Stock Market Update

Equity futures point to a slightly lower opening this morning after a geopolitically volatile previous week for stocks that saw the major averages finish modestly lower, though considerably improved from early-week lows. 

This week could also prove to be eventful for equities, as the market will have several directional drivers in play. 

Though just a few companies reported earnings before the open this morning, nearly 100 S&P 500 names are set to report this week. In the mix are four of the "magnificent seven" names: Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), and Tesla (TSLA). The mega-cap group has had a sluggish start to 2026, with themes of broadening leadership into cyclical and small caps generating a fair share of coverage this year. 

With several of these stocks (and the major averages) hovering at record valuations, it will be important for companies to issue impressive forward guidance to maintain upward momentum. 

On the policy front, the January FOMC meeting kicks off on Tuesday, with the decision to follow on Wednesday. It is almost fully priced in that the Fed will not be making any changes to the target rate, though the market always pays keen attention to commentary from Fed Chair Jerome Powell. 

Elsewhere, geopolitical tensions continue to make headlines. President Trump has threatened 100% tariffs on Canada if they make a free trade agreement with China. 

In Washington, Senate Minority Leader Chuck Schumer says Democrats will vote against the six-bill government funding package if the DHS funding bill is included because of the DHS shootings. The government funding deadline is Friday, according to Politico. 

In corporate news:

• Airlines cancel thousands of flights due to the winter storm, according to CNBC. 
• The U.S. is in discussions with Chevron (CVX 168.52, +1.80, +1.1%) and other producers to quickly increase oil production in Venezuela, according to Bloomberg. 
• The Trump administration is planning to take a 10% stake in USA Rare Earth (USAR 28.02, +3.25, +13.1%), according to Financial Times.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mostly lower showing on Monday with South Korea's Kospi (-0.8%) reversing after reaching a fresh record, while markets in Australia and India were closed for holidays. Japan's Nikkei: -1.8%, Hong Kong's Hang Seng: +0.1%, China's Shanghai Composite: -0.1%, India's Sensex: HOLIDAY, South Korea's Kospi: -0.8%, Australia's ASX All Ordinaries: HOLIDAY.

In news:

• The Japanese yen has extended its Friday rally against the dollar after it was reported that the New York Fed conducted rate checks with banks, suggesting that an intervention is taking shape.
• Furthermore, Japan's Prime Minister Takaichi hinted at an intervention during a televised debate on Sunday.
• China's President Xi removed one of PLA's top generals.
• India is planning to sign a trade deal with the EU tomorrow.

In economic data:

• Japan's November Leading Index 109.9 (expected 110.5; last 109.8) and Coincident Indicator -1.0% m/m (expected -0.7%; last -1.3%)
• Singapore's December Industrial Production -13.3% m/m (expected -15.2%; last -7.8%); 8.3% yr/yr (expected 10.1%; last 18.2%)

Major European indices are mostly higher while regional sovereign debt is also on the rise. STOXX Europe 600: UNCH, Germany's DAX: +0.1%, U.K.'s FTSE 100: +0.2%, France's CAC 40: -0.2%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.5%.

In news:

• Embattled French Prime Minister Lecornu forced a spending bill for 2026 through parliament without a vote.
• France will preside over a call between G-7 finance ministers tomorrow.
• Ukraine's president said that a security agreement with the U.S. is ready.

In economic data:

• Germany's January ifo Business Climate Index 87.6 (expected 88.3; last 87.6). January Current Assessment 85.7 (last 85.6) and Business Expectations 89.5 (last 89.7)
• Spain's December PPI -3.0% yr/yr (last -2.5%)