Review & Preview: The Smaller the Better

Going Small. Corporate earnings offered some bright spots this week, but ultimately the start of fourth-quarter reporting season wasn’t enough to push stocks into positive territory. The major indexes slipped Friday, finishing the week in negative territory—with one exception.

The Dow Jones Industrial Average shed 83 points today and 145 points, or 0.3%, on the week. The S&P 500 and Nasdaq Composite finished the week down 0.4% and 0.7%, respectively. The small-cap Russell 2000 finished the week up 2%, though, and closed Friday at a record.

Small-cap stocks are taking share, so to speak. They continue to rally as investors rotate out of expensive, larger names.

My colleague Connor Smith notes: “The Russell 2000 beat the S&P 500 for an 11th day in a row, which is the longest such streak since June 6, 2008, according to Dow Jones Market Data.”

The small-cap rally is a broader call on the U.S. economy, writes Hardika Singh, economic strategist at Fundstrat:

Investors typically like to see small-caps rally because most of their money is made domestically, so gains there tend to reflect bets on a booming economy. That’s a good sign because over the past year, investors watched every single economic report with a clenched jaw for signs of a downturn that are yet to turn up.

Next week brings another chance for earnings to retake the narrative. Netflix will be the first high-profile tech company to report fourth-quarter earnings, with Intel later in the week. (More on that below.) Big Tech companies get started the following week. All that to say there’s plenty of news still to come in January, capped by a Federal Reserve policy meeting from Jan. 27 to 28.

-	Last	Chg%
↓ Dow Jones Industrial Average	+49,359.33	-0.17%
↓ S&P 500 Index	+6,940.01	-0.06%
↓ NASDAQ Composite Index	+23,515.39	-0.06%

1/16/2026, 8:00:21 PM ET

The Hot Stock: Super Micro Computer +10.9%
The Biggest Loser: Constellation Energy -9.8%

Best Sector: Real Estate +1.2%
Worst Sector: Healthcare -0.8%

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This Weekend’s Magazine

PHOTOGRAPH BY JAKE CHESSUM

The Calendar

Next week’s holiday-shortened trading kicks off with the World Economic Forum’s annual meeting in Davos, where at least 60 heads of states are expected including President Donald Trump.

Roughly 30 S&P 500 companies are set to report results this week. Netflix and United Airlines Holdings announce earnings on Tuesday, followed by Charles Schwab and Johnson & Johnson on Wednesday. GE Aerospace, Intel and Procter & Gamble release their results on Thursday.

The highlighted economic data release will be the Bureau of Economic Analysis’ personal consumption expenditures price index on Thursday. The BEA also releases its final estimate of GDP growth for the third quarter the same day. On Friday S&P Global releases both its Manufacturing and Services Purchasing Managers’ Indexes.

What We’re Reading Today

• Meta Triples Down on AI. It Could Be a Wild Ride for the Stock.

• Verizon’s Outage Rebates Could Total $650 Million. The Dividend Costs Far More.

• Mortgage Rates Fall to Lowest Level Since 2022. Agents Say Buyers Are Back.

• Berkshire Missed the Bank Rally. Few of Its Stocks Are Truly ‘Forever.’

• And this weekend’s Barron’s cover story: 30 Stocks to Buy in 2026, According to Our Roundtable Pros

Barron’s Live returns on Monday, Jan 26. Barron’s Live features timely and actionable insights for investors. We give you behind-the-scenes conversations with the newsroom, connecting you with our editors and reporters covering the markets, the economy, and more.