Weekly Economic Update – 02/02/2026

The Week on Wall Street

Stocks were mixed last week as investors navigated Q4 corporate results, a widely expected Fed decision, and a handful of economic reports.

The Standard & Poor’s 500 Index rose 0.34 percent, while the Nasdaq Composite Index edged down 0.17 percent. The Dow Jones Industrial Average declined 0.42 percent. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.22 percent.^1,2

S&P 500 Touches 7,000

The S&P 500 and Nasdaq advanced early in the week as investors looked ahead to the Fed meeting and corporate results from several large companies.^3,4

On Wednesday, the Federal Reserve decided to keep interest rates steady, as widely expected. Market reaction was muted, with all three major averages little changed by the close. Disappointing earnings results from one megacap tech firm, announced after the market closed on Wednesday, unsettled investors and dragged the Nasdaq down on Thursday.^5,6

Stocks opened lower Friday, after the White House nominated Fed veteran Kevin Warsh as the next Fed chair. A warmer-than-expected December wholesale inflation report and concerns about a government shutdown added to bearish investor sentiment as the week wrapped up.⁷

The Fed Holds Steady

The Fed funds rate was held at its current 3.5 percent to 3.75 percent target range at its January meeting. The decision followed three consecutive meetings at which the Fed cut rates; it marked the first time the Fed held rates steady since July. The next Fed meeting is in mid-March.⁸

At the post-meeting press conference, Fed Chair Powell did not answer any questions regarding the Justice Department’s investigation. The January 19, 2026, issue of Weekly Market Insights misstated the status of the investigation concerning the Fed Chair by referring to it as an indictment. We regret any confusion.

Weekly Riddle

Note this sequence: B, C, D, E, G. What letter should then follow as the sixth letter in this series? 

Last Week’s Riddle: The more of these you take, the more of these you will likely leave behind. What are they?

Answer: Footsteps and footprints.

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
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Posted on February 2, 2026