Global Markets Retreat as Metals Rout and Risk Assets Slide
Johnson confident House can end shutdown by Tuesday
| LINKS |
Link: The Week Ahead, Jan. 31: Senate Clears Stopgap Funding Bill,
But Key House Votes Monday
Link: Video: Wiesemeyer’s Perspectives, Feb. 1
Link: Audio: Wiesemeyer’s Perspectives, Feb. 1
| Updates: Policy/News/Markets, Feb. 2, 2026 |
| UP FRONT |
TOP STORIES
— House shutdown endgame: Speaker Mike Johnson says House Republicans expect to move largely on their own to pass the Senate funding deal by Tuesday, with President Trump potentially intervening to lock down votes amid GOP frustrations and immigration disputes.
— Hassett on the Fed: Trump adviser Kevin Hassett urges the Federal Reserve to shrink its balance sheet and stay focused on its core mandate, backing Kevin Warsh for Fed chair and warning that any inflation spike could limit future rate cuts.
— Dicamba reapproval: EPA is preparing to reapprove dicamba with what it calls its “most protective” registration yet, reviving legal and political tensions over drift risks despite prior court rejections.
— Farm income outlook ahead: USDA’s upcoming farm income forecast is expected to highlight heavier reliance on government aid and renewed scrutiny of farm balance sheets as margins tighten.
— Sugar trade pressure: U.S. sugar producers warn that tariff circumvention via tier-two imports is undercutting prices, compounding stress from global oversupply, freeze risks, and delayed USDA aid.
FINANCIAL MARKETS
— Global pullback: Stocks retreat worldwide as investors de-risk amid extreme precious-metals volatility; oil drops on signs of Iran talks, Treasuries edge higher, and focus turns to the January jobs report and major earnings.
— Equities snapshot: Major U.S. indexes finish lower Friday, mixed on the week, reflecting heightened volatility and shutdown uncertainty.
— Earnings: Tyson Foods beats expectations and reaffirms outlook, lifting shares on strong chicken demand.
AG MARKETS
— Cattle inventory: USDA confirms a historically tight herd with only tentative heifer retention, supporting near-term prices but pointing to a slow, cautious rebuild into 2026.
— Weekly ag prices: Grains mostly lower on the week; cattle mixed; hogs softer.
ENERGY MARKETS & POLICY
— Oil slides Monday: Crude falls more than 5% as Trump signals Iran talks, unwinding January’s risk premium.
— Oil holds Friday: Prices consolidate near six-month highs as Iran tensions sustain a geopolitical floor.
— Alaska leasing: Trump administration schedules a Cook Inlet oil and gas lease sale for March.
TRADE POLICY
— Supreme Court tariff silence: A prolonged delay in the Court’s ruling on Trump’s tariffs may be quietly improving the administration’s position — or at least muting the impact of a potential loss.
POLITICS & ELECTIONS
— Texas upset: Trump downplays a surprise Democratic win in a deep-red Texas state Senate district as Democrats claim momentum.
— Generic ballot: A Fox News poll shows Democrats with a six-point edge over Republicans, the largest margin recorded in the survey.
FOOD POLICY & FOOD INDUSTRY
— Sugar at a crossroads: Policy-driven demand limits, GLP-1 adoption, and weaker ethanol pull abroad raise the risk of selective consolidation rather than an industry-wide collapse.
WEATHER
— Cold and storms: Freeze warnings linger across the Southeast with gradual moderation ahead; light snow spreads across the Great Lakes and Northern Plains, with mixed precipitation possible midweek in the Ohio Valley and Mid-Atlantic.
