Markets Are Calm. Everything Else Isn't.

This week, corporate earnings, interest rates, trade threats, currency jitters, precious metals, and a looming government shutdown are all colliding. What's striking is how calmly markets are absorbing it.

This is the moment when the story of 2026 begins to take shape. More than 100 companies in the S&P 500 are reporting this week, and nearly 80% of those that have already spoken have beaten expectations. United Parcel Service is forecasting higher revenue next year. General Motors just posted stronger core profits. RTX reported higher quarterly sales. Even as JetBlue struggles under the weight of winter storm disruptions and wider losses, the broader picture is one of corporate resilience.

Yet not all surprises are welcome. Health insurers took a sharp hit after the Trump administration proposed keeping Medicare Advantage payment rates roughly flat. UnitedHealth's shares fell close to 15%, despite an upbeat profit outlook for 2026. Humana and CVS dropped even more. The message from Washington was clear: this White House is willing to disappoint Wall Street if it suits its political priorities. This morning, futures on the S&P 500 edged up 0.3% and the Nasdaq 100 climbed 0.6%. However, the Dow Jones was down 0.5%, dragged down by UnitedHealth.

Meanwhile, the technology giants are back in the spotlight. Meta, Microsoft, Tesla, and others from the so-called "Magnificent Seven" are about to report, and their results will test the durability of the artificial intelligence boom. The rally of the past year has been built on the promise that AI spending will translate into real demand. Investors now want proof that money is flowing in from actual users-businesses, customers, and third parties-not just from companies building ever-larger systems for one another.

That anxiety may help explain a subtle shift underway. While big tech still commands attention, smaller companies are having a moment. The Russell 2000 has climbed more than 7% this month, far outpacing the S&P 500.

Hovering over all of this is the Federal Reserve. The central bank begins its policy meeting today, and almost no one expects a rate change. The real focus is what comes next. Inflation is cooling in some key areas, housing costs are easing, oil prices are low, and cheap imports-especially from China-are exerting deflationary pressure. Some analysts argue this could eventually force the Fed to cut rates sharply. Others believe strong growth and a recovering labor market justify a long pause. Either way, Chair Jerome Powell is navigating not just economic data, but political pressure, as questions about the Fed's independence resurface amid a Justice Department inquiry involving him.

Outside the United States, the picture is just as tangled. Currency markets are watching Japan closely, where speculation about official intervention has pushed the yen higher against the dollar. Sometimes, the threat of action is enough: markets often do the work themselves once governments start clearing their throats. Japan matters more than many Americans realize. Its savers, interest rates, and currency sit at the center of a vast global financial web. A meaningful shift there ripples everywhere.

Trade tensions add another layer. Donald Trump has threatened to raise tariffs on South Korea, accusing it of dragging its feet on a prior deal. He's also warned Canada over potential trade talks with China. At the same time, India and the European Union have finalized a free-trade agreement that will slash tariffs on most goods. America's allies are adjusting, hedging, and, in some cases, quietly looking elsewhere. 

Domestically, politics are tightening the screws. Congress faces a January 30 deadline to avoid a partial government shutdown. Funding for the Department of Homeland Security is on the table, giving Democrats leverage amid public anger over immigration enforcement tactics. A recent fatal shooting by federal agents has intensified scrutiny, and the administration is scrambling to contain the fallout.

In commodities, anxiety is showing up more clearly. Gold is holding above $5,000 an ounce. Silver has gone even further, soaring from around $30 a year ago to roughly $109 today. 

And yet, despite all of this, equity markets keep grinding higher. The S&P 500 has posted four straight gains. European stocks are inching up. Asian markets, especially South Korea's, are on a remarkable run. Investors seem willing to accept trade threats, political drama, and central bank suspense as the cost of doing business in 2026.

Today's economic highlights:

On today's agenda: NAB Business Confidence in Australia; Consumer Confidence in France; Unemployment Rate in Spain; in the United States, S&P/Case-Shiller Home Price Index, CB Consumer Confidence, and API Crude Oil Stock Change; ECB President Lagarde's speech in the Euro Area. See the full calendar here.

• Dollar index: 96,620
• Gold: $5,089
• Crude Oil (BRENT): $64.57 (WTI): $60.47
• United States 10 years: 4.22%
• BITCOIN: $87,912

In corporate news:

