Global Dominant Cycle Watch
As of January 17, 2026
Wall Street started the year with momentum, but the underlying structure remains highly fragmented. Index-level stability masks a market defined by sharp rotations, narrow leadership and growing dispersion between winners and losers.
Small caps continue to outperform, with the Russell 2000 clearly ahead of the S&P 500. This relative strength reflects rising expectations for economic acceleration and improving market breadth, also visible in the outperformance of the equal-weighted S&P 500 versus its market-cap-weighted counterpart.
Semiconductors remain the dominant leadership theme, driven by strong guidance from Taiwan Semiconductor and sustained demand for AI infrastructure. Capital equipment suppliers and select memory names continue to benefit, while large parts of the software and platform space lag as competitive pressure from AI weighs on margins and valuations.
Outside of technology, financials delivered solid but unspectacular earnings reactions, transportation stocks signaled ongoing economic friction, and falling energy prices provided relief for airlines. Commodities, particularly industrial metals, have decoupled from energy and show notable relative strength.
Despite improving macro data and resilient growth expectations, volatility remains elevated. Market leadership is narrow, trends rotate quickly, and selectivity is critical. The broader market environment is far more demanding than in prior years.
Global Cycle Analysis – Framework
The following cycle assessment is based on a daily analysis of approximately 60 global core assets, including major international equity indices and futures markets. Each asset is evaluated within a time-cycle model designed to identify statistically relevant cyclical highs and lows.
