Weekly Chartstopper: January 16, 2026

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this week

Geopolitics were front and center this week, so economic data was (obviously) overshadowed. But it was quite a good week in terms of data:

Both headline CPI (2.7% y-o-y) and core CPI (2.6% y-o-y) were unchanged in December as tariff-related inflation slowed, with the contribution of core commodities unchanged from November and slightly below their recent highs in August and September.
Retail sales (+0.6% m/m) rose again in November due to broad-based gains.

Manufacturing output in December increased by more than expected (+0.2% m/m) (-0.1%).

Steady inflation and resilient spending and output data meant market expectations for a Fed rate cut this year fell to 45 basis points (bps) from about 60 a week ago.

Elsewhere this week, fourth-quarter earnings season kicked off with the big banks, but the biggest news came from TSMC, which announced plans to increase capital spending by 37% this year and “significantly increase capacity” in 2028-29 given AI demand.

So, the net result of geopolitical events dampens expectations of a Fed rate cut, but positive signs for AI demand stem from a 1% decline for the Nasdaq-100® this week (blue line), and a nearly 5bp rise in 10-year Treasury yields above 4.2% (black line).