Weekly Market Watch

The Warsh Cycle Begins

Global financial markets pulled back on Friday, after President Trump announced Kevin Warsh as his nominee for the next Federal Reserve (Fed) Chair. Despite the late-week pullback, financial markets were positive for the week, led by international markets and U.S. large-capitalization equities. The Russell 2000^® cooled and had its largest weekly decline since October as the Federal Open Market Committee (FOMC) held its policy rate steady on January 28. The surprising decline in The Conference Board’s Consumer Confidence Index^®, which dropped to a 12-year low in January, also had a negative impact on the equity market. Meanwhile, precious metals gave back their recent rally, with the price of silver falling 26% on Friday — its worst decline on record, dating back to 1950. In contrast, energy commodity prices increased last week on geopolitical concerns and exceptionally cold winter weather across the United States; Brent crude oil topped $70 per barrel for the first time since August 2025.

Market Outlook

This week has a full calendar of earnings and economic data releases. The market is focused on the path to payoffs from tech spending, which is likely to be an ongoing theme this year, and which could result in increased dispersion among companies. We expect Friday’s payroll report to shed further light on the path of economic growth, given that Fed Chair Jerome Powell stated labor conditions may be “stabilizing” at last week’s FOMC meeting.

Table of the Week

The S&P 500^® blended earnings growth rate improved by an impressive 370 basis points from the prior week.

Growth was influenced by strong results from companies across multiple sectors, including Mag 7 companies. A strong consumer and increased artificial intelligence-related capital expenditures were common themes, while Mag 7 results highlighted continued strength in cloud and advertising revenues.

With 130 companies slated to report this week, results should provide a clearer read on the broader earnings picture.

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