The week has started with high market volatility, and more turbulence is expected over the next five trading days. Markets are reacting to tariff threats from US President Trump, the possibility of a US government shutdown, and ongoing geopolitical tensions.
The Federal Reserve meeting and rate decision, along with new inflation data, are likely to add to the market swings. The Kobeissi Letter warned of significant volatility this week.
Key Events from January 26 to 30
Over the weekend, Trump threatened 100% tariffs on Canada if it proceeded with a deal with China, but Canadian Prime Minister Mark Carney said Canada has no plans for such an agreement, easing some investor concerns.
There is growing concern that the US government could face a partial shutdown as Senate Democrats oppose a funding package. Government funding expires at the end of the week, with Republicans pushing to avoid another shutdown, according to sources cited by CNBC.
Economic releases include the US Consumer Confidence report on Tuesday, the Fed interest rate decision on Wednesday, and December’s Producer Price Index (PPI) data on Friday, which tracks changes in prices received by domestic producers for goods and services.
Corporate earnings will also influence markets, with four of the “Magnificent 7” reporting this week. Microsoft, Meta, and Tesla report on Wednesday, while Apple reports on Thursday. Stock futures were already declining on Monday, hinting at a turbulent week ahead.
Crypto Market Outlook
Crypto markets opened the week deep in the red. Total market capitalization dropped 1.8% to $3 trillion on Monday morning.
Bitcoin led the decline, falling to $86,000, its lowest in five weeks, before slightly rebounding to $87,700. The asset is approaching key support levels that, if broken, could signal a broader bear market.
Ether also weakened, dipping below $2,800 with minimal recovery. Most altcoins followed suit, resulting in widespread losses across the market.
