Market Update: Global Events, the Federal Reserve, and Gold and Silver
The beginning of the year saw gains for both stocks and bonds, continuing the upward trend from previous years. This may come as a surprise to some investors, given that there were multiple periods when markets moved up and down due to global political events and Federal Reserve decisions. While news headlines caused short-term price swings, including the S&P 500’s largest single-day drop since last October, markets bounced back quickly. Within a few days, major market indexes hit new record highs, helped by strong company profits that have supported investment portfolios.
For investors focused on the long term, January is a helpful reminder that news headlines can cause markets to move in unexpected ways, but the underlying strength of the economy and sticking to your long-term financial plan are what really count. While global political events and uncertainty about government policies will likely cause more ups and downs throughout 2026, the best approach to handle these challenges is to maintain a balanced mix of investments that matches your long-term financial goals. TrueVine Family Wealth in Naples, Florida is here to help you understand and navigate these reports for your family’s investments.
Important Market And Economic Events In January
- The S&P 500 (a measure of 500 large U.S. companies) increased 1.4% in January and briefly crossed 7,000 for the first time during trading hours. The Nasdaq Composite (which tracks many technology companies) rose 0.9% and the Dow Jones Industrial Average (which follows 30 major companies) gained 1.7%.
- The CBOE VIX (a measure of expected market volatility, sometimes called the “fear index”) ended the month at 17.44 after rising above 20 due to global political tensions.
- The Bloomberg U.S. Aggregate Bond Index (a measure of the overall bond market) climbed 0.1% over the month as long-term interest rates rose. The 10-year Treasury yield (the interest rate paid by a 10-year U.S. government bond) ended the month at 4.24%, the highest level since last September.
- International developed markets (stocks from wealthy countries outside the U.S.) jumped 5.2% in U.S. dollar terms based on the MSCI EAFE Index, while emerging markets (stocks from developing countries) gained 8.8% based on the MSCI EM Index.
- President Trump announced the nomination of Kevin Warsh as the next Fed Chair (the leader of the Federal Reserve, which is the U.S. central bank). If approved by the Senate, he would take office in mid-May.
- Gold surged to a record close of $5,417 per ounce before dropping nearly 10% on January 30.
- Similarly, silver closed as high as $116.70 before falling to finish the month at $85.20.
- The U.S. dollar index (a measure of the dollar’s value compared to other currencies) fell further to about 97.0, reaching its weakest level in nearly four years, before bouncing back slightly following the Fed Chair news.
- The Federal Reserve held its policy rate (the interest rate that influences borrowing costs throughout the economy) at 3.50 to 3.75% at its January meeting, following three consecutive quarter-point cuts in the second half of 2025.
- Consumer Price Index inflation (a measure of how much prices are rising for everyday goods and services) remained at 2.7% year-over-year in December, still above the Fed’s 2% target. The Producer Price Index (which measures prices that businesses pay) accelerated to 3.0%.
- Washington ended the month with a partial government shutdown.
- Severe winter weather across much of the Eastern and Southern United States caused natural gas and electricity prices to spike.
Global Political Tensions Caused Market Volatility To Increase
Early in the month, a U.S. operation in Venezuela resulted in the capture of Nicolás Maduro. While the operation centered around narco-terrorism, much of the discussion quickly turned to oil. Venezuela holds the world’s largest proven oil reserves but produces less than 1% of global crude oil due to its poor infrastructure. For investors, the main way that global political events affect financial markets is through commodity prices (raw materials like oil and metals), and oil remains central to the global economy.
Global political concerns increased further over U.S. statements regarding the purchase of Greenland due to its strategic importance to defense and commodities. This sparked diplomatic disputes with NATO countries involving tariffs (fees charged on imported goods) that led to the S&P 500’s worst day since last October. However, the situation quickly calmed down after President Trump met with the NATO secretary general and established a “framework of a future deal,” leading the market to bounce back.
For long-term investors, global political events may cause short-term uncertainty but history shows that the effects on markets and the economy are often overstated. Markets have typically recovered as the initial shock passes. Investors should avoid over-reacting to headlines and instead maintain a long-term focus on financial goals.
Work with TrueVine Family Wealth in Naples, FL to discuss your personal finances and develop a strategic plan to help you work towards your financial goals.
