The final week of January is shaping up to be a defining moment for global markets, as investors digest a packed slate of corporate earnings alongside a closely watched Federal Reserve policy decision. Results from major companies such as Apple, Meta, Microsoft, and Tesla are expected to offer critical insight into the trajectory of AI demand, data center investment, and corporate spending plans as the market looks ahead in 2026.
So far, about 13% of S&P 500 companies have reported fourth-quarter results, with analysts projecting a 2.2% increase in earnings per share. If that forecast holds, it would mark the 10th consecutive quarter of earnings growth, reinforcing the view that corporate America remains resilient despite lingering geopolitical and macroeconomic uncertainty.
To unpack what this means for investors, Brian Jacobsen, chief economic strategist at Annex Wealth Management, weighed in on the themes that matter most this week. Jacobsen stressed that the market’s attention is squarely on the largest companies, not just for headline numbers, but for what management teams reveal about future demand and spending behavior.
He noted that optimism among executives can be a powerful signal for the broader economy. As companies express confidence in forward-looking guidance, that often translates into higher spending on property, plant, and equipment, as well as increased hiring. Those signals are especially important as investors try to gauge whether momentum in the labor market can carry into 2026.
Market leadership is also shifting. Energy, materials, and industrials are currently leading gains within the S&P 500, a trend Jacobsen believes could persist. Portfolio positioning, he explained, is increasingly tilting toward these cyclical sectors, reflecting a growing focus on Main Street activity rather than the mega-cap, tech-driven growth that dominated the previous year.
The Federal Reserve meeting later this week adds another layer of significance. While no rate change is expected, investors will be parsing every word from Jerome Powell for clues about policy direction. Jacobsen expects the Fed to reaffirm its commitment to the 2% inflation target, with any nuance in messaging likely to influence market expectations for the rest of the year.
Meanwhile, broader market signals remain mixed. Gold has surged past the $5,000 level, driven largely by central bank buying, while the 10-year Treasury yield continues to hold above 4.2%. Jacobsen cautioned against assuming gold’s recent momentum will continue unchecked, emphasizing the importance of diversification and careful allocation, particularly when weighing corporate bonds against Treasuries.
As January draws to a close, the convergence of earnings results, Federal Reserve guidance, and sector rotation is setting the tone for the months ahead. While mega-cap earnings will dominate headlines, Jacobsen underscored that shifts in consumer confidence, business investment, and hiring intentions will ultimately play a decisive role in shaping economic growth in 2026. Investors who stay focused on those underlying trends will be better positioned to navigate what comes next.