Stocks ended last week with modest losses after a volatile five days of market-moving economic data, geopolitics, and Fed drama.

The Standard & Poor’s 500 Index slid 0.38 percent, while the Nasdaq Composite Index skidded 0.66 percent. The Dow Jones Industrial Average edged down 0.29 percent. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.41 percent.1,2

Choppy Trading
Stocks started the week lower after pre-opening bell news that the Justice Department had launched a criminal investigation into Federal Reserve Chair Jerome Powell. A statement issued Tuesday morning by central bankers worldwide helped tamp down market volatility.

The White House called for a 10 percent cap on credit card interest rates for 1 year, putting pressure on financial stocks. Meanwhile, news that headline inflation matched forecasts while core inflation came in cooler than expected was well received by investors.

Despite solid retail sales and wholesale inflation reports for November, stocks were under pressure on Wednesday due to geopolitical tensions and disappointing Q4 results from a handful of financial stocks

Then chip manufacturers and banks led a rebound, recouping most of the week’s losses. Markets opened higher on Friday but then slid after the president backtracked on his preferred candidate to be the next Fed Chair. His comments led investors to believe that his new choice would be more market-friendly but perhaps less likely to adjust interest rates

Source: YCharts.com, January 17, 2026. Weekly performance is measured from Monday, January 12, to Friday, January 16. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.
Fed Drama
Tensions between the White House and the Federal Reserve escalated last week after the Justice Department issued a criminal indictment against Fed Chair Powell.
Powell, typically calm and collected in the face of criticism, posted an assertive video Sunday night. By the close of the week, however, investors seemed to have moved past the Fed drama as there was plenty of other news to follow.
This week: Key Economic Data
Wednesday: Construction Spending* (Nov). Pending Home Sales.
Thursday: Weekly Jobless Claims. Gross Domestic Product, Q3 (first revision). Personal Consumption & Expenditures (PCE) Index* (Nov).
Friday: Consumer Sentiment. Purchasing Managers’ Index (PMI)—Services & Manufacturing.