Title: Three Markets to Watch Next Week – 02.01.2026
Source: Originally published by XTB Market Analysis Team
Credit: XTB.com
As global financial markets continue to respond to macroeconomic data, central bank decisions, and geopolitical developments, investors will find significant trading opportunities in the first full week of 2026. Volatility in equities, foreign exchange, and commodities is expected to rise as several high-impact economic reports are due for release. Here are three key markets that traders and investors should watch closely.
1. US Dollar Index (DXY)
The US Dollar Index serves as the key benchmark for measuring the strength of the US dollar against a basket of six major currencies. After ending 2025 in a volatile fashion, the dollar’s direction in the early days of 2026 will be guided largely by US macroeconomic data, Federal Reserve policy expectations, and broader risk sentiment.
Key Factors to Monitor:
– US Nonfarm Payrolls (Friday, January 2):
The first major data release of 2026 is the US Jobs Report, with December 2025 payroll data to be published on Friday. The labor market has remained relatively resilient despite tighter monetary policy, but cooling inflation and slower wage growth could temper the Fed’s hawkish bias.
– Market expectations: Around 170,000 new jobs added in December
– Unemployment rate expected to hold at 3.9 percent
– Average hourly earnings growth will also be critical in gauging inflationary pressure
– FOMC Meeting Minutes (Wednesday, January 7):
Investors will review the minutes from the December 2025 FOMC meeting to gain insight into the Federal Reserve’s deliberations. While the Fed left rates unchanged at its last meeting, several officials hinted that rates could stay higher for longer. The minutes may provide clarity about:
– Inflation expectations for early 2026
– Timing and scale of potential rate cuts in H2 2026
– Balance sheet normalization pace
– ISM Manufacturing and Services PMIs (Tuesday and Thursday):
Key indicators of the health of the US economy will be released via the Institute for Supply Management reports.
– A reading above 50 indicates expansion, below indicates contraction
– If both sectors continue to slow, it would suggest softening demand, possibly supporting a dovish shift from the Fed
Current Technical Outlook for DXY:
– The dollar index recently bounced off the 102 support zone, maintaining its bullish medium-term structure
– A breakout above resistance at 104.50 could open the door to another test of 106
– Downside risks include weaker-than-expected payrolls and dovish Fed signals
2. S&P 500 Index (US500)
Equity markets ended 2025 with impressive gains, driven by optimism around a soft economic landing, easing inflation, and the possibility of rate cuts in the second half of 2026. The S&P 500 climbed to record highs last December, closing in on psychological resistance at 5,000 points.
Key Factors to Watch:
– US Earnings Season Begins (Week of January 5):
The Q4 2025 earnings season kicks off next week with several major financial institutions set to report. Investors will analyze whether strong earnings can justify the recent rally. Key themes to monitor include:
– Profit margins and cost controls amidst slowing revenue growth
– Outlook for consumer demand in Q1 2026
– Reaction to higher interest costs and refinancing impact on corporate debt
– Mega-Cap Tech Stocks:
After a stellar run in 2025, tech stocks will once again be in focus, particularly companies within AI, semiconductors, and cloud computing.
– Apple, Nvidia, and Amazon are expected to issue updates to their guidance for 2026
– Any guidance downgrade or cautious tone could lead to increased volatility
Read more on EUR/USD trading.