• Starbucks is struggling with persistent supply chain issues caused by outdated systems, scattered suppliers, and flawed AI tools, despite CEO Brian Niccol's modernization efforts.
• General Motors beat expectations with a Q4 adjusted EPS of $2.51 and reported a 13% rise in core profit, driven by strong SUV and truck sales, while announcing a $6 billion buyback and raising its dividend.
• UnitedHealth reported a steep Q4 profit drop due to $1.6 billion in charges and forecasted modest 2026 growth, but shares plunged after the U.S. proposed only a 0.09% increase in 2027 Medicare Advantage payments, disappointing insurers including CVS and Humana.
• SKB and Reinsurance Group of America (RGA) jointly acquired the 513,000 sq ft Columbia River Collection property in Portland, Oregon.
• The EU is pressuring Google to grant equal access to its data and AI tools under the Digital Markets Act, which the company warns could undermine privacy and innovation.
• One year after launch, Trump's $175 billion Golden Dome missile-defense initiative has made little progress, bogged down by technical and strategic disagreements, especially over space-based weapons.
• Tesla's European sales plunged 27% in 2025, while BYD tripled its figures, reflecting shifting consumer preferences and rising competition in the EV market.
• Exxon Mobil reported an SO2 exceedance at its Joliet, Illinois, refinery due to a cold weather-induced process upset and has also started operations on multiple carbon capture and storage projects in the U.S.
• Micron Technology will invest $24 billion in Singapore to build a wafer fabrication plant to meet AI-driven chip demand.
• Union Pacific reported a 7% rise in Q4 profit, aided by higher freight revenue and pricing, amid its planned merger with Norfolk Southern.
• NextEra Energy beat Q4 profit estimates due to higher power demand and growth in renewables and battery storage.
• HCA Healthcare beat earnings estimates and raised its 2026 profit outlook, authorizing a $10 billion buyback and increasing its dividend.
• UPS beat Q4 earnings expectations and forecast higher 2026 revenue, supported by a shift to higher-margin shipments and cost-cutting initiatives.
• Third Point launched an activist campaign against CoStar, seeking to overhaul the board and refocus the company on its core commercial real estate operations.
• Boeing swung to a Q4 profit driven by a unit sale and improved jet deliveries, and reported a record $682 billion backlog.
• Pinterest is cutting nearly 15% of its workforce and reducing office space to reallocate resources toward AI development.
• Meta signed a deal to pay Corning up to $6 billion for fiber-optic cables to support its AI data centers.
• Northrop Grumman reported higher Q4 earnings and revenue on global weapons demand but issued a 2026 forecast below expectations.
• RTX posted a 12% rise in Q4 revenue and issued an upbeat 2026 outlook, driven by demand for jet engines and aircraft maintenance.
• Kimberly-Clark exceeded profit expectations due to cost cuts and demand for essentials, raised its dividend, and expects double-digit EPS growth in 2026.
• Synchrony Financial posted a lower Q4 profit due to a restructuring charge and higher expenses, but expects strong 2026 growth after winning back the Walmart credit card account.
• The FCA launched a review of advanced AI's implications on consumers and financial markets, with support from Nvidia.
• Nike is investigating a potential data breach claimed by the World Leaks ransomware group.
• Micro Systemation reported a 19.6% revenue increase and proposed a higher dividend per share.

Analyst Recommendations:

• Doordash, Inc.: Stifel downgrades to hold from neutral and reduces the target price from USD 253 to USD 224.
• Exelon Corporation: Wolfe Research downgrades to peerperform from outperform.
• Firstenergy Corp.: Wolfe Research upgrades to outperform from peerperform with a target price of USD 50.
• Inspire Medical Systems, Inc.: RBC Capital downgrades to sector perform from outperform and reduces the target price from USD 175 to USD 90.
• Intuitive Surgical, Inc.: Freedom Broker upgrades to buy from hold with a price target raised from USD 560 to USD 610.
• Matador Resources Company: Wells Fargo downgrades to market weight from overweight and reduces the target price from USD 61 to USD 47.
• Oneok, Inc.: JP Morgan downgrades to neutral from overweight and reduces the target price from USD 87 to USD 83.
• Te Connectivity Plc: Oppenheimer upgrades to outperform from market perform with a target price of USD 270.
• Venture Global, Inc.: JP Morgan downgrades to neutral from overweight and raises the target price from USD 10 to USD 11.
• Atlassian Corporation: UBS maintains its neutral recommendation and reduces the target price from USD 185 to USD 145.
• Entegris, Inc.: Citi maintains its buy recommendation and raises the target price from USD 100 to USD 145.
• Freeport-Mcmoran Inc.: Morgan Stanley maintains its overweight recommendation and raises the target price from USD 53 to USD 70.
• Micron Technology, Inc.: Mizuho Securities maintains its outperform rating and raises the target price from USD 390 to USD 480.
• Paypal Holdings, Inc.: HSBC maintains its buy recommendation and reduces the target price from USD 93 to USD 72.
• Roblox Corporation: Piper Sandler & Co maintains its overweight recommendation and reduces the target price from USD 180 to USD 125.
• Sandisk Corporation: Mizuho Securities maintains its outperform rating and raises the target price from USD 410 to USD 600.
• Servicenow, Inc.: JP Morgan maintains its overweight recommendation and reduces the target price from USD 1075 to USD 215.
• Slb N.v.: UBS maintains its buy recommendation and raises the target price from USD 50 to USD 61.
• Ulta Beauty, Inc.: Piper Sandler & Co maintains its overweight recommendation and raises the target price from USD 615 to USD 775.
• Yeti Holdings, Inc.: Goldman Sachs maintains its neutral recommendation and raises the target price from USD 36 to USD 45.