The U.S. government partially shut down on Saturday morning after Congress failed to approve a spending package and send it to President Donald Trump by the Jan. 30 deadline.
Stocks reacted to a mix of tech earnings and Federal Reserve (Fed) developments last week. The Fed left rates unchanged, and President Trump announced plans to nominate Kevin Warsh as the next Fed chairman.
The S&P 500 fell for a third-straight day to end the week. but squeaked out a 0.36% advance. The Dow Jones Industrial average (Dow) dropped 0.39% while the Russell 2000 fell almost 2% last week.
Markets recalibrated policy rate expectations given Warsh’s history of leaning more hawkish than other candidates, as well as Friday’s higher than expected December Producer Price Index (PPI) inflation print.
Another key update was January‘s consumer confidence, which came in below even the pandemic-era low and represented the weakest print since 2014, pointing to elevated labor market concerns as well as worries about high prices, tariffs, and geopolitical conflict.
The 10-year Treasury closed yielding just under 4 ¼%.
Silver prices plunged on Friday, with spot silver tumbling about 30% to $80.55 an ounce at its session low. Spot gold shed around 11% to trade at $4,812.71 an ounce.
Apple (AAPL) swung between gains and losses despite beating fiscal first-quarter expectations and reporting a significant surge in iPhone sales.
That followed Microsoft’s (MSFT) 10% post-earnings drop last Thursday, marking its worst day since 2020 and wiping out more than $350 billion in market cap.
Meta (META) reported fourth-quarter earnings last Wednesday that topped estimates and issued stronger-than-expected sales guidance. The stock popped almost 10%.
KLA Corp (KLAC) lost more than 15% on Friday after its forecast suggested a deceleration in growth.
Chevron (CVX) — The oil giant posted fourth-quarter earnings that topped analyst expectations thanks to record oil production. The company earned an adjusted $1.52 per share, beating an LSEG consensus of $1.45 per share. Shares rose more than 1%.
Sandisk (SNDK) — The data storage device manufacturer shared solid guidance, leading the stock to pop 10%. Sandisk sees fiscal third-quarter adjusted earnings ranging from $12 to $14 per share, versus the FactSet consensus for $5.11 per share. Second-quarter results also beat Wall Street estimates on the top and bottom lines.
The S&P 500 and Dow logged gains of 1.4% and 1.7%, respectively, for January, while the Nasdaq notched a 1% gain. The small cap-focused Russell 2000 jumped more than 5% in the month.
Looking ahead to this week, the focus will be on labor market data, including the jobs report for January as well as the ADP employment report, Job Openings and Labor Turnover Survey (JOLTS) data, and Challenger job cuts. Other key updates will include manufacturing and services Purchasing Managers’ Indexes (PMIs) from S&P Global and consumer sentiment from the University of Michigan.
A busy week of corporate confessions will be heard from Palantir (PLTR), NXP Semiconductor (NXPI), Teradyne (TER), Eaton, Corp. (ETN), Amgen (AMGN), Chipotle Mexican Grill (CMG), Jacob Solutions (J), Advanced Micro Devices (AMD), Super Micro Computer (SMCI), Amtech (AME), Chubb Limited (CB), Eli Lilly and Company (LLY), Alphabet Inc.(GOOGL) Qualcomm (QCOM), Uber Technologies (UBER), GE Healthcare (GEHC), Fortinet Inc (FTNT), Amazon.com (AMZN), MarketAxess Holdings Inc. (MKTX), Biogen (BIIB), and Philip Morris International (PM).
Hit the Looking Ahead link below, and you will find research written by Wells Fargo Investment Institute. Below are excerpts from that report.
Week in review: January 26-30
Economic data
- As widely expected, the Federal Open Market Committee (FOMC) left the federal funds target rate unchanged at 3.5% to 3.75% after delivering three 25-basis point cuts in 2025 (100 basis points equals 1%).
- Stated reasons include a solid pace of economic growth, low job gains, stabilization in the unemployment rate, and somewhat elevated inflation.
- Two Fed governors dissented in favor of lowering the federal funds rate by 25-basis points.
- On Friday, President Donald Trump nominated Kevin Warsh as Jerome Powell’s successor when Powell’s term as the Fed Chairman expires in May, pending Senate confirmation.
- Given Trump’s focus on lowering rates coupled with Warsh’s historical reputation as leaning more hawkish than other candidates, markets will be highly attentive to Warsh’s comments in the coming months.
- Stocks declined following the announcement, in part due to expectations for a more dovish nominee. Despite Warsh’s historically hawkish stance, expectations for rate cuts in 2026 based on the future’s market increased slightly as inflation remains sticky.
- January consumer confidence from the Conference Board plummeted 9.7 points month-over-month to a reading of 84.5, its lowest level since 2014. Perceptions of present and expected conditions both declined significantly, and reports that jobs are “hard to get” increased to a post-pandemic high.
- The top contributor to the decline was negative sentiment around the labor market. Other concerns included high prices and tariffs as well as geopolitical conflict.
- PPI inflation for December surprised to the upside, gaining 0.5% month-over-month and 3.0% year-over-year, driven by an increase in service sector inflation. Investors will be looking to upcoming inflation reports given the potential for the PPI increase to translate to an uptick in other inflation measures.
- The Federal Housing Finance Agency House Price Index for November gained 0.6% month-over-month and 1.9% year-over-year, pointing to ongoing price pressures in the housing market, amid low inventory and still-elevated rates.
Looking Ahead to this week: February 2-6
U.S.
- The highlight in the coming, data-packed week, will be January’s PMI for manufacturing and services from the Institute for Supply Management today and Wednesday, respectively.
- Attention will then shift to Friday’s January jobs report, and the preliminary February consumer sentiment and inflation expectation survey from the University of Michigan.
- Other labor market data for the week includes the December JOLTS data, January’s ADP survey of private employment, and the January Challenger job cuts report, along with the final benchmark payrolls revision. Also on tap: January‘s vehicle sales and December’s consumer credit.
Asia
- In China, the highlight of an otherwise data-light week will be private January PMIs for both the manufacturing and service sectors, along with the month’s foreign reserves data.
- Japan’s lower house election will be in focus, as well as finalized January PMIs, the leading index, monetary base, and household spending data.
- The Reserve Bank of Australia will hold a policy meeting, while Australian economic releases include the trade balance, building approvals, a measure of inflation, and the finalized January manufacturing PMI.
- Elsewhere in the region, South Korea’s January Consumer Price Index (CPI) and manufacturing PMI hit the tape.
Europe
- The highlight will be Thursday’s European Central Bank policy meeting. Economic updates will include regional preliminary January CPIs and finalized PMIs along with the eurozone’s December retail sales and PPI.
- The Bank of England will also hold a policy meeting on Thursday, with data releases from the country including house prices, the official reserves changes, and new car registrations.
- From Germany and France, watch for industrial production, trade balances, and the latter’s fourth-quarter wages.
