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The Supreme Court heard oral arguments in the case between Federal Reserve Governor Lisa Cook and President Donald Trump Wednesday.

Key Takeaways

• The Supreme Court sharply questioned a Trump Administration lawyer during a Wednesday hearing, expressing skepticism about whether the law allows Trump to fire Federal Reserve Governor Lisa Cook.
  
• Trump's attempted firing is viewed by some experts as part of a campaign to exert more control over the independent central bank and push it to sharply lower interest rates.
  
• Betting markets lowered the odds of Cook leaving office following the questioning.
  

President Donald Trump’s effort to remove a Federal Reserve governor faced scrutiny on Wednesday when Supreme Court justices questioned his authority to fire Governor Lisa Cook. 

The Supreme Court heard oral arguments on Wednesday morning in a lawsuit brought by the Trump administration. In it, the administration asked the court to allow the president to fire Cook from her spot on the independent central bank's governing board.

The White House is asking the court to overturn a lower court order allowing Cook to remain on the job while courts settle the Trump Administration's accusation that Cook falsified documents on a mortgage application before she was a Fed governor.

The case raises questions about the central bank's independence. The Fed was established by Congress to be outside the White House's direct control. Economists, former Fed chairs, and other experts have warned that greater White House control could lead to pressure to lower interest rates for political reasons.

In countries where the central bank lacks independence, studies have shown that politically motivated rate cuts boost the economy with easy money in the short run but damage it in the long run by stoking inflation.

Several justices seemed to grapple with whether the Fed could remain independent, as Congress intended, if the president could remove Fed governors simply by accusing them of misconduct.

“What goes around comes around,” Kavanaugh said while questioning Solicitor General John Sauer, who represented the administration. “All the current president’s appointees would likely be removed for cause on Jan. 20, 2029, if there’s a Democratic president on Jan. 20, 2029, and then we’re really at ‘at-will’ removal. So, what are we doing here?"

What This Means For The Economy

Should the Supreme Court rule in favor of Cook, it would bolster the Fed's ability to resist pressure from the White House to sharply lower interest rates.

Kavanaugh, who Trump appointed during his first term, said allowing the firing could "weaken if not shatter" the Fed's independence.

The law allows the president to remove a Fed official "for cause," and much of the hearing revolved around the legal meaning of those two words, and whether the accusations against Cook were enough "cause" to fire her if the accusations are true.

Federal Housing Finance Agency Director Bill Pulte sent Cook a letter in August, described as a "criminal referral," alleging she incorrectly identified a vacation home as a primary residence, potentially helping her secure a more favorable mortgage rate. Cook, through her lawyer, Abe Lowell, has denied any fraud, saying it was a simple paperwork error corrected in other documents.

Following the hearing, prediction markets reduced their expectations that Cook would be dismissed from her job. As of Wednesday, prediction site Kalshi was pricing in a 13% chance she would be removed before January 2027, down from around 30% last week.

Some critics have argued that the allegations against Cook are part of a broader push by the administration to exert greater control over the Fed and to sharply lower interest rates.

Trump's pressure campaign against the central bank has included broadsides in speeches and on social media. Most recently, the Justice Department opened an investigation into Fed Chair Jerome Powell over cost overruns in a headquarters renovation project.

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Software stocks have slumped this year on concerns about competitive threats from AI.

Key Takeaways

• Software stocks should rebound when Wall Street realizes they "hold the key" to unlocking AI's benefits, according to the founder of tech-focused private equity firm Thoma Bravo.
• The software industry has been hammered by concerns about AI's uncertain commercial potential, as well as fears that the nascent technology will upend established business models.

Anxious software investors worry that artificial intelligence is disrupting the multi-trillion dollar industry. One veteran tech investor says those concerns are misplaced.

Orlando Bravo, founder and managing partner of tech-focused private equity firm Thoma Bravo, on Wednesday called the narrative that AI is going to eat software “absolutely wrong,” in an interview with CNBC. The reason: They know what the companies and industries they serve need to succeed—and are still positioned to deliver it.

