Busy week ahead: FOMC policy call meets earnings from major tech and industrials

Markets closed another rough week as 2026 opened with tension everywhere. Stocks slipped again while traders reacted to geopolitics, weather shocks, and policy risk. The mood stayed cautious from Monday to Friday. Nothing felt settled. Money moved fast, but confidence did not.

The S&P 500 finished Friday barely above flat, up less than 0.1% on the day, yet still ended the week down 0.4%.The Dow Jones Industrial Average dropped 0.7% over the week.The Nasdaq Composite gained 0.3% on Friday but still closed the week down about 0.1%.

Outside stocks, natural gas futures stole the spotlight. Prices jumped 75% in five sessions as Winter Storm Fern pushed Arctic cold and snow across more than 150 million people in the United States.

Geopolitics shake currencies as Davos exposes deeper cracks

The loudest political signals came from Switzerland. World leaders and executives gathered at the World Economic Forum in Davos. Donald Trump, now the 47th president of the United States, reached a “framework” agreement with European leaders over Greenland. The talks eased immediate tariff threats. They did not end broader friction.

Since the post-pandemic rally, currencies had stayed quiet while stocks ran on earnings, AI optimism, and steady U.S. equity demand. That balance is starting to shift. Macquarie global FX and rates strategist Thierry Wizman said the Greenland deal only handled surface issues. He wrote that it did not solve what he called the “mutual alienation” between the U.S. and its allies. He also warned of a world that looks more fractured, where the dollar loses strength and the U.S. turns inward toward the Western Hemisphere.

Despite the pause in tariffs and the EU suspending retaliation plans, traders still moved away from the dollar.

Over five days, EUR/USD rose nearly 2%. The Swiss franc climbed more than 2.7% against the dollar. The yen gained about 1.8% by the end of the week. The flows showed demand for safety outside the greenback.

Fed holds rates steady as chair race draws market focus

Attention now turns to Washington. The Federal Reserve meets Wednesday. Traders expect no rate change. Futures data from CME Group showed a 97% chance the Fed keeps rates in the 3.5% to 3.75% range.

The bigger story sits beyond this meeting. Jerome Powell finishes his term in May. Trump’s next pick for Fed chair has become the market’s real obsession.

Polymarket odds showed Rick Rieder, BlackRock’s global CIO for fixed income, moving into the lead by Friday afternoon.

Former Fed official Kevin Warsh stood at 33%. Trump’s top economic adviser Kevin Hassett trailed at 6%. Speaking in Davos, Trump said Rieder was “very impressive.”

The economic data calendar stays busy. Monday brings the Chicago Fed national activity index, durable goods orders, and Dallas Fed manufacturing numbers.

Tuesday includes ADP employment data, housing prices, Richmond Fed manufacturing, consumer confidence, and Dallas Fed services activity. Friday ends the week with producer price data, covering monthly and yearly figures for headline and core inflation.

Corporate earnings flood markets as AI spending dominates

This is one of the heaviest earnings weeks of the year. Reports hit every day. Monday includes Southern Copper, Nucor, Ryanair, Steel Dynamics, AGNC Investment, and Western Alliance. Tuesday ramps up with UnitedHealth, Boeing, RTX, UPS, General Motors, Texas Instruments, Union Pacific, and American Airlines.

Wednesday brings the core event. Microsoft, Meta, and Tesla all report after the close. They are joined by ASML, IBM, ServiceNow, Starbucks, AT&T, GE Vernova, Danaher, Waste Management, and more. Thursday follows with Apple, Visa, Mastercard, Caterpillar, Honeywell, Lockheed Martin, Blackstone, Deutsche Bank, Royal Caribbean, and Valero Energy.

For tech, the focus stays on spending. Meta CFO Susan Li said in October the company raised its 2026 spending outlook to $70 billion to $72 billion, up from an earlier $66 billion to $72 billion range.

Microsoft CFO Amy Hood said the company plans to spend more in 2026 than the $88.2 billion used in 2025. Both companies report Wednesday night. Amazon and Alphabet are set for early February.

Funding this push is reshaping credit markets. Apollo chief economist Torsten Sløk wrote that tech companies issued nearly $700 billion in investment-grade debt last quarter.

That puts the sector close to the financial industry, which issued just over $800 billion and usually leads the market.

Concerns remain. Bank of America strategists Haim Israel and Menka Bajaj said fewer investors now talk about an AI bubble, but risks still exist. They wrote, “AI is a fundamental revolution that is about to change everything, but we cannot ignore valuation debate and timing.”

Public pressure is also rising. Jefferies strategists once again pointed to growing concern over data centers, energy costs, water use, job security, and electricity bills. They wrote, “AI investments sit directly in the cross-hairs of the current political debate around affordability.”