As 2026 began, U.S. equities delivered modest gains in January despite some volatility and profit-taking toward month-end, building on the strong momentum from 2025. The S&P 500 closed up about 1.35% for the month and YTD, supported by resilient corporate earnings and continued interest in technology and AI themes. The Nasdaq Composite posted a 0.94% gain, and the Dow Jones Industrial Average advanced 1.70% for the month and YTD. The Federal Reserve held steady, maintaining the federal funds rate in the 3.5%–3.75% range as policymakers balanced cooling inflation with a resilient economy. Treasury yields remained stable and the 30-year fixed mortgage rates came in at around 6.10%. Diversified retirement portfolios should continue to thrive in this environment.

Looking ahead, we believe 2026 is poised to become a record-setting year, if invested properly and strategically. A shift toward increased imports supporting domestic production (rather than America’s outsourcing of the past) is gaining traction through ongoing reshoring trends in manufacturing and supply chains, which could boost U.S. job creation, wage growth, and economic activity in key sectors. Coupled with expectations for considerable decreases in interest rates over the coming months (as the Fed continues to navigate moderating inflation and a solid economic backdrop) this setup should ease borrowing costs further, stimulating consumer spending, housing activity, and business investment. These tailwinds, alongside resilient corporate earnings and innovation-driven themes, underpin our optimistic outlook. With a thoughtful portfolio allocation that balances growth opportunities and income stability while prioritizing prudent risk management, middle-class investors stand to capture meaningful wealth-building potential in what could be a standout year overall.

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— Shasha Tax & Retirement