The week of January 12-16, 2026 marked a volatile, risk-off period for US markets driven by escalating geopolitical tensions and concerns over Federal Reserve independence. Major equity indexes retreated from record highs, with the S&P 500 -0.36%, Nasdaq -0.66% and Dow Jones -0.28%.
The main catalyst for market volatility was Trump's announcement of more tariffs on European countries if no deal is reached regarding Greenland's purchase, increasing geopolitical tensions. Additional market pressures came from the current situation in Iran, uncertainty about Fed independence, and mixed economic signals including a soft labor market alongside wholesale inflation.
Gold and silver surged to record highs as investors fled to safe-haven assets. The 10-year US Treasury yield increased 5bps to 4.22% led by higher inflation, but the market still prices in at least two 25 basis point Fed cuts for 2026. Oil prices experienced sharp volatility, finishing the week stable, after Trump's comments about not attacking Iran.
