Market Recap - Monday, January 12, 2026
S&P 500 Notches Another Record as Markets Shake Off Political Noise
Stocks inched higher to start the week, with the S&P 500 (+0.16%) closing at a new all-time high. The Nasdaq (+0.26%) and Dow (+0.17%) also posted gains, while small caps outperformed with the Russell 2000 up +0.44%. Tech stocks led the way, helped by strength in Tesla and Alphabet. Retail favorites, semiconductors, and some consumer staples names also did well, while banks, credit cards, airlines, and energy stocks were mostly lower. Treasuries weakened a bit, gold and silver surged, and the dollar pulled back. Bitcoin rose 1.7%, while oil edged slightly lower.
Markets brushed off a politically charged morning following reports of a Justice Department probe into Fed Chair Jerome Powell. Powell quickly pushed back, calling it an attempt to pressure the Fed on interest rates. The White House also floated a plan to cap credit card interest rates at 10%, which sent financials like Capital One and Synchrony tumbling. On the M&A front, Allegiant Travel announced a $1.5B deal to acquire Sun Country Airlines, while Walmart gained on news it would join the Nasdaq 100. Meanwhile, Meta, Citigroup, and others are reportedly preparing job cuts, and attention is turning to Tuesday’s inflation report (CPI) and the start of Q4 earnings season with big bank results later this week.
Here’s Our Take:
Despite political headlines and continued tensions abroad, markets are showing resilience. The S&P 500’s record close is a sign that investors remain confident heading into the new year, even as uncertainty looms around Fed policy and inflation. Tech and consumer names are helping to offset weakness in banks and energy, and there’s growing interest in pro-cyclical and small-cap names as the rally broadens.
This week’s CPI report and bank earnings will be key. If inflation stays under control and banks post solid results, the market could build on its recent gains. That said, the Fed’s independence controversy and geopolitical risks (Iran, Russia, Venezuela) are wildcards worth monitoring. We’re staying diversified, keeping an eye on margin pressures in financials, and watching for signs that leadership may be shifting more decisively beyond big tech.
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