This Weekly Financial Markets Update reviews the top market headlines: Manufacturing Activity Surges in January, Yield Curve Steepening Continues, Wild Week for Bitcoin
  • The ISM Manufacturing Index rose to 52.6% in January
  • The 10-year / 2-year Treasury bond yield spread hit 0.73 percentage points last week
  • Bitcoin declined 16.5% last week

Top Three Market Headlines

Manufacturing Activity Surges in January: The Institute for Supply Management (ISM) reported last week that its ISM Manufacturing Index, based on surveys of business executives, jumped to 52.6% in January from 48.9% in the prior month. This was highest reading for the index since August of 2022 and was the first time in 12 months it exceeded the 50% threshold that distinguishes expansion of business activity from contraction. Meanwhile, the services sector remained in expansionary mode, as the ISM Services Index registered 53.8% for the month, which matched December's reading and was the 19th consecutive 50%+ monthly reading.

Yield Curve Steepening Continues: The slope of the U.S. yield curve steepened to its widest level in four years last week when the excess yield on the 10-year Treasury bond versus the 2-year bond reached 0.73 percentage points. The spread has risen steadily since mid-2023 when it was negative as a result of short-term bond yields exceeding those of longer-term issues. Over this period, the 2-year Treasury yield has declined by approximately 1.5 percentage points in conjunction with the Federal Reserve's move to cut interest rates, but the yield on 10-year Treasury bonds has instead risen, which some observers attribute to rising U.S. government debt loads and lesser demand for U.S. Treasuries.

Wild Week for Bitcoin: Bitcoin came under renewed pressure last week, experiencing sharp declines and extreme volatility. After falling more than 13% over the first three days of the week, the cryptocurrency plunged another 12% on Thursday alone, finishing at $63,795.00. A 10% rebound on Friday to $70,580.00 eased its weekly loss to 16%, its steepest one-week decline since 2022. Some pundits attributed the selloff to weak liquidity and waning institutional demand. After last week's losses, Bitcoin is now off a staggering 44% from its recent highs in October 2025 and has erased all of the gains it made after the U.S. presidential election in November 2024.

As of February 6, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.13% 2.83% 2.83% 20.84%
S&P 500 -0.09% 1.36% 1.36% 15.42%
Russell 2000 2.18% 7.64% 7.64% 17.32%
MSCI EAFE 0.51% 5.75% 5.75% 30.86%
MSCI Emerging Markets -1.40% 7.32% 7.32% 39.69%
FTSE NAREIT Equity 3.15% 6.29% 6.29% 6.69%
Bloomberg Commodity -2.20% 7.93% 7.93% 17.77%
Bloomberg U.S. Aggregate 0.28% 0.39% 0.39% 6.42%

Institute for Supply Management 2/2/2026 & 2/4/2026, MSN 2/5/2026, WSJ 2/6/2026. Data from Morningstar Direct and FactSet. Returns for periods greater than one year are annualized. Investment advisory services are offered by Gallagher Fiduciary Advisors, LLC ("GFA"), an SEC registered investment advisor that provides retirement, investment advisory, discretionary and independent fiduciary services. Registration as an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. GFA is a limited liability company with Gallagher Benefit Services, Inc. as its single member. GFA may pay referral fees or other remuneration to employees of Arthur J. Gallagher & Co. or its affiliates or to independent contractors; such payments do not change our fee. Neither Arthur J. Gallagher & Co., GFA, their affiliates nor representatives provide accounting, legal or tax advice. GFA does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your GFA consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.