In response, several prominent Republican Senators pushed back against the subpoenas and voiced support for Fed independence, easing market concerns.

https://www.reuters.com/world/us/us-senate-republicans-concerned-over-probe-powell-impact-fed-2026-01-12/

AI company Anthropic released a Claude Cowork app that caused a steep decline in the software sector, as fears surged that AI advancements could ultimately eliminate the need for entire sectors of the economy. That idea jolted investors’ previous opinions that AI was nearly all beneficial to the markets and economy.

https://finance.yahoo.com/news/5-industries-that-have-gotten-rocked-by-the-ai-scare-trade-defining-markets-this-year 164746958.html

Meanwhile, underlying fears of credit risks in private credit funds grew, as numerous large alternative asset managers limited redemptions from specific funds, fueling concerns there was a bubble in the industry.

https://www.advisorhub.com/trapped-in-private-credit-investors-wait-to-pull-out-5-billion/

Starting with geopolitics, the focus for markets remains on the price of oil. Elevated oil prices pose a risk for the markets and economy in multiple ways including 1) No Fed rate cuts as the Fed worries higher oil prices may spur inflation, 2) Depressed consumer spending as higher gas prices reduce disposable income and 3) Tighter corporate margins given increased transportation and infrastructure costs.

https://paulkrugman.substack.com/p/war-oil-and-the-world-economy

While analogies to the financial crisis are understandable, it’s important to realize the private credit market is much, much smaller than the markets that caused the financial crisis and Fed officials have recently said they see no indication of a systemic problem.

https://www.google.com/search?q=https://www.wsj.com/articles/private-credit-slow-burn-not-2008-explosion-2026

https://www.barrons.com/articles/private-credit-market-economy-d2387514?gaa_at=eafs&gaa_n=AWEtsqfkM-8f HIgM5_tZ-WP36JZIrNDDM 91UV66ICXbICUq1_1PcNs4to69UVrxtM%3D&gaa_ts=69cbf099&gaa_sig=JzlB6Opi94FVPV7x763 OvHFfpTYT06t5uFETHuJ5iTm6uicDqnKPbI7fv-ZUBKJcAaATtPsC9Er7m-bm4WLkQ%3D%3D

https://finance.yahoo.com/news/fed-chair-powell-sees-no-threat-of-private-credit-contagion-says-interest-rates-are-in a-good-place-165159434.html

https://www.barrons.com/articles/private-credit-market-economy-d2387514?utm_source=chatgpt.com