Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) rose on Monday, with the former securing a new record-high close of $691.81.
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The S&P 500 (SPX) has returned 0.97% during the first three trading days of 2026, aligning with the “January Effect,” which is the belief that stocks tend to perform well during the month. January is the fourth-best month of the year for the index, with positive returns 62% of the time and an average gain of 1.2% since 1928, according to Bank of America. Factors supporting this pattern include employees using year-end bonuses to invest in stocks and investors buying back shares after tax-loss harvesting losing positions during the fourth quarter.
The market could be in for significant news this Friday, as justices of the Supreme Court are set to return from a four-week break for opinion day at 10 a.m. Eastern Time. That could see the nation’s highest court announce its decision on the legality of the Trump administration’s tariffs, although the court doesn’t provide notice of what decisions it will announce in advance. On prediction platform Polymarket, the odds of SCOTUS ruling in favor of Trump’s tariffs sit at a slim 23% and have fallen by 8% during the past week.
The ouster of Venezuelan President Nicolás Maduro and a renewed interest from President Trump in annexing Greenland have raised geopolitical tensions this week, supporting safe-haven precious metals like gold (XAUUSD) and silver (XAGUSD). On Tuesday, a group of European leaders issued a joint statement firmly opposing Trump’s stance.
“The Kingdom of Denmark – including Greenland – is part of NATO,” read the statement. “Security in the Arctic must therefore be achieved collectively, in conjunction with NATO allies including the United States, by upholding the principles of the UN Charter, including sovereignty, territorial integrity and the inviolability of borders.”
Looking ahead, the Fed has scheduled its first 2026 Federal Open Market Committee (FOMC) meeting for January 28, where it is expected to hold rates steady. Fed Governor Stephen Miran, who has dissented at the last few FOMC meetings in favor of a 50 bps rate cut, voiced his support for rates to come down by over 1% by year-end.
“I think policy is clearly restrictive and holding the economy back,” Miran told Fox Business. “I think that well over 100 basis points of cuts are going to be justified this year.” Miran added that a low hiring rate and a cooling labor market are reasons to support lower rates.
The S&P 500 (SPX) closed with a 0.62% gain, while the Nasdaq 100 (NDX) returned 0.89%.
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