“The franchise value of most software companies is [their] deep domain knowledge,” Bravo said. That, he said, situates software companies at the intersection of AI capabilities and enterprise needs. 

“If you want to see wide adoption in the enterprise of AI, these are the companies that will do it," Bravo said. "These are the companies that hold the key.

Why This Is Important

Artificial intelligence hype has been the driving force behind stock market returns for more than 3 years. Investors have recently shunned software stocks in favor of industries with more concrete evidence that the AI boom is adding to the top and bottom lines.

The software industry has recently been dogged by concerns that incumbent software’s share of enterprise IT budgets will shrink as companies dedicate more resources to AI-native applications. Investors are also concerned that the industry’s profit margins will narrow as competition ramps up. 

Those concerns have created a chasm between the tech sector’s best and worst-performing stocks. The PHLX Semiconductor Index (SOX) is up about 12% this year—after rising 42% last year—while the iShares Expanded Tech-Software Sector ETF (IGV) is down more than 10%.

Shares of software giants Applovin (APP), Intuit (INTU), and ServiceNow (NOW) are all down about 20% so far this year, making them the S&P 500’s worst performers. Meanwhile, shares of flash memory device maker Sandisk (SNDK) have doubled in the past three weeks.  

Analysts expect spending on AI infrastructure will continue to lift semiconductor stocks this year. A shortage of memory and data storage hardware could sustain the momentum in stocks like Sandisk and Micron (MU), according to a recent Bank of America note. Evidence that tech giants will continue to spend aggressively on data center infrastructure could re-energize shares of Nvidia (NVDA) and its AI chip competitors like Broadcom (AVGO) and Advanced Micro Devices (AMD), according to the analysts. 

Software may have a tougher year ahead, but investors shouldn’t write the industry off entirely, according to Oppenheimer analysts. Investor sentiment toward software stocks could improve this year if AI initiatives across the economy boost the industry’s top line and backlog growth, or if software companies themselves demonstrate AI is boosting efficiency and improving margins, the analysts said. 

Bravo said he’s already seeing evidence AI is doing that. “Many of our companies just finished their year in December,” he said, “and we saw a big boom in the quarterly bookings of these companies, partly because of take off in AI.”

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The latest inflation data comes less than a week before the Fed meets to determine whether it should adjust its key interest rate.

Key Takeaways

• A key measure of inflation, the Personal Consumption Expenditures price index, likely rose 2.8% over the year in November, according to forecasts.
  
• The PCE inflation report was delayed by the government shutdown, so it's not as relevant to the Federal Reserve's monetary policy decisions as it normally would be.
  
• Tariffs have pushed up prices for many items, putting upward pressure on inflation, but a cooling housing market has kept a lid on overall inflation.
  

We're finally about to learn how much consumer prices rose back in the fall, according to the Federal Reserve's favorite measure of inflation.

A report Thursday from the Bureau of Economic Analysis will likely show core consumer prices excluding food and energy, as measured by the Personal Consumption Expenditures price index, rose 2.8% over the 12 months through November, according to a consensus estimate cited by Wells Fargo Securities.

That would be identical to the 2.8% annual inflation rate reported in September, the most recent PCE inflation report, and still well above the 2% annual rate that officials at the Federal Reserve aim for as a benchmark for acceptable inflation.

Fed officials look to core PCE as their north star for judging inflation when setting monetary policy, and their next meeting is January 27-28. However, Thursday’s report is likely to carry less weight than usual as officials decide whether to adjust the Fed’s key interest rate. The data being released for both October and November has been seriously delayed by last year's government shutdown. The BEA would normally release December data at this time in January.

"Given that recent inflation reports have been significantly impacted by data collection issues due to the federal government shutdown during October and the first half of November, Fed officials are likely to want to see several more months of data in order to get a clearer understanding of the underlying trends," Brett Ryan, senior U.S. economist at Deutsche Bank, wrote in a commentary.

What This Means For The Economy

The delayed release of the PCE inflation data from November means it will be less influential than usual on Federal Reserve interest rate policy.

