QuickTake: Market Insights: January 29, 2026

Markets move in a matter of minutes lately. We remind you that we will always stand by diversification and remaining invested. To help keep you informed, here are some key market insights as of January 29, 2026.

Broad-Based Gains, but Leadership Is Shifting

  • All major asset classes posted positive returns over both 1‑ and 3‑year periods as of the end of 2025—an unusually strong and synchronized environment for investors.
  • Over the last year, leadership shifted: Developed and emerging international equities nearly doubled U.S. large‑cap returns, signaling a meaningful rotation. Diversification matters.

Dollar Weakness Is Fueling International Outperformance

  • The U.S. dollar is down ~10% over the past year, supporting returns for non‑U.S. assets. Drivers include; rising U.S. debt levels; trade and tariff uncertainty; and currency “debasement” concerns
  • This has benefited developed and emerging markets relative to U.S. equities.
  • Investor takeaway: Currency trends are becoming a tailwind for international allocations after years of underperformance.

Fixed Income Rewards Risk—So Far

  • In fixed income, lower‑quality and higher‑credit exposure outperformed higher‑quality bonds.

Equity Returns Are Extremely Concentrated

  • The “Magnificent 7” drove the bulk of S&P 500 returns with less than one‑third of S&P 500 Index stocks beating the index last year.
  • The S&P 500 has effectively behaved like a tech‑heavy, growth‑focused portfolio.
  • Investor takeaway: Index ownership ≠ true diversification in today’s market and while markets remain resilient, bouts of volatility are still a likely part of the landscape.

Fed Outlook: Cuts Likely, but Cautious

  • No rate move at the January 28, 2026 meeting but futures markets still expect two additional cuts by year‑end.
  • Investor takeaway: The Fed may ease further, but it’s unlikely to aggressively push long‑term rates lower.

Early 2026: Rotation Is Emerging

  • Small‑cap and value stocks are leading early in 2026. This represents a notable departure from recent years of large‑cap growth dominance.
  • Investor takeaway: This could be the start of broader market leadership—or just a short‑term rotation worth monitoring.

Bottom Line for Investors

  • Markets have delivered exceptional headline returns, but risk is increasingly concentrated.
  • Dollar weakness, valuation gaps, and yield curve dynamics are reshaping leadership.
  • 2026 is starting with a changing playbook—greater diversification, active tilts, and discipline matter more than they have in years.

Market observations as of 1/29/2025 and subject to change. Not to be used, or interpreted, as investment advice or recommendation. 

IMPORTANT INFORMATION

Definitions:

S&P 500 Index is a weighted index of common stocks of 500 leading companies in leading industries of the U.S. economy, capturing 75% coverage of U.S. equities. The index is capitalization weighted, thereby giving greater weight to companies with the largest market capitalizations.

Russell 1000® Growth Index measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. It is market-capitalization weighted.

A basis point (BPS) is a unit of measure used to indicate percentage changes in financial instruments. Basis points are typically expressed with abbreviations “bp,” “bps,” or “bips.” One basis point equals to 1/100th of 1%, or 0.01%. In decimal form, one basis point appears as 0.0001 (0.01/100).

Information provided in this newsletter is general in nature, is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed are those of the author(s) of the stated period of commentary and may change at any time based on market, or other conditions, and are not intended to be a forecast of future events, a guarantee of future results or investment advice. Securities and sectors referenced should not be construed as a solicitation or recommendation, or be used as the sole basis for any investment decision.

All investments contain risk and may lose value. Statements concerning financial markets trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.

Past performance is not a guarantee of future results. Portfolio balancing and diversification do not guarantee a profit or protection against loss in a declining market.

No guarantee or representation is made that investment objectives and/or opinions stated will be achieved. The experience of each specific client or investor may vary.

Due to the subjective aspects of these analyses, the effective evolution of the economic variables and values of the financial markets could be significantly different from the projections, forecasts, anticipations and hypotheses, which are communicated in this analysis.

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GE-8725205.1 (01/2026) (Exp. 01/2030)