Market Outlook for the 1st Full Trading Week of 2026

Happy New Year and Good fresh-morning friends. We’re stepping into the first full trading week of 2026 with a market that’s optimistic on the surface but carrying a lot of tension underneath. 

Market Tone 

Sentiment is cautiously constructive. AI momentum is still a tailwind, global markets are showing signs of life, and investors remain positioned for lower rates. But this week is packed with catalysts, and the market is hypersensitive to every data point. 

What’s Driving the Tape 

1. Jobs Report on Friday — the main event.

This is the first meaningful read on the labor market since December. If the data softens, rate‑cut expectations strengthen. If it stabilizes, the market may need to reprice. 

2. Heavy macro calendar.

ISM, PMI, labor data, and Fed communication all hit early in the week. Expect choppy intraday action. 

3. Geopolitical noise.

Rising U.S.–Venezuela tension is on the radar and could influence risk appetite. 

4. Early earnings trickle in.

Not enough to set the tone for the quarter, but enough to move individual names and sentiment. 

What to Expect 

The base case is a volatile but slightly upward‑leaning week. Dips may get bought, but conviction is low until Friday’s data confirms the trend. 

A soft jobs print could ignite a risk‑on move, especially in small‑caps and cyclicals. 

A firm print could cool the rally and push yields higher. 

Bottom Line 

This week is all about data, direction, and discipline. The market wants to believe in a soft landing — but the labor market will decide whether that story holds 

This year-2026 could be "EPIC!" At MyCompass Trading, our goal is to help you prepare, embrace and navigate when the opportunities present. We’ll continue breaking down the data, highlighting the setups that matter, and giving you the tools to trade with confidence as we welcome the new year with new opportunities. 

Here’s to a strong start in 2026. 

Talk soon,

The MyCompass Trading Team