To begin the new year, uncertainty was elevated amid renewed tariff threats and geopolitical tensions in South America, the Middle East, and Greenland. Concerns surrounding Federal Reserve (Fed) independence, including subpoenas issued to current Fed officials and a new Fed Chair nomination from the White House, added to the eventful start to the year. Despite these concerns, stocks climbed higher for the month, supported by strong corporate earnings and a modest inflation reading for December. Market leadership continued to broaden, with small-cap and value stocks outperforming and overall market breadth improving.
International stocks surged in January, rewarding globally diversified portfolios. Emerging markets outpaced developed markets, supported by improving global growth expectations and a trade agreement between India and the European Union. Easing inflation and increased spending across Europe, along with a weakening dollar, contributed to strong international stock performance.
Bonds were relatively flat over the course of the month. The 10-year Treasury yield edged higher as the Fed reinforced a “higher for longer” policy stance while holding rates steady at its January meeting, citing that inflation remains somewhat elevated.
Looking ahead, additional earnings reports, along with upcoming data on inflation and unemployment, will be key inputs shaping market expectations in the months ahead. Markets will remain focused on the Federal Reserve’s policy path, particularly as officials balance inflation progress against labor market concerns.
Source: Morningstar, Inc.
Disclosure: There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained in this market commentary serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Investment Advisers, LLC. This information was gathered from reliable sources, but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated. Raffa actively leverages Artificial Intelligence and Large Language Models within our operations. The use of such technologies, focusing on the safeguard of non-public personal information, protecting of trade secrets, verification of information accuracy, and other pertinent compliance considerations, is outlined in Raffa’s Compliance Manual and acknowledged by Raffa staff. All viewpoints and final content created was reviewed and approved by the Raffa team to verify accuracy, perspective, and compliance with our marketing guidelines.
January 2026 Market Commentary & Outlook
Market Commentary
To begin the new year, uncertainty was elevated amid renewed tariff threats and geopolitical tensions in South America, the Middle East, and Greenland. Concerns surrounding Federal Reserve (Fed) independence, including subpoenas issued to current Fed officials and a new Fed Chair nomination from the White House, added to the eventful start to the year. Despite these concerns, stocks climbed higher for the month, supported by strong corporate earnings and a modest inflation reading for December. Market leadership continued to broaden, with small-cap and value stocks outperforming and overall market breadth improving.
International stocks surged in January, rewarding globally diversified portfolios. Emerging markets outpaced developed markets, supported by improving global growth expectations and a trade agreement between India and the European Union. Easing inflation and increased spending across Europe, along with a weakening dollar, contributed to strong international stock performance.
Bonds were relatively flat over the course of the month. The 10-year Treasury yield edged higher as the Fed reinforced a “higher for longer” policy stance while holding rates steady at its January meeting, citing that inflation remains somewhat elevated.
Looking ahead, additional earnings reports, along with upcoming data on inflation and unemployment, will be key inputs shaping market expectations in the months ahead. Markets will remain focused on the Federal Reserve’s policy path, particularly as officials balance inflation progress against labor market concerns.
Source: Morningstar, Inc.
Disclosure: There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained in this market commentary serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Investment Advisers, LLC. This information was gathered from reliable sources, but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated. Raffa actively leverages Artificial Intelligence and Large Language Models within our operations. The use of such technologies, focusing on the safeguard of non-public personal information, protecting of trade secrets, verification of information accuracy, and other pertinent compliance considerations, is outlined in Raffa’s Compliance Manual and acknowledged by Raffa staff. All viewpoints and final content created was reviewed and approved by the Raffa team to verify accuracy, perspective, and compliance with our marketing guidelines.