The S&P 500 had limited gains on Friday, following the strong increases in gold and silver, which showed profitable opportunities. Even with market fluctuations, a strong rally continued into the week, as copper prices rose and the dollar dropped sharply. Looking toward 2026, we wonder if the dollar’s strong performance, which ended around 2011, is truly over. Economic recovery and issues in Europe and Japan are factors to consider. The Treasuries market, which is important for managing national debt, remains steady and interesting.

Stock Market Dynamics

The stock market is in a two-month consolidation phase. Questions arise about whether the Nasdaq will take the lead and if the market breadth is healthy. Investors are facing decisions during tense pre-Davos discussions and are responding to the announcement regarding the Greenland framework. Silver and other precious metals prompt thoughts about potential bubbles and long-term value. In 2026, we may see a shift toward commodities, favoring value stocks over tech stocks. Legal disclaimers remind readers of the risks and uncertainties involved in the markets. It is essential for individuals to do their own research before making any investment decisions, as they are solely responsible for their financial obligations. The author does not provide investment advice and cannot be held liable for the article’s content.

S&P 500 and Currency Trends

Currently, the S&P 500’s gains seem limited as it consolidates between 6000 and 6200, a range it has stayed in since late last year. We should watch for any weakness in market breadth as a hint that breakouts may fail. Derivative traders might consider selling volatility since the index appears stable within this channel for now. The U.S. dollar’s significant drop is a major theme, with the Dollar Index (DXY) recently falling below 99.50 for the first time since late 2024. This follows a mid-January report showing that inflation dropped to 2.8% in December 2025, making people speculate that the long dollar bull market may be over. A weak dollar could boost commodities and non-U.S. assets in the coming weeks. Gold and silver are currently the best investments, with gold surpassing $2,500 last week. Silver’s recent rise above $35 confirms this trend; it’s not a bubble, but rather a recovery after lagging behind in 2025. The best strategy for trading this momentum is to buy dips in precious metals futures or related call options. We see a clear shift from technology to value stocks, which we expect to dominate in 2026. While the Nasdaq ETF (QQQ) struggles to break past the $630 resistance, energy and industrial stocks have been performing well. This trend has also boosted commodities like copper, which increased by 5% after better-than-expected manufacturing data from China was released two weeks ago. The calm in the Treasury market, with the 10-year yield around 4.1%, provides stability in this environment. This steadiness is likely due to the significant U.S. government refinancing needs, which will help keep yields in check. For traders, this suggests that while the dollar may decline, a complete collapse in interest rates that could spark a new tech rally seems unlikely. Create your live VT Markets account and start trading now.

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