeland Security– through September, ending a brief partial government shutdown at the end of January. [19] The administration has nominated former Fed governor Kevin Warsh to lead the Federal Reserve, and if confirmed, he could succeed Jerome Powell after May. Other developments to look for include the Supreme Court’s ruling on the legality of the administration’s tariffs. February 20th is the next possible date for that determination. [20]
From our perspective, uncertainty remains a constant under a never-ending news cycle. Periods of market calm can give way to volatility with little warning. As long-term investors, we plan to stick to our core discipline: focusing on a targeted approach without getting caught up in short-term hype.
Now is a great time to revisit your financial plan and goals for the new year—please reach out with questions or to let us know about any changes in circumstances. As always, we aim to help you stay on track with your short and long-term objectives using deliberate, strategic planning.
From your friends at JSF
The information expressed herein are those of JSF Financial, LLC, it does not necessarily reflect the views of NewEdge Securities, LLC. Neither JSF Financial LLC nor NewEdge Securities, LLC gives tax or legal advice. All opinions are subject to change without notice. Neither the information provided, nor any opinion expressed constitutes a solicitation or recommendation for the purchase, sale or holding of any security. Investing involves risk, including possible loss of principal. Indexes are unmanaged and cannot be invested in directly.
Historical data shown represents past performance and does not guarantee comparable future results. The information and statistical data contained herein were obtained from sources believed to be reliable but in no way are guaranteed by JSF Financial, LLC or NewEdge Securities, LLC as to accuracy or completeness. The information provided is not intended to be a complete analysis of every material fact respecting any strategy. The examples presented do not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy. Diversification does not ensure a profit or guarantee against loss. Carefully consider the investment objectives, risks, charges and expenses of the trades referenced in this material before investing.
Asset Allocation and Diversification do not guarantee a profit or protect against a loss.
The Bloomberg Barclays U.S. Aggregate Bond Index measures the investment-grade U.S. dollar-denominated, fixed-rate taxable bond market and includes Treasury securities, government-related and corporate securities, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities.
The S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market.
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The CBOE Volatility Index (VIX) is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 Index (SPX). Because it is derived from the prices of SPX index options with near-term expiration dates, it generates a 30-day forward projection of volatility. Volatility, or how fast prices change, is often seen as a way to gauge market sentiment, and in particular the degree of fear among market participants.
The Nasdaq Composite is a market-capitalization-weighted index consisting of all Nasdaq Stock Exchange listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds or debenture securities.
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[1] https://www.cnbc.com/2026/01/29/stock-market-today-live-updates.html
[2] https://www.cnbc.com/2026/01/29/stock-market-today-live-updates.html
[3] https://finance.yahoo.com/news/live/stock-market-today-dow-sp-500-jump-to-records-nasdaq-surges-as-stocks-end-2026s-first-week-with-big-gains-210029649.html
[4] https://apnews.com/article/stocks-markets-oil-trump-ces-6d6f626287f9f0f8a7f8a6d98abce0f9
[5] https://www.wsj.com/livecoverage/stock-market-today-dow-sp-500-nasdaq-netflix-01-20-2026
[6] https://finance.yahoo.com/news/asian-shares-rise-tracking-wall-043709639.html
[7] https://www.cnbc.com/2026/01/27/stock-market-today-live-updates.html
[8] https://insight.factset.com/sp-500-earnings-season-update-january-30-2026
[9] https://insight.factset.com/sp-500-earnings-season-update-january-30-2026
[10] https://insight.factset.com/sp-500-earnings-season-update-january-30-2026
[11] https://www.blackrock.com/us/individual/literature/market-commentary/weekly-investment-commentary-en-us-20260112-us-earnings-broadening-strength.pdf
[12] https://www.blackrock.com/us/individual/literature/market-commentary/weekly-investment-commentary-en-us-20260112-us-earnings-broadening-strength.pdf
[13]https://www.cnbc.com/2026/01/29/stock-market-today-live-updates.html
[14] https://www.cbsnews.com/news/fed-meeting-fomc-interest-rate-decision-january-28/
[15] https://www.wsj.com/economy/central-banking/fed-holds-rates-steady-for-first-time-since-july-e5622f03
[16] https://finance.yahoo.com/news/long-fed-pause-interest-rates-230849591.html
[17] https://www.msn.com/en-us/money/markets/why-the-treasury-market-is-deathly-quiet-and-what-ends-the-lull/ar-AA1VwYH2?ocid=finance-verthp-feeds
[18] https://www.pimco.com/us/en/insights/fed-holds-steady-and-signals-longer-term-easing-bias
[19]https://www.nbcnews.com/politics/congress/house-path-end-government-shutdown-tuesday-dhs-trump-rcna257138
[20] https://edition.cnn.com/2026/01/28/politics/where-is-supreme-court-ruling-on-trump-tariffs