Inflation has run higher than the Fed's goal since 2021, and while it has fallen sharply from its recent peak in 2022, it has resisted the Fed's attempts to wrestle it all the way down to 2%.

Some Fed officials have worried that tariffs are pushing inflation higher as merchants pass along the costs of President Donald Trump's import taxes to consumers. At the same time, a housing market slowdown has put a lid on rent increases, reducing a major component of inflation and preventing it from surging.

The Fed fights inflation by raising its influential fed funds rate, which affects borrowing costs on all kinds of loans. The Fed raised rates starting in 2022 and kept them at a higher-than-usual level for years. However, Fed officials have lowered the rate at each of the policy committee's last three meetings to boost the economy and help the faltering job market, despite fears that inflation could flare up again.

Amid those cross-currents, Fed officials have been keeping a close eye on inflation data. With PCE information delayed, central bankers may have to pay more attention to the other widely cited inflation measure, the Consumer Price Index. November's CPI showed inflation slowing down sharply that month, but was clouded by concerns that the data collection was distorted by the shutdown.

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Can gold deliver another year of outsize returns? Only time will tell

Key Takeaways

• Gold prices hit an all-time high of $4,888 per troy ounce on Wednesday before paring some of those gains.
• JPMorgan estimates that gold's share of total central banks' reserves rose to a new record at the end of last year.

There's nothing like a potential crisis to brighten the shine on gold.

Spot gold prices rallied to fresh highs on Wednesday, coming within dollars of $4,900 per ounce and leading investors and media to wonder when we might touch $5,000 for the first time. While U.S. stocks shook off Tuesday's scare as affairs involving U.S. President Donald Trump, his European counterparts, and Greenland seemed to cool—Liberation Day déjà vu still drove investors to assets that hedge geopolitical uncertainty.

Gold, which recently traded closer to $4,800, also cooled a bit as market tensions receded. Silver, another precious metal that has been strong lately, was also recently lower.

WHY THIS MATTERS TO INVESTORS

The dollar-debasement trade was back in the spotlight as gold rallied to a new record high. Investors often acquire gold as a hedge against economic turmoil, political uncertainty, and inflation.

A big question, meanwhile, remains whether gold and silver can deliver another year of outsize returns. Precious metals were among the best performing major asset classes of 2025, with silver taking the lead with a 146% gain for the year and gold near the top. If investors continue to increase their allocations to gold like central banks did last year, higher spot prices could still follow.

JPMorgan analyst Nikolaos Panigirtzoglou last year identified the so-called "debasement trade," where investors piled into assets viewed as hedges against their fears—persistently high government debt to geopolitical uncertainty—while panning the U.S. dollar.

Panigirtzoglou estimates that gold share of total central banks' reserves rose in the last three months of 2025. Assuming central bank purchases were on pace with the average for the first three quarters of the year, the safe haven asset's piece of the pie "may have risen to a new record high" near 30%, he said in a note last week.

And veteran investors from Bridgewater Associates' Ray Dalio to DoubleLine Capital's Jeff Gundlach have recently talked up the merits of having an allocation to gold.

Meanwhile, dollar reserves continued to see outflows, with the greenback's share in foreign exchange reserves sitting at the lowest levels in more than 25 years, according to the JPMorgan report.

Central banks' preference can be seen in the diverging performance of the U.S. dollar index and popular gold ETF SPDR Gold (GLD) over the past year. The former is down almost 9%, while the latter is up more than 75% over the same period.

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Losing Berkshire Hathaway's support could further chip away at investor interest in Kraft Heinz.

Key Takeaways

• Kraft Heinz shares fell Wednesday, after Berkshire Hathaway warned it could look to sell its stake.
• Warren Buffett, who stepped down as CEO of Berkshire at the end of the year, reportedly said he was "disappointed" in Kraft Heinz's planned split.

Warren Buffett was "disappointed" Kraft Heinz (KHC) planned to split into two. His successor as Berkshire Hathaway CEO may exit the stock entirely.