| TOP STORIES—Johnson confident House can end shutdown by Tuesday despite GOP frustrationsSpeaker says Republicans will likely move alone to pass Senate funding deal, as weather, narrow margins, and immigration demands complicate path forward House Speaker Mike Johnson (R-La.) said Sunday he is confident the House will pass a budget bill to end the partial government shutdown by Tuesday, even as Republicans brace for a difficult, mostly party-line vote and lingering anger over Democratic demands on immigration enforcement. In interviews on Meet the Press and Fox News Sunday, Johnson said logistical hurdles — including getting members back to Washington amid weather disruptions — are the main obstacle. After speaking with House Minority Leader Hakeem Jeffries (D-N.Y.), Johnson said it is clear Democrats will not help move the bill under expedited procedures, forcing Republicans to pass a rule and advance the package largely on their own. “That’s very unfortunate,” Johnson said, adding that passage is now “a formality.” Still, several outlets report that House Republicans face internal frustration over what they see as being boxed in by Democrats and the Senate. The Wall Street Journal notes some GOP members are floating new demands, while Johnson acknowledged President Donald Trump may need to intervene directly to secure votes. “I’m sure he will get on the phone with them,” the speaker said. Rep. Michael McCaul (R-Texas) said Republicans have already supported the framework once and questioned Democratic opposition. “The trick is getting it through the Rules Committee,” McCaul said, adding he believes Johnson would not proceed without the votes. The challenge is heightened by the GOP’s razor-thin majority and continued travel disruptions, while The Hill reports that party-line votes have increasingly become leverage points for Republican holdouts seeking last-minute concessions. On the Senate side, Sens. Rick Scott (R-Fla.) and Mike Lee (R-Utah) are urging House Republicans to push back against the Senate-passed package, arguing it should be revised to include elements of the SAVE America Act and a standalone Department of Homeland Security (DHS) funding bill that Democrats stripped out. Under the Senate-approved deal, DHS funding would be separated from the broader spending package, allowing most federal agencies to be funded through Sept. 30 while DHS receives a two-week extension to allow negotiations over immigration enforcement rules. Johnson said the goal is to approve the bulk of funding by Tuesday and then enter “two weeks of good faith negotiations.” Democrats, meanwhile, are pressing for stricter guardrails on Immigration and Customs Enforcement. They are seeking requirements that agents unmask and identify themselves, obtain judicial warrants, and face independent investigations. Jeffries said DHS “needs to be dramatically reformed,” arguing current safeguards do not go far enough. Johnson has rejected those proposals, warning that unmasking agents would increase danger and be unworkable for border enforcement. White House Press Secretary Karoline Leavitt said the administration is open to discussions but emphasized that President Trump will ultimately decide on any policy changes. Adding to the partisan clash, Sen. Ron Johnson (R-Wis.) accused Democrats of trying to “neuter” immigration enforcement, arguing their demands would fundamentally undermine how immigration law has long been administered. Upshot: Despite the tensions, House GOP leaders continue to project confidence that the votes will be there — and that the shutdown will end within days.—Hassett: Fed should shrink balance sheet and stay quietly focused on core mandateTrump economic adviser backs Warsh for Fed chair, warns inflation spikes could limit future rate cuts President Donald Trump’s top economic adviser Kevin Hassett said the Federal Reserve should concentrate on slimming down its balance sheet and refocusing on its traditional responsibilities, arguing the central bank works best when it operates “quietly” and without political drama. Speaking on Fox News’ Sunday Briefing, Hassett said the Fed’s job remains financial stability, lower interest rates, low unemployment, and low inflation — and that it should pursue those goals in an “old-fashioned way,” largely out of the spotlight. He emphasized that the balance sheet should be made “as lean as possible,” signaling continued support within the Trump administration for tighter control over the Fed’s footprint in financial markets. Hassett also strongly endorsed Trump’s pick for Federal Reserve chair, Kevin Warsh, calling him “the right person at the right time.” Hassett, who had been mentioned as a possible contender himself, described Warsh as data-driven and independent, stressing that policy decisions must remain anchored to incoming economic data rather than political pressure. Hassett cautioned that if inflation were to rise sharply, it could constrain how far interest rates can be cut in the future. Under such a scenario, he said, there may be little room for rates to fall back toward 1%. Hassett added that President Trump believes the U.S. economy is currently experiencing a positive supply shock — a dynamic he sees as supportive of growth without stoking inflation. He also previewed that Trump will outline a housing and affordability agenda during his upcoming State of the Union address, signaling a broader economic push beyond monetary policy. —EPA set to reapprove dicamba despite drift concernsDraft EPA statement calls it “most