What Really Happened in the Markets Last Week (12th-16th JANUARY 2026)

Last week’s market moves were not driven by emotion or speculation.
They were driven by data, positioning, and shifting expectations 🧠

If we step back and look at the bigger picture, the message from the market was clear:

👉 The US economy remains resilient, inflation pressures are easing, and risk sentiment has stabilized, for now.

🇺🇸 US Data Set the Tone

Several key US data points came in stronger than expected 📈

• 🛒 Retail Sales confirmed that consumer demand remains healthy

• 👷 Jobless Claims dropped below the 200,000 level, reinforcing labor market strength

• 🏭 Empire State & Philly Fed manufacturing surveys both beat expectations

This combination matters.

It tells the market that growth is still present, even as inflation continues to cool 🔥➡️❄️
That is a constructive backdrop for policymakers and removes the urgency for aggressive action.

🏦 What This Means for the Federal Reserve

With inflation no longer accelerating and economic activity holding up, the Federal Reserve has little incentive to change course in the near term ⏸️

As a result, markets increasingly priced in the expectation that interest rates will remain unchanged in January 📌

This shift supported the US dollar and reduced the appeal of assets that benefit most from falling rates.

🌍 Impact Across Markets

💵 US Dollar
The dollar strengthened steadily throughout the week, supported by solid data and stable rate expectations.

🪙 Gold & Silver
Precious metals pulled back, not because the long-term narrative has changed, but because near-term risk premiums eased and the dollar gained strength.
This looked more like a corrective phase than a structural reversal.

📈 Equities
Equity markets rebounded as fears of an imminent slowdown faded.
Investors took comfort in the idea that growth remains intact and monetary policy is likely to stay steady, for now.

🛢️ Geopolitics & Oil

Geopolitical tensions eased slightly toward the end of the week, particularly around Iran 🌍
Reports suggesting a pullback from immediate military action triggered a sharp move lower in oil prices, with crude falling more than 4% 📉

That said, this should be seen as temporary relief, not resolution ⚠️

• Venezuela remains on the radar

• Arctic tensions are rising, with increased NATO presence in Greenland ❄️

• These developments continue to weigh on the euro

🧭 The Bigger Picture

Last week was not about fear or euphoria.

It was about recalibration ⚖️

Markets adjusted to a reality where:

• Growth is slowing, but not collapsing

• Inflation is easing, but not gone

• Geopolitical risks remain present, but contained, for now

This is an environment that rewards patience, context, and discipline.

Short-term noise will continue 🔊
But understanding why markets move matters far more than reacting to what moves.

That is the mindset going into the weeks ahead.