Weekly Market Commentary February 2, 2026

Week in Review

Economic data released last week suggested mixed growth, with strengthening activity signals contrasting sharply with weaker consumer confidence, persistent producer level inflation, and a Fed meeting that underscored a steady policy stance amid ongoing economic uncertainty.

Durable goods orders for November rose 5.3% month-over-month, reflecting a rebound that was heavily influenced by transportation, with orders excluding transportation rising by 0.5% month-over-month. In summary, overall orders rose from the prior month; however, this improvement was largely driven by transportation while other categories were mixed.

In addition, consumer sentiment weakened materially. The Consumer Confidence Index fell to 84.5 in January from 94.2 in December. This suggests households are becoming more cautious, though the survey still reflected ongoing spending capacity for some consumers. Going forward, consumer attitudes may remain sensitive to incoming economic headlines.

The focal point of the week was the January Federal Open Market Committee (FOMC) decision and statement. The Fed held the target range for the federal funds rate at 3.50% to 3.75%. Their statement noted economic activity expanding at a solid pace, while job gains remained low. They highlighted that the unemployment rate is showing some signs of stability, with inflation remaining somewhat elevated. Going forward, the committee is emphasizing data dependence and balancing risks rather than signaling a shift in the policy path.

Late week inflation indicators added further context. Core producer prices in the United States, which exclude food and energy, jumped by 0.7% from the previous month in December 2025, the sharpest increase in five months, and firmly above market expectations of a softer 0.2% increase. Final demand prices for goods, less food and energy, were 0.4% higher, while those for services surged by 0.7%. This suggests that producer-level inflation could remain persistent if services margins continue to run high.

The final major headline of the week was the administration’s announcement that President Trump will nominate Kevin Warsh as the next Fed chair. Looking ahead, investors will increasingly focus on the confirmation process and how leadership transition risk interacts with incoming data.

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