protective” registration yet, but critics say courts already rejected prior approvals The Environmental Protection Agency is preparing to reapprove dicamba — a controversial herbicide used on genetically modified soybeans and cotton — according to two EPA staffers and a draft agency statement obtained by the Washington Post. The draft acknowledges that dicamba remains a “vital tool” for many growers, while anticipating objections from other farmers and environmental advocates given its history of drifting onto neighboring fields and gardens and causing damage. The agency has approved dicamba twice before, but federal courts vacated both approvals over drift risks; EPA now describes its forthcoming action as the “most protective dicamba registration in agency history,” citing added measures aimed at reducing ecological harms. The draft and staffers suggest the registration decision will move forward next week, though EPA did not respond to a request for comment. Critics argue dicamba drift is effectively unavoidable and accuse the agency — under Administrator Lee Zeldin — of siding with industry. A senior scientist at the Center for Biological Diversity, which has sued EPA multiple times over dicamba, said there is “virtually no way” to prevent drift. EPA’s prior proposed registration (released in July) included limits such as requiring drift-reduction agents, prohibiting aerial application, banning spraying above 95°F, adding downwind buffers, and provisions to address runoff; the draft statement does not specify which measures will make the final cut, though an employee said it will likely track the proposal closely. The draft also says EPA found no risk to human health, but the move could still inflame tension inside the Trump administration between agriculture priorities and “Make America Healthy Again” activists pushing tighter pesticide limits.—USDA farm income outlook on Thursday puts government aid — and farm balance sheets — in focusUpdated forecast expected to highlight rising safety-net spending and renewed scrutiny of farm financial stress USDA is set to release on Thursday n updated outlook on U.S. farm income, with the report expected to underscore a growing reliance on government support as producers navigate tighter margins and elevated costs. The forecast is likely to show higher expectations for government payments, driven by increased outlays from traditional farmer safety-net programs as well as the Farmer Bridge Assistance (FBA) initiative, which is slated to deliver $12 billion in aid to farmers. Those payments are intended to cushion producers facing income pressure across multiple commodities. Beyond topline income figures, attention will center on what USDA’s projections signal for the financial health of the farm sector. Analysts and policymakers will closely examine indicators such as debt-to-asset and debt-to-equity ratios for signs of rising financial strain, particularly among highly leveraged operations. Lawmakers are expected to comb through the report for clues about the depth of stress in farm balance sheets and whether the data bolster the case for additional federal assistance in the months ahead. —Sugar industry flags tariff circumvention as imports surgeTier-Two sugar flows and freeze risks deepen pressure while producers await USDA aid and possible congressional action U.S. sugar producers and processors are raising alarms over a surge of tier-two sugar entering the country under a molasses tariff line, despite not being molasses — a workaround the industry says is circumventing long-standing sugar tariffs and undercutting domestic prices. Industry sources say the inflows are arriving at a moment when margins are already thin, compounding pressure from ample global supplies and softer prices. The concern is not just volume, but classification: shipments declared under a lower-duty category that avoids the higher tariff protections applied to refined sugar. At the same time, the sector is waiting on economic assistance from USDA, with discussions ongoing about whether existing authorities can deliver near-term relief. Producers are also looking to U.S. Congress for additional support, arguing that trade enforcement gaps and market disruptions warrant legislative attention. Weather has added another layer of risk. Following recent freezes in key growing regions, industry officials expect disaster assistance may be needed if crop losses materialize, potentially accelerating the call for federal aid. Taken together, the influx of tariff-light imports, delayed relief, and freeze damage has sharpened warnings across the sugar sector that without swift action — on enforcement, aid, or both — grower and processor stress could intensify into broader contraction. Note: See the Ag Markets section for more on the U.S. sugar outlook . |
| FINANCIAL MARKETS |
—Equities today: Stocks staged a broad global pullback, with S&P 500 futures pointing to a fourth straight day of declines as investors dumped risk across asset classes amid extreme volatility in precious metals. Bitcoin hovered near $77,000 after weekend losses, underscoring a wider de-risking move.
U.S. equity futures were under pressure, with the S&P 500 indicated 0.6% lower at the open and Nasdaq 100 contracts down 0.9%. Losses were sharper in Asia: South Korea’s Kospi, a bellwether for the artificial-intelligence trade, plunged 5.3%, while European stocks were little changed. In Asia, Japan -1.3%. Hong Kong -2.2%. China -2.5%. India +1.2%. In Europe, at midday, London +0.3%. Paris +0.3%. Frankfurt +0.6%.
