US equity index futures mixed; Dow edge up, Nasdaq 100 down ~0.6%
Euro STOXX 600 index up ~0.7%
Dollar up; bitcoin rallies ~2%; gold falls >3%; crude slides >4%
US 10-Year Treasury yield ticks up to 4.25%
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DIVIDENDS BOLT OUT OF THE GATE, WHILE GROWTH IS THE GLUE
The S&P 500 .SPX kicked off 2026 with a January rise. However, when it comes to the major style factors that have historically driven portfolio returns, investors are already seeing quite a shuffle vs. last year.
Major investing style factors include stocks discounted to their fundamentals (value), financially sound companies (quality), size (small caps), stable, lower-risk stocks (low volatility), and stocks exhibiting upward price trends (momentum).
To this, let's add in as separate factors mid- and large-caps, high-growth companies (growth), and those stocks that provide income (dividends).
The S&P 500 index .SPX rallied about 1.4% in January. Meanwhile, the SPDR S&P 500 ETF Trust SPY.P tacked on about 1.5%.
Here is a graphic showing 2026 YTD factor ETF percentage price changes as well as how they performed vs. the SPY (factor/SPY ratio change):
After finishing second to last in 2025, dividends NOBL.K have taken the early lead with a 5.7% January gain. Small caps IWM.P are on their heels, with a 5.5% advance.
Off the lead are mid caps IJH.P (+4%), low volatility SPLV.P (+3.1%), value SPYV.P (+2.4%), momentum MTUM.K (+2.2%), and quality QUAL.K (+1.9%).
Large caps SCHX.P (+1.2%) and growth SPYG.P (+0.5%) are both positive, but are underperforming the SPY so far this year.
Of note, after placing first overall in 2025, second in 2024, and first in 2023, growth's last-place start in early 2026 is noticeable.
That said, traders continue to eye recent relative strength shifts, which have seen the equal-weighted S&P 500 .SPXEW outperform the cap-weighted index, small caps .RUT show some muscle, and value .IVX outperform growth .IGX.
It's still early in the 2026 race, but traders will be keeping a close eye on all these factors as they jockey for position throughout the year.
(Terence Gabriel)
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EARLIER ON LIVE MARKETS:
DRIVERS BEHIND GOLD RALLY STILL POWERFUL DESPITE PULLBACK - BARCLAYS CLICK HERE
WHY A FED UNDER WARSH MAY BE TOO HAWKISH CLICK HERE
EUROPEAN SOFTWARE: WHEN FEAR CLOUDS FUNDAMENTALS CLICK HERE
DEFENSIVES HELP STOXX LIMIT THE DAMAGE CLICK HERE
BEFORE THE BELL: FUTURES FALL AS METAL ROUT HITS MINERS CLICK HERE
METALS GET A LOT LESS PRECIOUS AS POSITIONS SQUEEZED CLICK HERE
2026YTDFactorsReturns02022026 https://fingfx.thomsonreuters.com/gfx/buzz/dwvkqwgjlvm/YTDFactorReturns202602022026.png
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)