Postponed Supreme Court Tariff Decision, Geopolitics, Lackluster Earnings, Spark Risk-Off Winds: Jan. 14, 2026

Mounting geopolitical uncertainty, a postponed Supreme Court decision on tariffs and lackluster earnings results from big banks are blowing risk-off winds throughout Wall Street today. Stocks are poised to suffer losses for two consecutive sessions for the first time this year as investors clamor for safe-haven holdings against the backdrop of a low-impact economic calendar featuring stale PPI and retail sales data from November and a timely read on housing transactions for December. Participants are indeed guiding their decisions from profitability reports and international developments and are responding by reaching for Treasuries with a long-end, bull flattener bias while doing some aggressive commodity buying, as copper, gold and silver reach fresh records. Meanwhile, crude oil is trading at its loftiest price of 2026 on worries that supplies could be disturbed due to tensions in Tehran. Despite the three major domestic benchmarks sharply lower though, there’s interest in shares in the defensive consumer staples, utilities and health care sectors in light of their relatively stable characteristics. And in the cyclical space, energy, materials are appreciating on widening margin profiles driven by heavier selling costs while real estate is climbing in response to lighter mortgage rates amidst a huge beat on existing home closings which featured the fourth consecutive increase, sending the headline figure to a 34-month high. Additionally, volatility protection instruments and put options are seeing pricier premiums as traders rapidly add hedges to portfolios. Folks are also gravitating to alternatives like cryptocurrencies and forecast contracts with Bitcoin and Ethereum and “Yes/No” trades catching bids while subdued yields weigh on the greenback.  

Existing Homes Sales Highest Since Feb. 2023

Decelerating prices combined with lighter interest costs generated a huge beat in existing home sales for December. The fourth consecutive report featuring an uptick saw the headline figure jump to its strongest pace in 34 months, or since February 2023. Indeed, the 4.35 million seasonally adjusted annualized units flew past expectations of 4.21 million and improved by 5.1% month over month (m/m) from November’s 4.14 million. The South, West and Northeast bolstered results with increases of 6.9%, 6.6% and 2% m/m, while the Midwest offset some of the progress, sliding 2% during the period. Single-family homes saw closings inch up 5.1% while the condominium/cooperative segment climbed a higher 5.3%. Meanwhile, factors that propelled transactions were values rising just 0.4% year over year (y/y) to a median level of $405,400, inventories increasing 3.5% y/y and subdued mortgage rates, which fell from 6.72% to 6.19% y/y.

Earnings, Geopolitics in Focus

With limited economic data remaining this week, investors will continue analyzing incoming earnings reports and watching international developments to gauge the appropriate amount of portfolio risk. So far, it appears Wall Street is placing a high bar on corporate America’s quarterly results and forward guidance based on the reactions in the first few days of the reporting season. Against the backdrop of elevated valuations and mounting geopolitical turbulence from multiple corners of the world, shareholders want to see stellar profitability and buoyant future expectations prior to accumulating more equity. And unfortunately for stock bulls, a potential rally following a Supreme Court decision to block President Trump’s tariffs expected today was postponed. The expected action, which ForecastEx participants price out at 70%, would raise the likelihood of significant fiscal stimulus reaching the economy while a greater chance of levy refunds would shore up balance sheets and bolster bottom lines in the short run. Conversely, however, it would weigh on onshoring ambitions and lift long-end Treasury yields on heavier term premiums driven by a worsening deficit.

International Roundup

China’s Trade Surplus Hits All-Time High

China’s annual trade surplus hit an all-time high of $1.19 trillion in 2025 and jumped 20% from the preceding year, a result of the country expanding into higher value manufacturing and improving relationships with buyers in Europe and Southeast Asia. In December, furthermore, exports climbed 6.6% y/y, exceeding the economist consensus prediction that shipments would increase only 3% and accelerating from the 5.9% gain in November.

Imports also strengthened. Shipments from foreign providers were 5.7% higher y/y after growing only 1.9% in the preceding month. Economists anticipated a 0.9% increase.

While US buyers slashed purchases by 20% in 2025, the following regions increased their Chinese imports by the stated amounts:

• Africa, 26%
• Southeast Asia, 13%
• European Union, 8.4%
• Latin America, 7.4%

Sentiment Among Japanese Manufacturers Weakens

The Reuters Tankan Index dropped from 10 in December to 7 with manufacturers’ sentiment falling, a reaction to weak orders from foreign markets. The oil and ceramics category declined the most, tanking 25 points to zero, while the steel sector slipped 11 points to minus 44. Confidence in the chemicals industry also weakened, sinking 5 points to plus 6. Separately, a gauge of services providers’ descended 1 point with the wholesaling and retailing classifications sinking 10 and 7 points. Some survey respondents observed a decline in tourists from China, a result of growing tensions between the two countries. Conversely, transport, information and real estate strengthened.

South Korea Unemployment Jumps 

South Korea’s unemployment rate spiked, climbing from 2.7% in November to 4% last month, according to the Ministry of Data and Statistics.It was the highest December reading in 25 years. During the month, 1,217,000 individuals were out of work, up by 103,000 from the year-ago period. The Ministry of Data and Statistics said the weakness in accommodation, foods services, manufacturing and construction contributed to the rise in joblessness, especially among younger individuals who tend to be employed in those sectors.

Australia Building Approvals Reverse from Earlier Decline

Approvals for proposed construction projects in Australia climbed 20.2% y/y and 15.2% m/m in November, matching the economist consensus estimates and reversing from October’s 1.1% y/y and 6.1% m/m contractions. Among approvals, private houses were 1.3% higher, which also matched estimates following a decline by the same amount in October.