Commodity volatility remained the market’s focal point. Gold pared losses after tumbling as much as 10%, while silver at one point sank 16% before reversing most of the drop. Brent crude slid about 5% after President Donald Trump said Washington is talking with Iran.
In rates, Treasuries posted modest gains, with the 10-year yield falling two basis points to 4.22%. The dollar steadied.
The turbulent backdrop comes as Washington slipped into a brief partial government shutdown over the weekend while the House awaits a funding deal negotiated by Trump and Democrats. The lapse is expected to be short, with lawmakers returning Monday.
Attention now turns to the January U.S. jobs report later this week, which will be weighed against Federal Reserve views that the labor market has stabilized after a pronounced hiring slowdown in the second half of 2025. Payrolls are expected to rise by 68,000, the strongest gain in four months, according to the median estimate in a Bloomberg survey. The release will also include annual benchmark revisions, drawing on data from the Bureau of Labor Statistics.
On Wall Street, markets are watching earnings from Walt Disney Co., Palantir Technologies Inc. and Teradyne, Inc.
—Equities Friday and weekly change:
| Equity Index | Closing Price Jan. 30 | Point change from Jan. 29 | % Difference from Jan. 29 | Weekly Change |
| Dow | 48,892.47 | -179.0 | -0.36% | -0.42% |
| Nasdaq | 23,461.82 | -223.30 | -0.94% | -0.17% |
| S&P 500 | 6,939.03 | -29.98 | -0.43% | +0.34% |
—Tyson Foods topped Wall Street expectations, sending its shares higher in premarket trading after the company posted better-than-expected sales and earnings for the first quarter. Tyson reported net sales of $14.31 billion, exceeding forecasts, while earnings per share came in at 97 cents, ahead of expectations of about 95 cents. The company reaffirmed its full-year outlook, projecting fiscal-year sales growth of 2% to 4%, in line with expectations, and attributed the strong results primarily to robust demand for chicken.
| AG MARKETS |
—USDA’s Cattle Inventory confirms a tighter supply story — with uneven signals for 2026
Jan. 30 report underscores record-low herd size, cautious heifer retention, and a slower-than-hoped path to expansion
USDA’s annual Cattle Inventory report released Jan. 30 didn’t deliver many surprises — but it did remove any lingering doubt about the depth and persistence of the current cattle cycle. The U.S. cattle herd is now firmly entrenched at its smallest level in decades, and the data suggest that a meaningful rebuilding phase remains a story for later, not sooner.
At the headline level, total cattle and calves in the U.S. continue to grind lower, reflecting years of drought, elevated input costs, and aggressive liquidation. Beef cow numbers fell again, reinforcing that the supply contraction is structural, not merely weather-related. Even as grazing conditions improved in parts of the Plains and Corn Belt last year, the industry largely chose balance-sheet repair over rapid expansion.
Heifer signals: stabilization, not acceleration. One of the most closely watched metrics — beef replacement heifers — showed only marginal improvement. That matters. True herd expansion doesn’t begin until producers retain heifers in sufficient numbers to grow the breeding base. The Jan. 30 figures suggest producers are pausing liquidation, but they are not yet committing capital to growth. High interest rates, lingering drought risk in the Southern Plains, and uncertainty around feed costs are keeping expansion cautious and incremental.
This “wait-and-see” posture also reflects market discipline. With fed cattle prices near record highs and margins strong for many cow-calf operators, there is little urgency to expand quickly — especially when history has taught producers how painful mistimed expansions can be.
Short-term bullish, medium-term complicated. From a market perspective, the report reinforces a bullish supply backdrop into early 2026. Fewer calves today mean fewer feeder cattle tomorrow and a tighter slaughter mix down the road. That supports elevated cattle prices and firm wholesale beef values, particularly if consumer demand holds up better than expected.
But the medium-term outlook is more nuanced. Slower herd rebuilding means the eventual expansion phase could be longer and flatter, rather than a sharp rebound. That reduces the risk of a sudden supply glut later this decade — but it also implies continued price volatility as weather, feed, and macroeconomic conditions interact with an already thin supply cushion.
Policy and trade crosscurrents loom larger. The tight inventory picture also raises the stakes for trade and regulatory policy. With domestic supplies constrained, imports — particularly lean trim — remain critical to beef processing margins. At the same time, export competitiveness will increasingly hinge on exchange rates, market access, and geopolitical stability. Any policy shocks, from trade disputes to animal-health disruptions, would hit a market with little slack.
