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  • Market Recap: January 2026

    Month in Review

    • Diversification was the name of the game in January, with value stocks, small cap stocks, and international stocks leading markets higher, as the S&P 500 finished January up +1.45% (S&P 500 TR Index)
    • Weakness in Technology stocks continued for the second straight month, causing the large cap growth stock index to fall -1.51% in January (Russell 1000 Growth TR Index). In contrast, large cap value stocks started 2026 strongly, with the Russell 1000 Value TR Index rising +4.56% in January.
    • Small caps and international stocks continued their strength as well, with the small caps rising +5.35% (Russell 2000 TR Index) and international stocks rising +5.98% (MSCI ACWI Ex-USA NR USD Index) in January.
    • Bond markets were nearly unchanged during the month (+0.11%, Bloomberg Barclays US Aggregate Bond TR Index), as investors balanced the steady decline in inflation with the nomination of a new Federal Reserve leader.

    US Dollar Continues to Weaken

    The US dollar continued to decline versus major currencies in 2026, falling roughly -2% in January. The decline in 2026 follows-up a decline of 9.4% in 2025, which was the worst calendar year for the dollar since 2017. There are many potential causes to the decline over the past 13 months, such as: changes in interest rates, starting valuation of the dollar, and changes to the fiscal outlook for the United States. The decline also has tangible impact on stock and bond markets, particularly coming off of a bull market for the dollar that lasted from March 2008 to September 2022.

    For stock markets globally, the effect of the decline is two-fold. For US-based companies, especially large cap stocks in indices such as the S&P 500, a weakening dollar does boost earnings growth for these companies (unlike the US economy, S&P 500 Index generates 30% of sales from overseas).

    For international equity markets, it has been a boon for US-based investors. US-based investors owning international stocks have three sources of return: share price + dividend yield + currency impact. The depreciation of the dollar added almost 8% to the return of the international stock market for US-based investors in 2025 (+32.39% in 2025, MSCI ACWI Ex-USA NR USD Index). This continued in January with a roughly 1.4% boost via currency (+5.98% in January, MSCI ACWI Ex-USA NR USD Index). Continued weakening of the US dollar could be a positive factor for US investors that own international stocks. For commodities and currency alternatives, dollar weakness has been a mixed bag: gold shined (+9.31% in January, S&P GSCI Gold Spot Index), while Bitcoin struggled (-4.29% in January, S&P Bitcoin USD).

    Source: Bloomberg, FactSet, J.P. Morgan Asset Management; Currencies in the DXY Index are: British pound, Canadian dollar, euro, Japanese yen, Swedish krona and Swiss franc.

    What’s on Deck for February?

    • Earnings seasons covering the fourth quarter of 2025 continues in February, with the majority of the Index’s market capitalization reporting in late January and early February. AI-related investment and consumer strength will be the key themes watched by investors.
    • The Federal Reserve Open Market Committee (FOMC) held interest rates constant in January. Kevin Warsh was nominated to serve as the next Chairman of the Federal Reserve – he will begin the confirmation process.

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    William Winkeler

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  • November 2025 Market Recap | Confluence Financial Partners

    A review of November’s markets, including AI hyperscaler volatility, bond trends, and what to watch at the December Fed meeting.

    November 2025 Market in Review: AI investment, Bond Performance, and Equity Markets

    Month in Review

    • The shifting economic outlook and renewed attention to the magnitude of artificial intelligence (AI) investment made for a volatile month for equity markets.
    • US large caps managed to finish the month slightly in “the black” (S&P 500 TR Index; +0.25% in November), despite Technology stocks falling -4.3% during November (S&P 500 Information Technology Sector Index).
    • The weakness in Technology stocks weighed on large cap growth stocks, which fell -1.81% during the month (Russell 1000 Growth TR Index), while large cap value stocks rose +2.66% in November (Russell 1000 Value TR Index).
    • The shifting interest rate outlook was a tailwind to major bond markets, with the Bloomberg Barclays Aggregate Bond TR Index rising +0.62% during the month, taking 2025 returns to +7.46%.  

    AI Hyperscalers Pullback

    AI-related companies, including the so-called AI-“Hyperscalers”, sparked an increase in volatility and a pullback of -5% at one point for US large cap stocks in November. While pullbacks of this magnitude are very common, investors appear to be paying close attention to the rapid increase, and shifting make-up, of the capital expenditures on artificial intelligence technologies.

    Magnificent 7 stocks, and particularly the smaller sub-set of Hyperscalers, are broadly defined as the market leaders in AI investment technologies. They have also powered the S&P 500 Index higher, as they become an increasingly large percentage of the index. To-date, these companies have had above-market earnings growth and reached an expected $500bn of capital expenditures in the next 12-months, having previously done so without significant use of debt and borrowing. That changed starting in September.

    Since September, the Hyperscalers have issued nearly $90 billion of investment-grade bonds, more than they had sold over the previous 40 months. Investors are watching the shift from cash-flow funded to debt funded capital expenditures closely. It is important to note that earnings for these companies have largely kept up with share prices to-date; a difference from 1999-2000 when share prices rose rapidly ahead of earnings growth. However, given the highest concentration in over 50-years in the S&P 500 Index, investors continue to watch developments in artificial intelligence closely.

    What’s on Deck for December?

    • The Federal Reserve Open Market Committee (FOMC) meets December 9-10 where they will announce any changes to policy. At time of writing, financial markets are pricing a roughly 85% chance of a 0.25% interest rate cut.  
    • Investors continue to digest economic data following the end of the government shutdown. Some data releases over that period will not be released on a permanent basis.

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    William Winkeler

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  • Confluence Financial Partners Featured on Public Television Documentary “All Access with Andy Garcia”

    I’m thrilled to share that Confluence Financial Partners has been featured in the public television documentary All Access with Andy Garcia. This segment highlights how we provide wealth management in Pittsburgh and across surrounding areas, helping clients plan for the future and build a lasting legacy.

    All Access with Andy Garcia is a program that shines a spotlight on innovative companies and the impact they make across various industries. The show provides a behind-the-scenes look at how organizations operate and create meaningful change.

    In our segment, viewers will see how our wealth management services in Pittsburgh and beyond help clients balance living well today with preparing for tomorrow. From personalized financial planning to strategic investing and our commitment to providing high-quality service, our team helps to ensure each client’s portfolio reflects their unique goals and dreams. The segment also demonstrates our fiduciary commitment to act in every client’s best interest, helping demystify financial planning and showing how thoughtful guidance can enhance quality of life.

    At Confluence, our goal is to help clients gain clarity and confidence in their financial lives while planning for the future they envision. Partnering with All Access with Andy Garcia gave us the opportunity to share how strategic planning, personalized guidance, and a focus on each client’s unique goals can create meaningful impact, both today and tomorrow.

    Watch the Segment
    The segment will be broadcast to public television affiliates starting mid-November 2025, with multiple airings across stations nationwide. I invite you to watch the Confluence segment and learn more about our approach to wealth management in Pittsburgh and beyond by visiting the All Access page.

    watch and learn more

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    Greg Weimer

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