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Markets Navigate Fed Meeting as Earnings Momentum Builds

Market Movers: The Opening Bell

January 27, 2026

Video Transcript

Let's get to the big story.

Breakdown while ahead of the market open.

We are looking at mixed trading for the major US stock averages and of course the two-day Fed meeting is kicking off with the rate announcement and Powell's presser is set for tomorrow afternoon.

Now markets have been favoring small cap rotation, and this week roughly 20% of companies are expected to report.

Meanwhile, the federal government faces the possibility of a party.

Shoal shut down this week as Republicans and Democrats clash over funding for Trump's Department of Homeland Security.

While ahead of the market open, joining me here at the New York Stock Exchange is Michael Ryan King, senior market strategist at the NYSE.

Michael, great to have you back.

Thank you so much for joining me.

Good Morning, Remy.

Thanks for having me.

Well, here in New York we are digging out from the winter storm, but we're also looking at both red and green for the major stocks.

Averages.

Can you break this down for us?

Yes, so I mean this morning we're seeing futures are broadly higher outside of the Dow, which is getting hit, you know, kind of given that the healthcare exposure in UnitedHealth, CBS, some of the things that you mentioned after what President Trump said yesterday.

You know, look, I mean we've had a couple of weeks where the S&P has kind of pulled back, but we've started to see kind of that rotation.

Begin to unwind a little bit, right?

So to start the year as we've talked about for the first couple of weeks, we've really seen kind of more cyclical sectors, small and mid-cap stocks really outperforming starting on Friday, we've started to see kind of the mega cap tech stocks reassert themselves.

We've seen software which has been a very big underperformer as we've seen some of the clawed kind of programming.

The LMMs from Claude doing some kind of software programming really weighing on that sector we've seen kind of a turn.

So the middle of last week we saw the NYSE F plus index had tagged its 200 day moving average for the first time in a few months, right?

So it's a little bit of a different setup that we've seen for the mega cap tech stocks heading into their earnings than we've seen in the past where they've kind of pulled back.

So maybe lowers the bar a little bit.

Yes, and as we head into the rest of this week, of course we're keeping our eyes on earnings, but of course the Fed and also the US government.

So first, in terms of tech earnings, what are you looking out for?

Yes, so I mean look, I think the numbers are going to continue to be strong, right?

It's really kind of how markets react to the continued spending by a lot of the hyper scales, right?

So I think that's kind of the big key.

We'll have to See what that guidance looks like if they continue to increase that guidance, but I think a lot of it is about how the market starts to respond in terms of the suppliers, those companies are going to have very, very strong numbers.

We've seen a continuation in the move higher in the memory names, which is kind of the new hot spot within kind of AI, and they've continued to move higher.

Were up last night helping South Korea close up almost 3% despite the fact that we had some tariff headlines coming from President Trump, you know, and then in terms of kind of the other sectors, right, we're seeing kind of more mixed results if you look kind of holistically at the start of this earnings season, the beat rates and kind of the average size of the beats are a little bit below what we've seen historically.

Over the last 5, not necessarily historically, but over the last 5 or 10 years, but we're still waiting for the mega cap tech stocks which can really start to positively skew that data.

Yes, and you mentioned South Korea and that was interesting in terms of their record high on their main ACOSPI index despite the tariff headlines.

So what do you make of what we're seeing when it comes to tariffs and trade agreements?

Yes, so I mean look, I think we kind of turned a corner last year where we've seen kind of the kind of high water mark in tariffs, kind of start to move down kind of on the back half of the year, and we've now seen kind of President Trump is reinstituting the use of tariffs kind of to push trade partners and And countries to kind of do things that the administration wants, right, but we've also kind of very quickly kind of kind of reverse course or kind of the taco trade as people have kind of you know kind of termed it over the last year or so, right?

So it's still part of the playbook, I think, you know, a big piece of what we're waiting on is what happens with the Supreme Court, right?

We're not expected to really get a ruling for.

You know, until kind of the end of February at this point, and it's a question of, you know, once the Supreme Court does rule, how does the administration react, how aggressive do they get, right?

Do we start to see them kind of slow roll of some of the reinstitution of those tariffs right as they're really starting to focus on affordability ahead of midterms, right?

We have President Trump speaking about affordability today in Iowa.

Yes, and of course we will be focusing on the nation's capital tomorrow as the Federal Reserve meeting concludes for January and we get not just the rate announcement, but Powell speaking.

So what are your expectations?

And also if we do get a partial government shutdown, what's the impact on the markets?

Yes, so look, we'll start with the Federal Reserve.

It's pretty widely known that we're not going to get a rate cut this court at this meeting.

It shouldn't necessarily be all that eventful outside of some of the topics that you kind of highlighted earlier.

What would be sort of interesting is if you kind of in conjunction with the Federal Reserve kind of releasing of their statement is if we actually have of President Trump also naming the next Fed chair.

So we've very much seen kind of the odds within kind of prediction markets shift very significantly over the last week where we've had BlackRock's Rick Rieder kind of move into pole position, kind of surpassing Kevin Warsh, who just a week ago surpassed kind of Kevin Hassett, who was kind of told that by the president that he wanted him to stay in his current role.

So I think that is kind of where the biggest potential catalyst from a market perspective in terms of the Federal Reserve at this point because I just don't think we're going to hear much in terms of rate cuts and markets have really pushed out the expectations for rate cuts to kind of the middle of the year at this point, right?

