Strong earnings continue to support Wall Street even as 100% tariff threats and rising geopolitical risks push the 2026 market into a new phase of volatility.
Wall Street entered the final week of January 2026 with a mixed message: earnings are holding the market up, politics is trying to cut it down. On January 26, the S&P 500 closed 0.50% higher at 6,950.23, the Dow Jones gained 0.64% to 49,412.40, and the Nasdaq Composite added 0.43% to 23,601.36, supported by Apple, Meta, and Microsoft ahead of their earnings releases.
Yet during the same weekend, President Trump threatened 100% tariffs on all imports into the United States, reminding investors that 2026 will not be driven only by earnings, but also by concentrated political risk.
This tension between fundamentals and macro risk is not new. In a recent Zemeghub article, Strong Earnings Lift U.S. Stocks Despite Trade Risks and Shutdown Fears, the editorial team noted how “strong earnings helped U.S. markets rise above trade tensions and shutdown fears,” showing a market capable of climbing despite tariffs and government‑shutdown threats. But the backdrop now is heavier. According to Morgan Stanley, 2026 could become a true “high‑wire act” for markets: earnings expectations remain high, with growth projected to be almost double 2025 levels for stocks outside the “Magnificent 7,” but the margin for error is “razor‑thin,” while political and geopolitical risks continue to rise.
Globally, 2025 already set the bar high: the S&P Global Ex‑US BMI gained more than 28%, outperforming the roughly 16% return of both the S&P 500 and the S&P United States BMI. For 2026, firms like Markets.com still see room for upside: analysts speak of an S&P 500 potentially heading toward 7,500, driven by strong earnings and continued leadership from tech and AI, while acknowledging that short‑term volatility is being fueled by uncertainty over interest rates and trade tensions.
In this context, the January 26 session is not just another rebound: it is a snapshot of a market that continues to reward earnings, yet lives under the constant threat of political shocks—tariffs, elections, trade wars, fiscal crises. Any new statement from Washington or other capitals can turn a +0.5% day into a –2% slide within hours.
For long‑term investors, the message is twofold: earnings remain the primary engine of the rally, but 2026 will be a year in which political narrative may weigh as much as a quarterly report.
Source: Zemeghub — Strong Earnings Lift U.S. Stocks Despite Trade Risks and Shutdown Fears (January 26, 2026).