Federal Reserve Concerns Affected Gold, Silver, And The Dollar
Precious metals (gold and silver) continued to rally until a significant reversal on the final day of January. Gold rose to nearly $5,600 during trading hours while silver’s spot price exceeded $120 per ounce before they both sold off. These moves have been driven by a combination of factors including global political risk, central bank purchases (when countries’ central banks buy gold), and concerns about Federal Reserve independence.
The moves driving gold and silver have been referred to as the “debasement trade,” or the idea that government spending and monetary policies that effectively weaken the dollar, create budget deficits, and lead to inflation may strengthen precious metals. Fed uncertainty, including whether a new Fed chair might push interest rates lower, has driven these metals higher.
However, on January 30, President Trump announced his intention to nominate Kevin Warsh as the next Fed Chair once Jerome Powell’s term is up in mid-May. Warsh is a former Fed governor who has recently stated that he prefers lower interest rates. However, he has also been hawkish in the past, meaning he has advocated for keeping rates higher to prevent inflation. For investors, this shifted expectations since it suggests there may be a smoother transition between Fed Chairs. This led to a drop in both gold and silver, with the dollar rising slightly.
This reversal highlights both that precious metals are prone to boom-and-bust cycles (dramatic rises and falls in price), and demonstrates how quickly markets can shift based on policy expectations. While precious metals can serve investors, their price swings during January demonstrate why they need to complement, rather than replace, core holdings in stocks and bonds.
Company Earnings Remained Healthy Despite Uncertainty
Beyond the main global headlines, the fourth quarter earnings (the profits that companies report each quarter) showed that companies continue to perform well. According to FactSet, 33% of S&P 500 companies have reported results and 75% have beaten expectations. If these trends continue, large public companies could be on track to achieve a growth rate of 11.9% for the quarter, representing the 5th consecutive quarter of double-digit earnings growth. On a trailing 12-month basis (looking back over the past year), earnings growth has accelerated to 12.8% according to consensus estimates.
Naturally, many investors are focused on AI and technology earnings since these stocks have contributed to market returns over the past several years. So far, markets have had mixed reactions to the earnings of these companies, even when they beat estimates, due to lofty expectations and questions around the sustainability of this spending. At the same time, many other sectors (different parts of the economy like healthcare, manufacturing, or retail) have benefited from broad economic growth and have grown their earnings at a faster rate as well. Contact TrueVine Family Wealth to discuss your financial goals today.
For long-term investors, the underlying message from earnings season is positive. Corporate profitability (how much profit companies are making) remains strong across many sectors, supporting stock valuations (the prices investors pay for stocks). This fundamental strength is one reason major market indexes remained positive for the month despite considerable ups and downs.
Severe Weather Affected Much Of The Country
January’s severe winter weather, dubbed Winter Storm Fern, affected at least 21 states and more than half the U.S. population. The storm forced state emergency declarations and created disruptions to economic activity, including power outages and thousands of flight cancellations.
While the safety of those affected by the storm is the top priority, history shows that weather-related disruptions such as hurricanes and blizzards have little long-term effect on the national economy. The key distinction is whether these events affect productive capacity (such as factories, equipment, and businesses), or whether they simply postpone activity. In this case, temporary disruptions to sectors such as retail and construction just shift economic activity forward.
This blog is published by TrueVine Family Wealth. The firm is registered as an investment adviser with the state of Florida and only conducts business in states where it is properly registered or is excluded from registration requirements. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of any subjects discussed. All expressions of opinion reflect the judgment of the authors on the date of the post and are subject to change. Blog posts were prepared by Clearnomics, a third-party content provider.
You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Estate planning rules and regulations are subject to change at any time.
All investments have the potential for profit or loss. Different types of investments and strategies involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. Asset allocation, rebalancing, and diversification will not necessarily improve a client’s returns and cannot eliminate the risk of investment losses.
Historical performance returns for investment indexes and/or categories, usually do not deduct transaction and/or custodial charges or an advisory fee, which would decrease historical performance results. There are no guarantees that an investor’s portfolio will match or outperform a specific benchmark. Historical returns do not represent the performance of TrueVine or any of its advisory clients.
Copyright (c) 2026 Clearnomics, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company’s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security–including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.