Good Morning Investors!!! Markets finally took a breath after the latest tariff jitters cooled, but today’s main mood-setter is inflation. At 10:00 AM ET we get the Personal Consumption Expenditures (PCE) (Fed’s preferred inflation gauge), which can swing bond yields and stocks fast if it lands above or below what traders expect. We are also watching jobless claims for a quick read on the labor market, plus a Supreme Court moment tied to Federal Reserve (Fed) (U.S. central bank) independence. On the stock side, retail is in “deal season” mode, and GE Aerospace just gave a fresh read on travel demand and engine service profits.
Key Market DriversTariff scare cools: U.S. stocks bounced at Wednesday’s close after Tuesday’s ugly drop. The mood flipped when President Trump said he would skip new tariffs (taxes on imports) on several European allies tied to Greenland talks. The S&P 500 rose about 1.2%. Trade policy matters because tariffs can raise costs for companies and push prices up for buyers. When the rules feel shaky, firms may wait on big orders and hiring, and markets hate waiting. The takeaway is simple: headlines can jolt prices, but your long-term plan should not flinch. 
S&P 500 – 1 Year Price Chart – Jan 22, 2026
Inflation test ahead: U.S. Treasury yields eased after a jump this week. The next test is inflation, with the PCE Price Index (the Fed’s preferred inflation gauge) due at 10:00 AM ET today in the Personal Income and Outlays report. The Federal Reserve (Fed – the US central bank) leans on PCE when it sets rates. Rates matter because they set the “cost of money” across the economy. Higher yields can tug on stock prices, since future profits look smaller when you discount them at a higher rate. If PCE runs hot, hopes for quick rate cuts could fade. Fed independence in court: The Supreme Court heard arguments on President Trump’s attempt to remove Fed Governor Lisa Cook. Several justices raised doubts about steps that could weaken the Fed’s independence from politics. Markets care because an independent central bank can fight inflation, even when that choice is unpopular. Gold is a classic “storm shelter” asset when policy trust wobbles. It dipped Thursday, but it was still near a fresh record after topping about $4,887 an ounce on Wednesday. Spot gold eased Thursday morning to around $4,800 an ounce after hitting a record near $4,888 on Wednesday. Global markets lift: Asia and Europe mostly followed Wall Street higher overnight. South Korea’s Korea Composite Stock Price Index (KOSPI – South Korea’s main stock index) pushed above 5,000, and European stocks were up about 1% early Thursday. Less trade fear can flip the mood fast. Japan is in the mix because the Bank of Japan (BOJ – Japan’s central bank) is meeting and may hint at rate hikes. When Japan’s rates move, the yen and global bond yields can swing, and U.S. stocks often feel it. |
Thoughts from InvestorsGrow:
The main event is the 10:00 AM ET inflation number. The PCE report is a big input for how investors think about the next move from the Federal Reserve (the U.S. central bank sets short-term rates). Economists expect core PCE (inflation minus food and energy) to be around 0.2% month over month and about 2.8% year over year for November, which is still above the Fed’s 2% goal. If it comes in hot, bond yields (the interest rate you earn on bonds) can jump, and stocks can get grumpy fast.
One twist: this is a combined October and November release, and parts of October have some data “patchwork” thanks to the shutdown mess. So traders may treat it like a good clue, not a perfect truth serum. In plain terms, if the number is close to what folks expect, the market may move on to earnings and Friday’s growth reads pretty quickly.
Friday (S&P Global Flash Purchasing Managers’ Index (PMI)) is your “how’s the vibe?” check. The flash PMI is like a quick speedometer for the economy. (PMI: A survey score where 50 is the line between growth and shrink.) A stronger PMI can calm recession fears, but it can also keep rate-cut hopes on a shorter leash. Then Michigan sentiment tells you if shoppers feel ready to spend or if they are clutching their wallets like it is a scary movie.
Retail and E-commerce
Retail is the business of getting stuff from a shelf (or a box) into your hands. It matters now because the U.S. shopper is still spending, but they are also deal-hunting like it is a sport. One easy way to track the group is the SPDR S&P Retail exchange-traded fund (XRT). XRT is up about 0.7% over the last five sessions through Wednesday’s close.
The big story is sales versus profits. U.S. retail sales rose 0.6% in November, while online retail store sales increased 0.4%, and many shoppers are still price-aware, so stores use more promos, which can squeeze gross margin (sales minus product cost). If shipping costs rise or tariffs return, some of that bill can land on the customer.
Costco Wholesale (COST):
Costco sells a smaller set of items in bulk, mostly through paid memberships. That fee income helps it keep prices low while still making money, which can pull in shoppers when budgets feel tight. Costco recently said Q1 fiscal 2026 net sales rose 8.2% to about $66.0B.
Target (TGT):
Target blends essentials with fun “treat yourself” buys, and it leans hard on owned brands to stand out. Its stores also work like mini-fulfillment hubs, which helps with fast pickup and delivery. The watch-out is that heavy discounts can lift traffic but trim profits, and Target has been investing to keep value shoppers from wandering off.
Walmart (WMT):
Walmart is the biggest U.S. retailer, selling groceries and everyday goods in stores and online. What makes it stand out is scale, since it can often keep prices low and still move a huge amount of product. It also has a big grocery mix, which brings shoppers in more often than most rivals. The timely watch is guidance on how shoppers are acting, because Walmart can gain share in “tight budget” times, but heavier price cuts can pinch profit.
InvestorsGrow Takeaway:
Retail stocks often move on two simple things: traffic and margin. A store can sell more stuff, but if it has to cut prices a lot, profits can still drop. Watch comparable sales (sales growth at stores open at least a year) plus any talk about promos, shipping costs, and inventory levels. If shoppers trade down to cheaper goods, value-focused chains can shine, while higher-end sellers may need more discounts to keep carts full.
GE Aerospace (GE)
GE Aerospace (GE) makes jet engines, which are basically the “heart” of a plane. It also sells the parts and services that keep those engines running, year after year. (Term: Aftermarket means parts and service after the first sale.) That service work can be a steady moneymaker, since planes do not get to “skip leg day.”
Early Thursday, GE posted fourth-quarter results and laid out its plan for 2026. The company pointed to strong demand for repairs and spare parts, helped by tight supply of new aircraft. Shares were up about 4% in premarket trading.
This matters beyond one stock because it is a window into the travel machine. When airlines cannot get enough new planes, they tend to fly the ones they have for longer. That means more maintenance visits, more parts orders, and more revenue for engine makers. It also hints that flight demand is still holding up, since engines earn more when planes rack up more hours.
GE expects adjusted earnings per share (EPS) (profit per share) of $7.10 to $7.40 in 2026. Wall Street was looking for about $7.11, so the range starts right on the bar and can clear it. Next, watch for any airline pushback on repair prices, plus updates on engine shortages or reliability issues.
InvestorsGrow Takeaway:
GE Aerospace is a “keep the fleet running” story, not just a “sell new engines” story. The green flag is that service demand tends to be sticky when planes are in the air a lot and new deliveries are tight. The red flags are a drop in travel, surprise engine fixes, or pricing fights that squeeze profits. Educational only, not investment advice.
