By William Power

Fund investors had something to cheer about in January, even though market tumult had caused some scattered boos along the way.

After a volatile month of bracing headlines and market bumps, the average U.S.-stock mutual fund or exchange-traded fund posted a total return of 2.4% in January. That followed up the 12.8% advance for all of 2025, according to final statistics from LSEG. (See the Mutual-Fund Yardsticks table.)

Stock indexes had knocked down record after record in recent months, and tech stocks in particular were due for a pause. They absorbed that pause as February began, before stocks once again rallied on Friday -- marked by the Dow Jones Industrial Average's first close above 50000.

"The dark side of artificial intelligence was on full display in the stock market" in early February, says strategist Ed Yardeni, "as various disconcerting news items stoked investor anxieties about semiconductor stocks and as fears triggered by a new AI-enabled tool to automate legal work pummeled software stocks broadly."

But as for pummelings, nothing could match what happened to precious metals and funds that invest in them, as January ended -- with historic drops on the last day of the month. Still, the funds registered gains for January -- with gold-oriented funds up 11% for the month and 148% for the 52 weeks.

On Friday, it was all smiles on Wall Street when the Dow Jones Industrial Average surpassed 50000 for the first time. It was "a major psychological barrier," said Adam Turnquist, chief technical strategist for LPL Financial. And smiles were even brighter on fans of the Dow Theory, which predicts good things when there is a simultaneous record for both the Dow industrials and the Dow Jones Transportation Average, which happened Friday.

International-stock funds, which have often trailed their U.S. counterparts over the years, continued to turn that trend around as the year began -- the category was up 4.9% for January, after logging a 29.6% gain for 2025.

Bond funds rose, in a month when Kevin Warsh won President Trump's nomination to lead the Federal Reserve. Funds focused on investment-grade debt (the most common type of fixed-income fund) were up 0.3% in January, after the 7.2% advance for all of 2025.

FINANCIAL FLASHBACK

A look back at Wall Street Journal headlines from this month in history

-- 55 YEARS AGO: Nasdaq's start

In February 1971, a new, computer-based stock market was established that would, over time, transform the investment landscape. It was known as Nasdaq, an acronym for the National Association of Securities Dealers Automated Quotations system.

At the time, the New York Stock Exchange and the American Stock Exchange both had trading floors operated primarily by traders known as specialists whose job was to maintain orderly markets and ensure that customers received the best prices when trading.

But Nasdaq did it differently, without a trading floor. As the market's name suggests, it used automated stock quotes instead. Only 2,150 stocks were initially listed. It grew out of what was known as the over-the-counter market.

For a long time, Nasdaq was viewed as a risky place to invest because listed companies were often small and focused on novel ideas. It was the opposite of what the NYSE stood for: low-risk blue-chip companies.

By the mid-1990s, things changed. "Nasdaq was firmly cemented as the place for innovation," says Drew Boyer, president and founder of Boyer Financial Group. "It's where tech and biotech go to grow." That remains the case today with Nvidia, Alphabet [parent of Google] and other innovative firms dominating the Nasdaq-100, which is composed of the largest nonfinancial firms listed on Nasdaq.

The company also developed newfangled investment methods, Boyer says. "In the 1980s, Nasdaq introduced small-order execution." That allowed individuals to buy or sell up to 1,000 shares. That would seem to have paved the way for financial companies such as Robinhood and similar innovative businesses, he says.

Boyer also forecasts a shift from limited trading hours to 24-hour, seven-day-a-week trading. "It's inevitable," he says.

-- 40 YEARS AGO: Many Small Investors Quit Picking Stocks, Shift to Mutual Funds; They Think the 'Little Guy' Can't Fight Institutions

-- 75 YEARS AGO: Feudin' and Fightin': Federal Reserve-Treasury Feud May Spread to Congress

--By Simon Constable

(END) Dow Jones Newswires

February 09, 2026 12:15 ET (17:15 GMT)

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