Weekly Market & Economy Brief — Week Ending January 23, 2026

U.S. Equities (Friday close, weekly change)

S&P 500: 6,915.61 (-0.4% week)

Dow Jones Industrial Average: 49,098.71 (-0.5% week)

Nasdaq Composite: 23,501.24 (-0.1% week)

Russell 2000: 2,669.16 (-0.3% week)

Rates (U.S. Treasury, 3:30 pm ET close, Friday)

2 Year: 3.60% (about -1 bp vs prior close)

10 Year: 4.24% (about -2 bps vs prior close)

(Weekly: yields were choppy, ending near +1 bp (2Y) and flat to slightly lower (10Y) versus last Friday. No curve analysis.)

Volatility (Friday close)

VIX: 16.09 (week ended higher vs last Friday’s mid-15s, after a midweek spike near 20)

Commodities (Friday close/settle)

WTI crude: $61.28/bbl (up about +$1.9 from last Friday’s high-$59 area)

Gold (front month futures): $4,976/oz (+8.5% week)

FX (Friday close)

U.S. Dollar Index (DXY): 97.60 (down about -1.5% week)

Flows (week ending Jan 21)

U.S. equity funds: -$5.26B net outflows

U.S. bond funds: +$5.9B net inflows

Money market funds: -$34.93B net outflows

(Flow data: Lipper/Refinitiv)

(1) Executive Summary

Risk assets finished the week with modest declines and elevated headline sensitivity, while cross-asset signals leaned defensive: gold surged (+8.5% to $4,976/oz) and the U.S. dollar weakened (~-1.5% to DXY 97.60). Equities were not disorderly, but the tape repeatedly repriced around policy and geopolitical headlines, reflected in volatility that spiked midweek (VIX near 20) before settling at 16.09.

Rates ended near 3.60% (2Y) and 4.24% (10Y), with day-to-day moves more important than the week’s small net change. Fund flows echoed the caution: -$5.26B out of U.S. equity funds and +$5.9B into U.S. bond funds, with a large -$34.93B move out of money funds. The market’s message was not “risk off across the board.” It was “risk management matters,” and pricing of uncertainty increased even as index losses remained limited.

(2) Markets & Rates This Week (no curve analysis)

Equities: The S&P 500 ended at 6,915.61 (-0.4%), with the Dow at 49,098.71 (-0.5%) and the Nasdaq at 23,501.24 (-0.1%). The Russell 2000 closed at 2,669.16 (-0.3%), showing that smaller caps did not break, but they also did not lead.

Two takeaways mattered. First, the week delivered directionless churn rather than trend continuation: gains were difficult to hold when headline risk flared. Second, the dispersion under the surface was meaningful, even though the indexes finished near flat. That combination is consistent with markets that are still liquid but increasingly reactive to narrative shocks.

Rates: Treasury yields ended Friday at 3.60% (2Y) and 4.24% (10Y). The week’s story was the intraweek volatility, not the net change: yields repriced quickly around shifting expectations for policy tone, risk premia, and global positioning. The key for markets was that rate moves did not force a broad deleveraging event in equities, suggesting positioning remained manageable.

Volatility: VIX at 16.09 is not panic, but it is a step up from the mid-teens comfort zone that tends to support steady systematic buying. The midweek push near 20 matters because it shows how quickly hedging demand can return when the catalyst is political or geopolitical rather than purely economic.

(3) Policy & Liquidity Signals

This was a “policy narrative” week, in the sense that markets responded to policy uncertainty more than to new macro data. Liquidity indicators were mixed but not alarming. The cleanest read came from flows: equity outflows (-$5.26B) paired with bond inflows (+$5.9B) suggest a marginal rotation toward safety. The large money market outflow (-$34.93B) is harder to interpret in isolation because it can reflect rebalancing, tax timing, and institutional cash management, but it is directionally consistent with repositioning rather than fresh risk-taking.

In practical terms, policy uncertainty tends to show up first in FX and vol, and that’s what happened: the dollar weakened (DXY 97.60) and volatility rose (VIX 16.09). When those two move together, markets usually become more selective about what they reward.

(4) Corporate, Credit & Real-Economy Signals

Corporate risk signals were less about a single data point and more about “how much uncertainty can earnings absorb.” The early-cycle setup into earnings season is straightforward: with index levels near highs (S&P 6,915), the market tends to be less forgiving of guidance ambiguity.

Credit stress did not surface as a dominant headline, but the flow pattern implies incremental caution. In weeks like this, the actionable question is not whether credit is “bad.” It’s whether financing conditions tighten at the margin for smaller issuers and cyclical sectors. That is typically where volatility transmits first when confidence slips.

Energy added a second layer. WTI ended at $61.28/bbl, up roughly $2 week over week, while a major winter storm narrative introduced supply and logistics sensitivity. Even if demand is stable, energy volatility can tighten financial conditions for rate-sensitive consumers and certain industrial inputs. Markets did not price an energy shock, but they did price an energy premium.

(5) The Week’s Defining Theme

Uncertainty was re-priced, not risk fully liquidated.

The cleanest evidence is the divergence between modest equity losses and outsized hedging behavior: S&P -0.4% alongside gold +8.5% and a weaker dollar (DXY -~1.5%). Volatility rose but did not spiral (VIX 16.09), and flows shifted defensive without becoming extreme (equity -$5.26B; bonds +$5.9B). That combination is typical of markets that still believe in the broader framework but are paying up for protection against headline-driven discontinuities.

(6) What to Watch Next Week (calendar and scenario framing only)

Calendar focus:

Earnings intensity increases. Central bank communications and policy expectations remain a sensitivity point. Treasury auctions and funding conditions can matter if volatility rises.

Scenario framing:

What would reinforce the current narrative (orderly but cautious):

Earnings that clear guidance bars without introducing new downside language.

Volatility stabilizing back toward mid-15s (VIX holding near 16 or lower).

The dollar stabilizing after this week’s drop (DXY holding near 97–98).

What would challenge it (risk premia expand):

A renewed spike in volatility (VIX pushing back toward 20) paired with weaker breadth.

Further sharp dollar weakness (DXY breaking materially below 97.6), signaling global risk rebalancing.

Another leg higher in energy that tightens sentiment (WTI moving well above $61 quickly).

What markets will be sensitive to at the open:

Large single-name earnings reactions that spill into sector positioning.

Headline-driven FX moves that change global risk appetite.

Rapid rate volatility even if yield levels don’t move far.

(7) Call to Action

For the structural macro framework behind weekly market behavior, review the current Monthly U.S. Economic Report (link placeholder). It provides the slower-moving context that weekly narratives often miss.

Be sure to subscribe on our site to get this brief delivered to your inbox every week.

Read the Monthly Report here

(8) Brief Disclaimer

Disclaimer: This publication is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. Nothing contained herein should be construed as a recommendation to buy, sell, or hold any security or to engage in any particular investment strategy. Views expressed reflect general market analysis as of the date of publication and are subject to change without notice. Readers should conduct their own research or consult a qualified professional before making any financial decisions.