Sweeney Financial OBSERVER- January 2026

Glenn Sweeney |

 

January 2026 Market Recap

Issued: February 5, 2026



January at a Glance

The investment markets started 2026 on a positive footing. Investors were encouraged by steady economic growth, easing inflation pressures, and a more predictable outlook from the Federal Reserve.

All major stock indexes finished the month higher, with gains spread across large and small companies.

 

Market Performance

Here’s how the major market indexes performed in January:

  • Dow Jones Industrial Average: Finished at 48,892, up 790 points (+1.7%)

  • S&P 500: Gained 1.4%

  • Nasdaq Composite: Rose 1.0%, led by technology and artificial intelligence-related stocks

  • Russell 2000 (small-company stocks): Advanced 5.3%, reflecting improving confidence in smaller businesses

Overall, markets showed broad strength as investors entered the new year with cautious optimism.

 

Federal Reserve & Interest Rates

The Federal Reserve left interest rates unchanged in January. Officials emphasized that future decisions will continue to depend on incoming economic data, while expressing growing confidence that inflation is slowly trending lower.

Bond markets were relatively calm, with the 10-year U.S. Treasury yield trading in a narrower range. Expectations for interest rate cuts later in 2026 remain in place, though investors now anticipate a gradual and measured approach, rather than rapid reductions.

This shift toward predictability has helped reduce policy-driven market volatility.

 

The Economic Picture

Recent economic data continues to point toward a resilient, moderating economy:

  • The job market is cooling slightly, but remains strong

  • Consumer spending is steady, supported by rising wages

  • Manufacturing activity is stabilizing after weakness in 2025

  • Tax cuts are expected to increase consumer spending through larger refunds this year

While growth is slowing from previous highs, the economy continues to expand rather than contract.

 

Notable Business & Market Developments

A few interesting developments from the month:

  • Mercedes-Benz reported a 9% decline in global car sales last year, driven by lower shipments to the U.S. and China. Tariffs on imported vehicles remain a challenge for the company.

  • Walmart announced plans to significantly expand its drone delivery program in 2026. The service will initially roll out in southern U.S. states.

  • Apple’s new iPhone 17 has seen strong demand. December iPhone sales increased 23%, with particularly strong sales in China.

 

Looking Ahead

Market volatility is likely to continue, but current conditions suggest moderation rather than recession. Economic growth is expected to slow gradually, and monetary policy is likely to remain cautious and incremental.

2026 is shaping up to be a year focused on normalization, discipline, and long-term compounding, not speculation.

Thank you for reading this issue of the Sweeney Financial OBSERVER. If you have any questions or would like to discuss how these trends may affect your personal situation, please reply to this email. And if you know someone who might find this update helpful, feel free to share it.

 

Until next month,

Glenn Sweeney, CFA

Founding Partner & Wealth Advisor

Sweeney Financial Management, LLC