Here is Schwab's early look at the markets for Monday, January 12.

A busy week of earnings, Fed speakers, and inflation readings await investors still chewing over Friday's jobs data.

Today is light on the economic front, but tomorrow before the open brings the December Consumer Price Index, or CPI. That's followed by the December Producer Price Index, or PPI, on Wednesday. Other reports to watch include retail sales, existing and new home sales, and industrial production.

Tomorrow also features the unofficial start of fourth-quarter earnings season as JPMorgan Chase reports before the open. That's followed by a host of large Wall Street and smaller regional bank earnings later in the week, along with Delta Air Lines. There aren't any notable companies reporting today.

For CPI, analysts expect 0.2% growth in December, and the same for core CPI that excludes volatile food and energy prices. The numbers in November, which may have been affected by the government shutdown, were also 0.2%. Perhaps more important are the annual readings, which were 2.6% for core and headline CPI in November. Those remain well above the Fed's 2% goal and have been relatively stubborn. However, Federal Reserve Chairman Jerome Powell thinks they would have been closer to 2% if not for President Trump's tariffs.

Friday's nonfarm payrolls report showed lackluster jobs growth in December as the economy created just 50,000 positions, below a downwardly revised 56,000 in November. However, unemployment fell unexpectedly to 4.4%, possibly a relief for Federal Reserve officials who'd worried about a recent climb. January rate cut odds dropped sharply due to the decline in the unemployment rate, and by late Friday chances of a rate cut at the Fed's meeting later this month were 5%, off from 16% a week earlier and 22% a month ago, according to the CME FedWatch Tool.

"The drop in the unemployment rate pulled the implied probability of a Fed rate cut to nearly zero," said Collin Martin, head of fixed income research and strategy, Schwab Center for Financial Research, or SCFR. "Fed officials likely welcomed the drop in the unemployment rate back down to 4.4% after unexpectedly rising to 4.6% in November (although that was revised down to 4.5%). Nonfarm payroll gains remain muted however. A comprehensive look at the report supports the idea that the labor market is continuing to cool. This shouldn't change the Fed's near-term plans, and we still expect the Fed to hold rates steady for the next few meetings."

The Supreme Court didn't issue a tariff opinion Friday, though it's possible it could deliver one later this week. Some of the cyclical sectors that had climbed in part on hopes that the Court might strike down President Trump's tariffs momentarily flinched when the news hit early Friday, but bounced back quickly. This could be a preview of what happens if the court does rule against Trump, as some investors hope tariff-related pressure on retailers, industrial equipment makers, and other companies might ease. However, Trump would likely find other ways to enact at least some tariffs.

Returning to Friday's data, though jobs growth in December wasn't far below expectations,, revisions to the previous two reports were relatively steep, removing 76,000 positions.

The drop in unemployment could also be a sign of fewer people looking for work, simply because they gave up. However, the number of people categorized as "discouraged workers" fell in December by 183,000, the government said. The number of people not in the labor force who want a job was little changed in December but up 684,000 over the last year. There's also been a rise in people employed part-time who want full-time work but can't get it.

"The kneejerk response focused on the move lower in the unemployment rate, given the pop in November that was disturbing," said Kevin Gordon, head of macro research and strategy at SCFR. "Plus, rate cut odds weren't extreme heading into the report, so I think it'd be a different story if the market was pricing in a full cut Thursday and then suddenly did a 180 on Friday morning. At the same time, though, December's report did confirm that hiring momentum was weaker at the end of 2025 than initially thought. If that continues, consumer spending expectations will likely move lower, which might weigh on growth in the first half of the year."

Friday's jobs data may not be the last word as far as the Fed's concerned, and plenty of Fed speaking engagements loom this week that might provide policy makers' thinking on the report. Fed Chairman Jerome Powell warned last month that labor data may have been distorted and policy makers might look at it with "a somewhat skeptical eye." He also thinks these reports are overstating jobs creation.

In other data late last week, preliminary University of Michigan Consumer Sentiment for January was 54.0, versus Briefing.com consensus of 53.0. It's still near historic lows and the report still showed consumers concerned about jobs and inflation.

Short-term Treasury yields ended up gaining sharply Friday as rate cut hopes faded, while longer-term yields fell slightly, causing a dip in the yield curve, hurting bank stocks. The 10-year note yield finished Friday at 4.17%, down two basis points for the week but still near its near-term highs.

Treasury auctions this week include 10-year notes today and 30-year bonds tomorrow. The Fed's Beige Book on Wednesday is another possible highlight for the bond market.

Meanwhile, metals, including silver and copper maintained their upward momentum and crude oil finished the week with a nearly 2% rally, likely bolstered by falling U.S. unemployment.

Major indexes wrapped up a record-breaking week with more gains Friday. The S&P 500 index, Dow Jones Industrial Average, and Russell 2000 all made record highs for the second straight day, and the tech-heavy Nasdaq joined the party with around a 0.9% gain. Volatility, which ticked up earlier last week, fell sharply and the Cboe Volatility Index, or VIX, ended near 14.5. That's near the lower end of its near-term range and suggests market participants don't expect sharp moves in equities over the next month.

The early-2026 rally is broad-based, evident in improved market breadth. By late Friday, more than 70% of S&P 500 companies traded above their respective 50-day moving averages, up from just 30% in late November. It was last at these levels in late August. Stronger breadth is a good sign that solid market performance isn't just a reflection of a few mega-cap stocks at the top of the market capitalization board.

Nine of 11 S&P sectors rose Friday. Only financials and health care lost ground, and financials have a big catalyst ahead this week as bank earnings get underway. Cyclical sectors, including discretionary, materials, industrials, and energy, all performed well since the start of the year, likely reflecting hopes for robust consumer spending, a dovish Fed, and new fiscal policies taking effect that could lower the tax burden for companies.

Looking at other individual performances Friday, Oklo climbed nearly 9% and Vistra added 11% after Meta announced it would back nuclear projects with the two companies to power AI data centers. The rally in Vistra helped utilities to a solid showing on the sector map Friday, finishing only behind materials.

General Motors dropped 2% Friday after announcing it would record $7.1 billion in fourth-quarter charges due to a pullback in EV sales and restructuring efforts in China.

Housing stocks rose after President Trump said he wants to have "representatives" purchase $200 billion in mortgage bonds to help make homes more affordable. The White House didn't clarify details. Rocket Companies, a homeowner services firm, rose 7% on the news. Home-flipping firm Opendoor Technologies climbed 15%. Home builders Lennar and D.R. Horton and Toll Brothers also each gained more than 6%.

Intel rose around 10% Friday after the chip firm received praise from President Trump, who met with the company's CEO. The U.S. government took a stake in Intel last year. Strength translated across the rest of the semiconductor sector, which rose nearly 3%. Big gainers besides Intel included ASML, Oracle, Western Digital, Sandisk, Micron, and Broadcom. Many of these had fallen Thursday in a profit-taking surge.

Tech earnings generally come later this month, but Thursday morning features Taiwan Semiconductor Manufacturing, which makes chips for many companies including Nvidia.

Most of the Magnificent Seven enjoyed gains Friday, with Tesla up 2% to lead the pack, though news was scarce. 
The Dow Jones Industrial Average® ($DJI) jumped 237.96 points Friday (+0.48%) to 49,504.07; the S&P 500 index (SPX) added 44.82 points (+0.65%) to 6,966.28, and the Nasdaq Composite® ($COMP) climbed 191.33 points (+0.82%) to 23,671.35.  

For the week, the DJIA rose 2.32%,the S&P 500 climbed 1.57%, and the Nasdaq rose 1.88%.