So we started the year somewhere in early Q1 and now we're looking mid mid Q1.

In the middle of the year and then in terms of the government shutdown, we just came out of one markets had survived through that.

It seems like the tone has kind of calmed down a little bit.

So hopefully we can kind of work within Minnesota, so hopefully we can kind of work through that with kind of Democrats and if we do have a partial shutdown, it's kind of short term in nature, hopefully it doesn't impact the economic data again from a market perspective because we're just getting to the point where we're starting to, we're hoping to see that data look a little more normalized.

Yes, and finally, Michael, before I let you go, there are Other asset classes that you're also paying attention to, for example, gold, especially since we saw that surge that rally above 5000, but we're also looking at the currency pairs in particularly the yen.

So what's going on with gold and the yen.

So very interesting and actually so yesterday was the first time where the SLV had the biggest trading volume on the day, traded nearly $40 billion.

That's the first time.

Since we've been tracking the data since about 2012, where an ETF other than Sy, which is the S&P 500, actually had the heaviest kind of trading bonds, so that was sort of interesting.

Some folks are kind of hoping that might be kind of a blow off top as we've seen just such a massive move here.

What we've seen is the yen has been kind of weakening for some time now along with longer dated Treasury yields or JGB yields.

In Japan moving sharply higher, right, so the Prime Minister had called for a snap election in early February.

There's this expectation that that could lead to kind of a reduction in consumption tax and increased fiscal spending, which is kind of weakening the yen.

Now late last week there were some reports that the Treasury that the Federal Reserve was kind of doing a rate check with some banks which suggests that they were looking.

Get involved in the market kind of along with Japan and so that intervention, that expectation that we could see some intervention has caused a very, very sharp rally kind of in the yen over the last couple of days, and the US dollar index is now sitting just above the highs that we've seen last year, I mean the lows that we've seen since last year, so we could start to see kind of a little bit of a break here.

A technical break in the dollar that did kind of hit exporters in Japan a little bit earlier this week.

Markets stabilized overnight.

It's kind of the weakness in the US dollar could be somewhat of a positive for kind of multinational, US multinationals as we kind of see the dollar weaken.

Well, Michael, that's a lot of ground to cover.

So thank you so much for joining me as always and thank you so much for sharing your insights and your perspective.

Thanks for having me.

Thank you.

The financial landscape is moving through a period of heightened uncertainty as markets brace for a pivotal Federal Reserve meeting and a wave of corporate earnings. Trading has opened with mixed signals across major stock averages, reflecting investor caution ahead of the Fed’s two-day policy gathering, where guidance on interest rates and the broader economic outlook will take center stage.

Speaking with FINTECH.TV’s Remy Blaire, NYSE senior market strategist Michael Reinking outlined the key forces shaping current market behavior. With tech earnings accelerating and government shutdown negotiations lingering in the background, investors are navigating a market influenced by both corporate fundamentals and political risk.

Early trading patterns reveal a notable divergence. The Dow has faced pressure, while broader futures excluding the index have shown modest strength. Healthcare stocks have underperformed, partly in response to recent comments from President Donald Trump. Reinking pointed to a recent rotation that has caught investors’ attention, as small- and mid-cap stocks have ceded momentum back to mega-cap technology names. This shift suggests renewed confidence in large-cap tech as earnings season ramps up, particularly with several high-profile reports approaching.

Expectations for tech earnings remain elevated, driven by continued spending among hyperscale companies. However, Reinking emphasized that guidance will matter more than headline beats. While earnings beat rates have come in slightly below long-term averages so far, strong performance from major technology firms could help stabilize sentiment and reinforce the market’s recent rebound.

Trade policy has re-emerged as another source of volatility. Reinking noted that tariff rhetoric has evolved over the past year, moving from aggressive posturing to a more measured tone. Still, the President’s recent reinstatement of tariff threats has reintroduced uncertainty, particularly as markets await clarity on related legal and policy developments. Combined with the backdrop of upcoming midterm elections, trade policy remains a variable investors are watching closely.

As attention turns to the Federal Reserve, expectations remain centered on policy stability. No immediate rate cuts are anticipated, but Reinking highlighted that commentary from Fed Chair Jerome Powell will be closely scrutinized. In addition, speculation around future leadership at the Fed has gained traction in prediction markets, adding another layer of intrigue to this week’s meeting.

From a macro perspective, economic data suggests underlying resilience, though a potential partial government shutdown could introduce short-term disruptions. Reinking noted that markets have historically absorbed similar events without lasting damage, suggesting any impact may be limited if such a scenario unfolds.

Beyond equities, movements in alternative assets are also drawing attention. Trading volume in silver ETFs has surged, signaling increased interest in precious metals amid market volatility. Meanwhile, the Japanese yen remains sensitive to global rate expectations and geopolitical developments, particularly shifts in Treasury yields and potential intervention from Japanese authorities. Currency fluctuations could have downstream effects on multinational earnings, further underscoring the interconnected nature of global markets.

Overall, the current environment reflects a complex intersection of earnings momentum, monetary policy, and geopolitical risk. As markets move through this critical stretch, insights from strategists like Michael Reinking offer valuable context for investors seeking to remain agile. With multiple catalysts converging, disciplined positioning and close attention to guidance will be essential as markets look toward the weeks ahead.

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