Kraft Heinz shares were down 6% in afternoon trading Wednesday, a day after the food giant revealed in a regulatory filing that Berkshire Hathaway (BRK.A, BRK.B) may sell "up to an aggregate of 325,442,152 shares of the Company’s common stock." Berkshire did not respond to a request for comment in time for publication.

Berkshire had lowered the book value of its Kraft Heinz stake by about $3.8 billion after taxes in the second quarter, and owned 27.5% of the company's outstanding common stock as of Sept. 30, 2025. Buffett, who stepped down as CEO of the conglomerate at the end of the year, told CNBC in early September that he was "disappointed" in Kraft Heinz's planned split, and that Greg Abel, who took over as Berkshire Hathaway's chief executive, expressed that to Kraft Heinz.

Why This Matters for Investors

Berkshire Hathaway's large stake and following means the loss of its support could deal another blow to confidence in Kraft Heinz's stock after an extended decline.

Shares of Kraft Heinz, which have lost nearly 70% from their 2017 highs, have floundered for most of the decade since the Buffett-backed merger of Kraft and Heinz, as the conglomerate struggled with shifting consumer tastes and growing competition.

Now, Kraft Heinz's plans to break up its business may be taken as an acknowledgement that the company—and Buffett—misstepped in that merger.

The company has said its impending breakup, which is expected to be completed in the second half of 2026, could help the company streamline its operations, but the decision has done little to excite investors since it was announced in September.

Of the six Wall Street analysts with current ratings tracked by Visible Alpha, five have preferred to remain on the sidelines with neutral ratings, with one recommending selling the shares.

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Stocks rebounded from Tuesday's sell-off after President Trump said he would not use force to acquire Greenland.

Key Takeaways

• Wall Street strategists, optimistic about the outlook for stocks, are approaching the recent turmoil over President Trump's efforts to acquire Greenland as a buying opportunity.
• Jonathan Curtis, CIO of Franklin Equity, said he expects the AI boom to continue to support tech mega-caps, but that the AI rally was likely to broaden out to other segments of the stock market this year.
• Small cap indexes and the equal-weight S&P 500 have outperformed mega-cap tech indexes since the start of the year, but some experts warn the first weeks of the year rarely reflect sustainable trends.

Yesterday’s sell-off struck many Wall Street strategists as a good buying opportunity, and investors appeared to agree. 

Stocks rose on Wednesday after President Trump said he would not use force to acquire Greenland, helping to ease concerns that yesterday drove stocks to their worst day in months. (Follow Investopedia's live markets coverage here.)

Many on Wall Street have taken this week’s volatility as an opportunity to buy stocks on sale. “The long-term trends around innovation, and in particular the building of artificial intelligence and the application of artificial intelligence, are squarely intact,” said Jonathan Curtis, chief investment officer of Franklin Equity, during an appearance on CNBC Tuesday night. “And quite frankly I still think markets are under-appreciating what lies ahead. So this volatility is good for us.”

Why This Is Important

President Donald Trump's unpredictable approach to diplomacy and trade policy has repeatedly roiled financial markets in the past year. Nonetheless, artificial intelligence and interest rate cuts lifted stocks to record after record, vindicating investors who bought the dips or stayed the course.

Many mainstays of the AI rally were hit by Tuesday's rout. Every member of the Magnificent Seven closed in the red, while shares of Broadcom (AVGO) slumped more than 5%. “Those are all the types of names that we would want to be active in in this volatility,” Curtis said of the tech giants. 

He was not alone in that assessment. Cathie Wood’s ARK Investment Management bought shares of Broadcom and Advanced Micro Devices (AMD) yesterday, adding to its bet the AI boom will continue to buoy chip stocks in 2026.

The Magnificent Seven stocks were mixed on Wednesday, with shares of chip giant Nvidia (NVDA) and Alphabet (GOOG), a recent favorite of AI investors, each up about 1%. Competitors Broadcom and Microsoft (MSFT) were down more than 2% in recent trading. The memory and data storage stocks that have led the AI rally for the past few months, including Sandisk (SNDK), Micron (MU), and Western Digital (WDC), were sharply higher after dodging yesterday's sell-off.

