Market snapshot: all eyes on US earnings season

Whether global stock markets continue their blistering start to 2026 very much depends on the strength of upcoming US corporate results. ii's head of markets has the latest.

12th January 2026 08:20

by Richard Hunter from interactive investor

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Markets on both sides of the pond picked up last year’s momentum to close at record closing highs last week, while the bristling geopolitical mood continued to drive haven assets such as gold to new heights.

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In the US, any concerns of a labour market meltdown were put to one side for the time being. While just 50,000 jobs were added in December as compared to expectations of 73,000, the unemployment rate drifted lower to 4.4%, against the 4.5% which had been forecast. The news was enough to settle investor nerves, and at the same time pushed back the likelihood of any further interest rate cuts from the Federal Reserve possibly until June.

The backdrop to the numbers suggests some resilience in what has been dubbed a “low-hire, low-fire” environment, with the general underlying strength of the economy still intact. The news was sufficient to send both the Dow Jones and the S&P500 to record closing highs, with these indices already having notched gains of 3% and 1.8% respectively this calendar year. The Nasdaq has also added 1.8% and is just 1.2% from its own record closing high set in October.

This week sees a busy calendar, including retail and wholesale inflation numbers, but perhaps most importantly the onset of the fourth-quarter and full-year reporting season. As is traditionally the case, the banks will be at the vanguard, with updates due from JPMorgan Chase & Co (NYSE:JPM), Citigroup Inc (NYSE:C), Wells Fargo & Co (NYSE:WFC), The Goldman Sachs Group Inc (NYSE:GS) and Morgan Stanley (NYSE:MS).

Quite apart from the read across to the UK banks in regard to deal making and trading activity, the numbers come against a backdrop of a Presidential proposal to cap credit card interest rates, prompting concerns that credit availability for consumers and small businesses could be compromised, let alone any follow on effect on banking profitability.

Meanwhile, growing unrest in Iran added to the increasing litany of geopolitical conflicts which, in an unfortunate sign of the times, have boosted both defence stocks as well as haven assets.

Indeed, the defence sector was one which helped propel gains for the FTSE100 last year, and the early indications are that this could well continue as the premier index ended the first full week of trading at a fresh closing high. The banking and resource sectors were also linchpins of the strength, highlighting the diverse nature of an index which has more recently risen from the ashes in global investment terms.

The further strength of commodities including gold lifted the mining sector in early trade Monday, although the FTSE100 failed to make progress given the headwinds of a broad markdown of blue chip names. Barclays (LSE:BARC) in particular was a notable loser, with its exposure to the US credit card market creating a dent in its recent strength following the White House announcement of potential interest rate caps.

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