Here is Schwab's early look at the markets for Monday, January 26.

After a holiday-shortened week of whipsaw trading amid geopolitical volatility, focus could return to earnings and data as four mega-caps report in coming days. A Federal Reserve meeting starts tomorrow and a key inflation reading looms Friday. Several Treasury auctions also dot this week's calendar and could help set direction following two straight weeks of declines for the S&P 500 index.  

Though heightened international tension faded late last week, elements of risk remained elevated by late Friday. Treasury yields traded above their recent range and volatility fell from recent highs but didn't retreat to recent lows, either. The dollar weakened and gold hit a fresh peak, both signs that investors remain concerned about things beyond data and earnings. The recent surge in precious metals also reflects that.

Overseas factors persist as the week begins, including worries about U.S/Iran tensions. Additionally, Wall Street continues to work through uncertainty over the jump in Japanese yields.

"The significance of that to the rest of the world is Japan's market has been something of an anchor in the global bond market," said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, or SCFR. "Because yields were so low for so long, Japanese investors were eager buyers of other government bonds, especially U.S. Treasuries. If they're going to repatriate their dollars because their domestic yields are rising relative to everyone else, then that removes that anchor, and it allows all the yields to rise in the major developed countries."

The Bank of Japan (BOJ) kept interest rates unchanged Friday, as analysts had expected, and Japanese yields climbed again. The benchmark U.S. 10-year Treasury note yield ended down one basis point at 4.24% Friday, above its near-term range but below the 4.3% peak of last Tuesday. Any sign of yields here getting "un-anchored" and re-testing last week's high, could keep stock rallies in check.

Investors get some road signs this week on yields, starting with a 2-year Treasury note auction, results of which aredue around midday today. A 5-year note auction takes place tomorrow. Recent auctions attracted decent demand despite a "sell America" theme that emerged last Tuesday amid tension over Greenland. If demand for this week's auctions flags, it could suggest more of the same and push yields higher.

"I think it's an exaggeration to say this is a 'sell U.S.' kind of market in the long run," Jones said. "It's just really hard to replace U.S. Treasuries and U.S. dollars in a global financial system. But people are going into things like gold as an alternative."

Yields stay in the spotlight Wednesday when the Fed makes its rate decision. Odds of a move were less than 3% as of late Friday, according to the CME FedWatch Tool. The Federal Open Market Committee, or FOMC, cut rates three consecutive times to close out 2025. This week's Fed meeting doesn't include any updated economic or rate projections, so focus will likely be on any possible changes to the statement and, of course, Fed Chairman Jerome Powell's press conference.

"Inflation remains sticky, with last week’s PCE release showing the 12-month change in both headline and core inflation at 2.8%, while the final third quarter GDP release suggests that the economy remains resilient," said Collin Martin, head of fixed income research and strategy, SCFR. "Since the Fed last met, the unemployment rate has improved and economic data suggests the economic momentum has continued. We expect the Fed to hold rates steady for the next few meetings."

Wednesday afternoon also features earnings from Microsoft, Meta Platforms, and Tesla, followed Thursday afternoon by Apple. Other key firms reporting this week include Boeing, Starbucks and General Motors. Meanwhile, big defense firms and railroads also pepper the calendar, with big oil firms Exxon Mobil and Chevron wrapping up the weekly calendar Friday.

With tech firms reporting, focus returns to capital spending. At times in recent quarters, even solid earnings "beats" by big-tech firms weren't enough to excite the market. With spending climbing quickly, impressive earnings can become harder to deliver. Though the "mega-caps" could dominate headlines, tech earnings this week include smaller but still important names like software stock ServiceNow, representing a sector that's seen pressure from AI concerns.

Memory chip stocks have been red hot lately and earnings from that cohort this week include SanDisk and Western Digital. Semiconductor equipment manufacturer ASML is also on the calendar.

"Buckle up because of the potential for big moves, one way or the other, following these reports," said Nathan Peterson, director of derivatives research and strategy, SCFR.

In Washington, attention turns to Congress as it scrambles to avoid another shutdown. Signs of progress emerged last week when the House of Representatives finished its work on the budget. The Senate will debate appropriations bills this week hoping to pass them all by Friday's deadline.

"Getting all 12 appropriations bills passed by the January 30 deadline now seems virtually assured, though things can still go sideways in the Senate," said Michael Townsend, managing director of legislative and regulatory affairs at Schwab.

Data-wise, the week ahead isn't incredibly meaningful. Perhaps most importantly, U.S. December Producer Price Index (PPI) data arrive Friday. Other reports to watch include durable orders, factory orders, consumer confidence, and new home sales.

Investors might also consider tracking the U.S. dollar index, which fell 0.8% Friday to levels last seen in October near 97.60. This could reflect recent geopolitical concerns as well as Fed rate cuts and ideas that rates could move lower by year-end.

In data Friday, the final University of Michigan Consumer Sentiment index for January rose to 56.0, topping the Briefing.com consensus of 54.0 and the preliminary reading of 54.0. The headline is improved but still weak versus 71.7 a year ago.

Major indexes ended mixed Friday. The tech-heavy Nasdaq managed a slight gain and the S&P 500 ended the week well above Tuesday's lows of under 6,800. Buy-the-dip sentiment appears resilient and volatility fell.

"Although the VIX has pulled back from 20 to 15 over the past four days, I’m not convinced that we are done with volatility," Schwab's Peterson said Friday, referring to the Cboe Volatility Index.

Seven of 11 S&P 500 sectors rose Friday, led by materials, consumer staples and energy. The energy sector got help from rising oil prices amid growing tension over Iran after President Trump said he had sent warships to the region.

Checking individual market movers Friday, shares of Intel tumbled 17% on disappointing guidance. Intel said it's navigating industry-wide supply shortages it expects to bottom out in the first quarter. Several analysts raised their price targets on Intel after its earnings, saying the supply bottleneck appears temporary but could dilute gross margin. Also, shares rose to four-year highs just before the earnings report.

Nvidia rose 1.6% Friday following a Bloomberg report that China's government advised tech firms there to prepare orders for Nvidia's H200 chip.

Some of the other mega-cap stocks also did well Friday ahead of a host of earnings this week and next. Microsoft vaulted 3%, while Amazon and Meta Platforms also posted solid sessions to end the week. However, Tesla and Apple, which both report this week, fell Friday.

Financial stocks performed poorly Friday, sending the KBW Bank Index to 2% losses by late in the session. Disappointing earnings from Capital One were one potential source of weakness, while selling of regional bank stocks hurt the Russell 2000 small-cap index, which is heavily weighted toward smaller banks.

Capital One fell 7.5% Friday after the company missed Wall Street's earnings per share estimates.

Energy stocks rose across most sub-sectors of the group Friday, helped by the oil rally and ahead of the weekend winter storm, which was expected to raise demand for power. The front-month natural gas futures contract has risen nearly 45% so far this year, but longer-term futures contracts haven't risen as much, reflecting better-than-average supplies.

Spotify jumped almost 3% Friday after getting an upgrade to buy from Goldman Sachs, which sees a "more compelling risk/reward" scenario.

The Dow Jones Industrial Average® ($DJI) fell 285.30 points Friday (-0.58%) to 49,098.71; the S&P 500 index (SPX) added 2.26 points (+0.03%) to 6,915.61, and the Nasdaq Composite® ($COMP) rose 65.22 points (+0.28%) to 23,501.24.

For the week, the $DJI fell 0.53%, the SPX fell 0.35%, and the Nasdaq dropped 0.06%.