Curtis expects shares of the Magnificent Seven to continue to perform well this year. “But I think we’re also going to see a broadening out of the markets as the application of AI diffuses,” especially in knowledge-work intensive industries like financial services and healthcare, said Curtis. 

"What we’ve been telling clients is ‘Take advantage of this volatility. Continue to own the Mag 7. But also diversify your portfolio into those other companies,'" he added.

The broadening that Curtis forecasts has, to a certain extent, already begun. The equal-weight S&P 500 has outperformed the capitalization-weighted version so far this year, and the small-cap Russell 2000 is outpacing the mega-cap tech heavy Nasdaq 100. 

“Part of this shift seems to be driven by a growing belief that the economy is settling into something resembling a so-called ‘goldilocks’ environment” in which inflation is contained and the Federal Reserve is easing monetary policy, wrote Kristian Kerr, head of macro strategy at LPL Financial, in a note on Tuesday. Investors may also be optimistic that the Fed will lower rates more aggressively starting in May, and that the federal government could pursue targeted stimulus to ease financial pressure on lower-income consumers ahead of this year’s midterm elections, according to Kerr.

Though Kerr warned that trading at the start of the year is often distorted by rebalancing and “tactical jockeying” among institutional investors. “In most years, it is not until mid-February or early March that the genuinely sustainable trends begin to really reveal themselves,” wrote Kerr. 

Look for next week’s big tech earnings—including reports from Microsoft, Meta (META), Tesla (TSLA) and Apple (AAPL)—for signs of a more sustainable broadening. “If the market continues to reward smaller names and equal weight indices even after the mega caps report, then the probability of a meaningful and durable broadening rises in a significant way,” he said. 

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Genova yellowfin tuna cans have been recalled.

Key Takeaways

• Avoid Genova yellowfin tuna cans, which may be contaminated with the bacteria that causes botulism, according to recall notices.
• The cans in question were distributed to stores in Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin, Maryland, Virginia and California.

Fish around for a safe can of tuna next time you're at the grocery store.

Health officials are advising consumers to avoid certain cans of Tri-Union Seafoods' Genova yellowfin tuna. The cans, initially recalled over botulism concerns last February, were accidentally sent to stores by a distributor, according to a release the company posted on the Food & Drug Administration's website this week.

Tri-Union Seafoods, a manufacturer and distributor, said the quarantined cans were sent to Meijer stores in Illinois, Indiana, Kentucky, Michigan, Ohio and Wisconsin; Giant Foods locations in Maryland and Virginia; and Albertsons (ACI), Safeway, Vons and Pavilions shops in California.

The company through a spokesperson declined to say when the distributor sent out the quarantined cans or when they started to reach retailers. Tri-Union Seafoods told Investopedia on Wednesday that there have been "no confirmed reports" of illness in connection with the cans.

Why This News Matters to Consumers

The bacteria Clostridium botulinum can cause potentially life-threatening food poisoning. Health experts say to avoid it.

"Tri-Union Seafoods is committed to upholding the highest safety and quality standards," it said in a statement issued as part of the 2025 recall.

Don't eat the tinned fish, even if it appears or smells fine, health officials said. Tri-Union Seafoods, a subsidiary of Thai Union, recalled the product last February because of concerns that faulty seals may lead to Clostridium botulinum contamination. The bacteria can cause fatal food poisoning.

The company said the recall was "taken out of an abundance of caution after our lid supplier notified us of a manufacturing defect affecting the 'easy open' pull-tab lids on a limited number of products that may compromise the integrity of the product seal (especially over time). ... We are working closely with the third-party distributor to understand how this mistake occurred and to prevent it from happening again."

Consumers should avoid the four-pack of 5-ounce cans of Genova yellowfin tuna in olive oil, which has the can codes S84N D2L and S84N D3L, and best if used by dates of Jan. 21 and Jan. 24, 2028. People should also stay clear of 5-ounce cans of Genova yellowfin tuna in extra virgin olive oil with sea salt, which has the can codes S88N or D1M and best if used by date of Jan. 17, 2028, the release said.