Bottom Line: The Jan. 30 Cattle Inventory report confirms that the U.S. cattle industry is still in the contraction chapter of the cycle. Liquidation may be slowing, but expansion is not yet underway in a meaningful way. For producers, that supports disciplined optimism. For markets, it signals continued tightness — and for policymakers, it underscores how little margin for error exists when cattle numbers are already at historic lows.
—Agriculture markets Friday and the weekly change
| Commodity | Contract Month | Closing Price Jan. 30 | Change from Jan. 29 | Weekly Change |
| Corn | March | $4.28 1/4 | -2 1/2¢ | -2 1/4¢ |
| Soybeans | March | $10.64 1/4 | -8¢ | -3 1/2¢ |
| Soybean Meal | March | $293.60 | -$2.40 | -$6.30 |
| Soybean Oil | March | 53.51¢ | -52 pts | -48 pts |
| SRW Wheat | March | $5.38 | -3 1/2¢ | +8 1/2¢ |
| HRW Wheat | March | $5.44 3/4 | -2 1/4¢ | +4¢ |
| Spring Wheat | March | $5.78 1/4 | -3 1/4¢ | +3 1/4¢ |
| Cotton | March | 63.17¢ | -31 pts | -64 pts |
| Live Cattle | April | $236.325 | -47 1/2¢ | -12 1/2¢ |
| Feeder Cattle | March | $360.275 | -$4.85 | +10¢ |
| Lean Hogs | April | $95.15 | -30¢ | -$1.025 |
| ENERGY MARKETS & POLICY |
—Monday: Oil slides as Trump signals Iran talks, easing supply fears
Brent and WTI drop more than 5% as geopolitical risk premium unwinds after January surge
Oil prices fell sharply on Monday after President Donald Trump said Iran was “seriously talking” with Washington, a signal investors read as de-escalation with a key OPEC producer and reduced risk of supply disruptions.
Brent crude futures slid $3.63, 5.2%, to $65.69 a barrel, while U.S. West Texas Intermediate fell $3.60, or 5.5%, to $61.61 by mid-morning in London. The pullback followed January’s biggest monthly gains since 2022 — Brent up 16% and WTI up 13% — driven largely by fears of military escalation involving Iran that now appear to be receding.
Analysts pointed to easing geopolitical tensions and improving supply conditions. UBS analyst Giovanni Staunovo said the absence of further Middle East escalation, alongside fewer supply disruptions in the U.S. and Kazakhstan, weighed on prices. Trump’s weekend comments echoed remarks from Iran’s top security official Ali Larijani that arrangements for negotiations were underway.
The selloff was compounded by a broader commodities retreat, led by sharp losses in gold and silver, and reinforced by a stronger U.S. dollar.
Supply-side caution also returned to the foreground. OPEC+ agreed Sunday to keep output unchanged for March, after previously freezing planned increases through March 2026 due to seasonally weaker demand. With tensions easing, concerns that global supply could outpace demand have resurfaced.
—Friday: Oil holds near six-month highs as Iran tensions sustain risk premium
Geopolitical uncertainty, fresh U.S. sanctions, and a stronger dollar temper gains after a sharp run-up
Oil prices edged slightly lower Friday, consolidating recent gains but holding near six-month highs as persistent tensions between the United States and Iran continued to underpin the market.
Brent crude futures settled at $70.69 a barrel, down just 2 cents, 0.03%, while U.S. West Texas Intermediate ended at $65.21 a barrel, down 21 cents, or 0.32%.
Prices had climbed to their highest levels since early August a day earlier after reports that President Donald Trump was weighing potential actions against Iran, including targeted strikes, reviving fears of supply disruptions. While Washington and Tehran have since signaled openness to dialogue, Iran said Friday that its defense capabilities would not be part of any talks, keeping uncertainty firmly in place.
Analysts said oil markets remain overwhelmingly driven by geopolitical risk tied to Iran. A sizable risk premium is already priced in, but uncertainty over whether military action could occur — and how Iran might respond — has made additional upside difficult to quantify. Some of the week’s gains also stalled on tentative hopes for a Russia–Ukraine ceasefire and speculation that an attack on Iran may ultimately be avoided as diplomatic channels reopen.
