Welcome to this week's essential investment update. We're kicking off 2026 with some major market moves—record highs, shifts in tech giant rankings, and bold proposals from Washington that could reshape the investment landscape.

In today's briefing, I'm covering the five most important stories every investor needs to understand right now.

Plus, I'm sharing my complete framework for building a dividend portfolio that generates $1,000 per month in passive income—even if you're starting from zero. Because understanding the headlines is one thing, but turning that knowledge into real income is what matters.

Let's dive in.

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1. S&P 500 Hits New All-Time Highs

The S&P 500 closed Friday at a record high, rising 0.6% to end the first trading week of 2026 with gains. The benchmark index finished at 6,921 points despite concerns about Trump administration tariff policies. Small-cap and blue-chip benchmarks also hit new peaks as equity gains broadened beyond big tech names. The Nasdaq 100 jumped 1%, while the Dow Jones gained roughly 0.55% during the week.

2. Alphabet Overtakes Apple in Market Capitalization

Alphabet surpassed Apple to become the world's second-most valuable company for the first time since 2019. Alphabet closed Wednesday with a market cap of $3.88 trillion versus Apple's $3.84 trillion, trailing only Nvidia's $4.6 trillion. The shift reflects Alphabet's 65% stock surge in 2025, driven by its Gemini 3 AI model success, while Apple fell for six consecutive sessions amid questions about its AI strategy.

3. Trump Proposes $1.5 Trillion Defense Budget

President Trump announced plans for a $1.5 trillion military budget for fiscal year 2027, representing a 50% increase from the current $901 billion. Trump stated the increase would be funded through tariff revenue and would build a "Dream Military" for dangerous times. Defense stocks initially dropped on threats to limit executive pay and stock buybacks, but rallied in after-hours trading following the budget announcement.

4. Bank Earnings Season Begins Next Week

Major bank earnings kick off January 13 with JPMorgan Chase reporting. Citigroup, Wells Fargo, and Bank of America follow January 14, while Goldman Sachs, Morgan Stanley, and BlackRock report January 15. The earnings season coincides with key economic data including the Consumer Price Index on January 13 and Producer Price Index on January 14, which will influence Federal Reserve rate decisions.

5. Wall Street Projects Another Strong Year

Every Wall Street forecaster tracked by Bloomberg predicts the S&P 500 will rally for a fourth consecutive year in 2026. Bank of America targets 7,100 (roughly 4% gain), while Deutsche Bank forecasts 8,000 (17% gain). However, analysts warn of risks including high valuations, potential AI bubble concerns, and uncertainty around Trump's tariff policies.

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