Consumers who bought recalled tuna can seek a refund from the retailer who sold it to them, or contact Tri-Union Seafoods for a retrieval kit and coupon at [email protected] or 833-374-0171, the release said.

This article has been updated since it was first published to reflect further correspondence with Tri-Union.

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Netflix shares have been pressured in recent months.

Key Takeaways

• Netflix shares slid Wednesday, extending their monthslong decline after the streaming giant failed to impress investors with its latest financial results.
• Netflix's earnings narrowly topped fourth-quarter estimates, but the streaming giant's first-quarter outlook disappointed. The company also said it would pause stock buybacks in order to finance its acquisition of Warner Bros. Discovery.

Investors are scrutinizing Netflix's results more closely than ever. They don't like what they see.

The streaming giant's stock was down nearly 5% in recent trading, sliding after reporting earnings that narrowly topped analysts' estimates, as Netflix (NFLX) failed to impress investors with its outlook amid concerns around its efforts to buy Warner Bros. Discovery (WBD).

The move lower extends a monthslong decline for the entertainment stock, with Wednesday's losses leaving Netflix shares down nearly 40% from last summer's highs. Uncertainty around Netflix's pending purchase of Warner Bros. Discovery, which faces likely regulatory scrutiny as well as a competing bid that has forced the company to rework its offer, has added to the pressure on the stock.

Why This Matters to Investors

Wednesday's losses underscore how Netflix investors, long accustomed to strong results from the streamer, have heavily punished the stock for underwhelming results in recent quarters.

Netflix said late yesterday it expects earnings per share of $0.76 on revenue of $12.16 billion in the current quarter, slightly below the EPS of $0.82 on revenue of $12.19 billion that analysts surveyed by Visible Alpha were looking for. Netflix also said it plans to pause stock buybacks to help it accumulate cash for the Warner Bros. deal, the change coming after amending its offer to an all-cash deal in an effort to fend off a competing offer from Paramount Skydance (PSKY).

The streamer's fourth-quarter results came in slightly better than expected, with revenue of $12.05 billion compared to the $11.97 billion analyst consensus, and EPS of $0.56, a cent above estimates.

William Blair analysts wrote following the results that while the "overall fundamentals of the business remain solid," they expect Netflix's stock could remain under pressure until the Warner Bros. deal is completed.

That could mean more volatility until at least April, when Netflix is set to report first-quarter results and shareholders are scheduled to vote on the deal, analysts at Wedbush told clients Wednesday.

Both firms, which reiterated "outperform" ratings for the stock, suggested that could potentially set Netflix up for a rebound after the deal is finalized.

While ratings are still in flux, Wall Street analysts' mean target compiled by Visible Alpha at $115 would suggest over 26% upside from the stock's recent level.

News of the day for Jan. 21, 2026

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President Trump arrived in Switzerland Wednesday ahead of a scheduled address at the World Economic Forum

Stock futures are slightly lower this morning after sinking on Tuesday owing to new tariff threats from President Donald Trump; investors are awaiting Trump's speech today at the World Economic Forum in Davos, amid ongoing tensions related to the president's efforts to acquire Greenland; Netflix stock is tumbling after the streaming giant released earnings and said it would pause stock buybacks to help finance the Warner Bros. Discovery acquisition; Johnson & Johnson shares are moving lower after the company's fourth-quarter profits fell short of Wall Street estimates; and United Airlines shares are rising after its results topped expectations. Here's what you need to know today.

Stock Futures Inch Lower After Tuesday's Selloff

Stocks are pointing to a marginally lower open on Wednesday as markets remain under pressure amid ongoing geopolitical uncertainty. Futures tied to the Dow Jones Industrial Average and the tech-heavy Nasdaq were down 0.2%, while S&P 500 futures slipped 0.1%. On Tuesday, the Dow lost 1.8%, the S&P 500 fell 2.1%, and the Nasdaq sank 2.4%, the worst day for the major indexes since October. Gold futures hit another record this morning—the precious metal was up 2% at $4,865 an ounce recently—as investors seek out safe havens amid the renewed market volatility. The 10-year Treasury yield, which influences a range of consumer borrowing costs, was little changed at 4.29% after hitting its highest level since August yesterday. Bitcoin was at $88,500, down from an overnight high of $90,000, extending a weeklong slump for the cryptocurrency.

