January Moved Fast
Markets wasted no time in 2026. The S&P 500 posted strong gains in January, fueled by continued AI-driven momentum and better-than-expected earnings from major technology companies. But beneath the headline numbers, the story was more nuanced.
What Happened
Large-cap growth stocks led the charge, extending the trend that defined much of 2025. Meanwhile, small-cap stocks and international equities offered mixed signals, with some pockets of strength in European markets and continued headwinds in emerging markets.
Fixed income saw modest volatility as the market digested the Federal Reserve's updated guidance on rate policy. The yield curve continued to normalize, and credit spreads remained tight — a sign that bond markets are not pricing in significant recession risk.
How We Are Positioned
For our client families, the key takeaway is that portfolios built for the long term are designed to navigate exactly these kinds of environments. We are:
- Maintaining our strategic asset allocation targets
- Selectively rebalancing where drift has created opportunity
- Continuing to favor quality across both equity and fixed income holdings
- Monitoring tax-loss harvesting opportunities in international positions
Looking Ahead
February brings the next round of economic data, including employment reports and consumer spending figures. We will be watching closely, but our investment philosophy remains unchanged: disciplined, diversified, and focused on your long-term plan.
Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.