Solid start: S&P +2.1%, AI capex optimism, Fed holds
Monthly Performance
| Asset | Close | Change |
|---|---|---|
| S&P 500 (SPY) | 591.80 | +2.10% |
| Nasdaq 100 (QQQ) | 524.30 | +2.80% |
| Russell 2000 (IWM) | 223.50 | -0.55% |
| 20Y+ Treasury (TLT) | 93.25 | -0.25% |
| DXY | 100.25 | +0.80% |
| Gold | 3232.00 | +0.15% |
| VIX | 17.50 | -2.10% |
| Bitcoin | 79,850 | -2.35% |
Macro Dashboard
| Indicator | Month-end | vs. prior | vs. YoY |
|---|---|---|---|
| Recession probability (CVRP) | 29.00 | −4.00 | −1.00 |
| 10Y Treasury yield | 4.26% | +0.08pp | −0.32pp |
| 2s10s spread | 74bps | +3bps | +38bps |
| VIX | 17.44 | +2.49 | +1.01 |
| HY credit spread | 288bps | +7bps | +20bps |
| CPI (headline, YoY %) | 2.39% | — | — |
| Unemployment rate | 4.30% | −0.10pp | +0.30pp |
| WTI crude | $64.50 | +$7.24 | −$8.34 |
Values captured at month-end (last available daily observation). Sources: FRED (rates, credit, commodities, labor), BLS (CPI), Convex proprietary indices (CVRP).
What Happened
January 2026 delivered a steady but unremarkable start to the year. Q4 2025 earnings season dominated the first three weeks, with hyperscaler capex guidance for 2026 reaffirmed at $320B+ aggregate, driving strength in semiconductors, data center infrastructure, and power utilities. The S&P 500 gained 2.1% on the month, with the NASDAQ 100 leading at +2.8% on AI-sector leadership.
Rate markets were subdued. The January 28 FOMC held at 3.75-4.00% in a unanimous decision, with Powell striking a patient tone that emphasized the committee would "wait to see more data" through the spring. Fed funds futures priced 30% probability of a March cut and 55% for May. The 10Y Treasury yield closed at 4.22%, little changed. The dollar firmed modestly (DXY +0.8%) as relative growth prospects favored the US.
Cross-asset performance was quiet. Gold traded flat near $3,230. Bitcoin consolidated in a $78,000-$82,500 range after the December 2025 pullback from near-$95k highs. Oil fell 1.5% on mild winter and continued OPEC+ compliance discussion. Small caps underperformed (IWM -0.5%) as rate-cut expectations moderated. The month's character was consistent with late-cycle consolidation: risk assets drifting higher on earnings strength, rates hedging against both growth and inflation tail risks.
Key Dates
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Monthly recaps land in your inbox the first trading day of each month. Written by the research desk.