Trump Slated to Speak at Davos Amid Greenland Tensions

President Trump has arrived in Davos, Switzerland to speak at the World Economic Forum and meet with European leaders, after spending the last several days pushing for a U.S. acquisition of Greenland. Trump's speech before government and corporate leaders is scheduled to begin at 8:30 a.m. ET. Trump over the weekend threatened to impose new tariffs on several key European allies, starting Feb. 1, if the U.S. is not allowed to acquire Greenland. Along with addressing those threats and the ongoing political conflict around Greenland, Trump is expected to unveil major housing market reforms focused on improving affordability, including plans to allow 401(k) funds to be used for down payments on a home and restrictions on institutional investors in the housing market.

Netflix Stock Drops as Outlook, Stock Buyback Pause Disappoint

Netflix (NFLX) shares are tumbling Wednesday morning after the streaming giant issued disappointing first-quarter guidance and said it's pausing stock buybacks to help pay for the pending Warner Bros. Discovery (WBD) acquisition. Late Tuesday, Netflix reported better-than-expected fourth-quarter results on the top and bottom lines, and its full-year revenue outlook was slightly above estimates. But the entertainment giant's first-quarter forecasts of $12.16 billion in revenue and $0.76 earnings per share were each lower than analysts surveyed by Visible Alpha anticipated. Netflix recently amended its agreement to acquire Warner Bros. Discovery to an all-cash one, rather than the previous stock-and-cash offer. Netflix shares were down about 7% ahead of the opening bell, trading at their lowest levels since late 2024.

Johnson & Johnson Stock Slips as Profits Fall Short of Estimates

Shares of Johnson & Johnson (JNJ) are also moving lower this morning after the pharmaceutical and medical devices giant posted fourth-quarter results. Revenue of $24.56 billion topped estimates, but adjusted earnings per share of $2.46 was 1 cent shy of estimates, while its reported earnings per share of $2.10 was well below the $2.43 analyst consensus. Sales grew across both of Johnson & Johnson's key segments, and also grew both in the U.S. and internationally. Shares of the Dow component, which hit a record high of near $220 last Thursday, were down more than 3% at around $211 in recent premarket trading.

United Airlines Stock Jumps as Results Top Expectations

United Airlines (UAL) stock is gaining this morning after the carrier reported better fourth-quarter results than analysts had forecast. The airline said after the closing bell Tuesday that it generated revenue of $15.4 billion in the quarter, up 5% year-over-year, while adjusted earnings per share came in at $3.10, which was 11 cents higher than the analyst consensus. The company said canceled flights and refunds to customers because of the government shutdown's impact on the air traffic control system in October and November cost it about $250 million in pre-tax earnings for the quarter. United shares were up more than 3% recently.

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Several key 2026 real estate trends will have a big influence on home ownership in America.

Key Takeaways

• Mortgage rates are expected to dip slightly in 2026, which may improve affordability, but borrowing costs will remain relatively high.
• Housing costs will vary widely by location, with better deals more likely in parts of the Midwest and South than in high-cost coastal and Northeast markets.
• Buyers may find value by considering adjustable-rate mortgages or new construction, since ARMs offer lower initial rates and homebuilders are offering buyers incentives.

Home sales remained near historic lows in 2025, as high housing costs and elevated mortgage rates continued to keep buyers on the sidelines. But housing affordability is expected to improve in 2026—if only slightly.

That could create an opportunity for house hunters who have been looking for the right moment to enter the market. Here are some housing trends to watch if you’re in the market to buy a home in 2026.

Mortgage Rates Will Drop, But Not as Much as You Think

Mortgage rates peaked at more than 7% in early 2025 and then eased in the second half of the year to around 6.2%. That offered some relief from the high borrowing costs that have helped freeze the housing market.

Why This Matters to You

Buying a home is often the biggest financial decision people make, and conditions like mortgage rates, prices, and local affordability can shape monthly budgets and household wealth. Understanding how the market may evolve in 2026 helps prospective buyers decide whether waiting, relocating, or choosing different financing could meaningfully improve affordability.

But most experts don’t expect mortgage rates to fall much further. The Mortgage Bankers Association projects rates will remain between 6% and 6.5% in the coming year. Real estate firm Redfin projects an average mortgage rate of 6.3% in 2026, while the National Association of Realtors also saw mortgage rates hanging at “around 6%.”

“As we go into next year, the mortgage rate will be a little bit better," said National Association of Realtors Chief Economist Lawrence Yun. "It will be a modest decline that will improve affordability."

Mortgage rates aren't expected to move significantly, even though the Federal Reserve is likely to continue lowering short-term interest rates in the coming year. 

The Fed has reduced interest rates by a total of 1.75 percentage points since it first started cutting in September 2024. But mortgage rates haven’t come down in kind. In fact, rates went up after the Fed first began cutting, and are only now just starting to return to September 2024 levels. Economists believe that additional Fed rate cuts are unlikely to loosen mortgage rates further, which closely track the long-term borrowing costs reflected in the 10-year Treasury yield.

“The risk of growing budget deficits and elevated inflation expectations will keep longer-term rates from falling further, even as the Fed cuts short-term rates,” the MBA wrote in its 2026 outlook. “MBA expects there will be periods where rates drop, which will provide moments of refinance activity, similar to what has occurred several times in 2025.”

There Are Deals, But They May Not Be Local

Housing prices are high, but the high-cost housing trends aren’t spread evenly across the U.S. Some areas are experiencing intense strains on affordability, while prices in other areas haven’t risen as fast.

Cities on the California coast and in the heavily populated Northeast remain among the highest-cost areas of the country to live, according to Oxford Economics. But in some areas in the South and Midwest, housing prices are more reasonable, even if they are growing at a faster rate. 

Oxford Economics pointed to cities like Cleveland, Cincinnati, Detroit, St. Louis, New Orleans, Louisville, Ky., Memphis, Tenn, Tucson, Ariz. and Oklahoma City, Okla. as cities that still offer more-affordable housing options. 

“Although most of these metros have lower house prices than the U.S. average, more than half have seen stronger house price appreciation than the [rest of the] US over the last five years. Still, what differentiates these more affordable metros is the differences in property taxes and insurance,” wrote Oxford Economics.

An Adjustable-Rate Mortgage Might Be Right for You

With mortgage rates hovering around 6%, an increasing number of borrowers have turned to adjustable-rate mortgages, commonly known as ARM loans. These loans can offer a lower interest rate for a set period, often five years, before periodically resetting based on a benchmark. In September, approximately 10% of home borrowers opted for an ARM loan, compared to the historical average of around 6% of mortgage loans. 

ARMs can provide a path to a more affordable mortgage, but they carry some risk if the borrower can’t make the payments when the rate increases. However, borrowers who choose ARMs generally have better credit scores, as these loans are evaluated against the current mortgage rate, not the introductory rate period.

“In this environment where borrowers are struggling with lack of affordability, moving to an ARM can result in real savings,” wrote MBA Deputy Chief Economist Joel Kan.

It May Be Better to Buy A New Home

While high prices have depressed home sales across the board, sales of newly constructed homes are outpacing those of existing homes, which remain at historically low levels.

Generally, new homes have been more expensive than existing homes. However, more homebuilders are offering incentives, making new home prices more competitive with those of existing homes. In August, the most recent month for which data is available, new homes sold for an average of $413,500, lower than the average price of $422,600 for existing homes. 

Builder incentives, which can include mortgage rate buy-downs, reduced closing costs, and credits for housing design changes, have helped push new home sales higher. The limited inventory of existing homes is also making new home prices competitive. 

“Buyers are seeing a lot of value in new homes and taking advantage of the unusually high glut of new homes for sale on the market,” said Heather Long, chief economist at Navy Federal Credit Union.