The U.S. added fresh sanctions Friday, targeting seven Iranian nationals and at least one entity, reinforcing Washington’s hard line even as it leaves room for negotiations. Meanwhile, a firmer U.S. dollar added mild pressure after Trump said he plans to nominate former Federal Reserve governor Kevin Warsh to replace Jerome Powell when Powell’s term ends in May. A stronger dollar typically weighs on oil by making it more expensive for buyers using other currencies.
Supply-side developments also capped sentiment. U.S. crude output has been recovering following weather-related shutdowns earlier in the week, while Kazakhstan is edging closer to resuming production at the Tengiz oilfield. With prices posting solid weekly gains, analysts said some profit-taking ahead of the weekend was expected.
Looking ahead, Russia is expected to enter peak refinery maintenance later this month and again in September, which could affect product markets but is unlikely to materially tighten crude supply. A Reuters poll of analysts shows most expect oil prices to hover near $60 a barrel this year, as the risk of global oversupply offsets the threat of disruptions from ongoing geopolitical tensions.
—Trump administration schedules oil, gas lease sale in Alaska’s Cook Inlet. The Trump administration will hold an oil and gas lease sale in Alaska’s Cook Inlet in March, offering roughly 1 million acres, the Interior Department said. Bids are due March 3, with winning bidders to be announced March 4, according to the Bureau of Ocean Energy Management. The sale is the first of six lease sales required under the One Big Beautiful Bill Act (OBBBA).
| TRADE POLICY |
—Supreme Court silence on Trump’s tariffs is becoming a signal of its own
A long delay in the high-stakes tariffs case may be quietly improving President Trump’s odds — or at least blunting the impact of a loss.
In a Washington Post opinion column, Jason Willick, an opinion writer at newspaper, examines the Supreme Court’s unusually long delay in ruling on the legality of Donald Trump’s global tariffs, arguing that each passing week without a decision subtly strengthens the administration’s position — even if it still appears likely to lose on the merits.
Willick opens by contrasting the current tariffs case with Youngstown Sheet & Tube Co. v. Sawyer, the 1952 steel-seizure case in which the Supreme Court moved with remarkable speed to block President Harry Truman’s assertion of emergency powers. In that episode, the justices ruled just three weeks after oral argument. By comparison, more than three months have passed since the Court heard arguments in Learning Resources Inc. v. Trump, with no decision yet in sight.
Based on oral arguments, Willick notes, the Trump administration appears to be the underdog. The president is relying on the 1977 International Emergency Economic Powers Act (IEEPA) to justify sweeping tariffs, even though the Constitution assigns taxing authority to Congress and the statute does not explicitly mention tariffs. Recent Supreme Court precedents emphasize that Congress must speak clearly when delegating broad economic powers — a standard the IEEPA may not meet.
The delay itself, however, is the mystery. Willick points out that the Court has shown it can act quickly when it wants to, including a January 2025 TikTok ruling issued just a week after argument. Treasury Secretary Scott Bessent had publicly expected a January decision, and court watchers were caught off guard when no opinion appeared.
That uncertainty, Willick argues, is already having real-world consequences. Businesses lack clarity, Congress cannot accurately project tariff revenue, and the Federal Reserve must guess how long tariffs will factor into inflation forecasts. Meanwhile, lower-court rulings against the tariffs have been stayed, allowing them to remain in force throughout the litigation.
Willick suggests several explanations: the possibility of multiple concurring or dissenting opinions, institutional caution given the case’s political sensitivity, or even an effort to craft a compromise ruling that limits tariffs prospectively without triggering massive refund claims. He also notes that Trump’s use of tariffs as a foreign-policy tool — including recent threats toward Europe — could make the Court more hesitant to intervene in what it views as executive diplomacy.
The column closes with a cautious forecast. While Willick still sees a clear Trump victory as unlikely — given the views of the liberal justices, Justice Neil Gorsuch’s separation-of-powers concerns, and Chief Justice John G. Roberts Jr.’s sensitivity to the Court’s reputation — the prolonged silence reduces the chances of a swift, decisive rebuke. The longer the status quo holds, he concludes, the greater the odds that the Court opts for a narrower, messier outcome — and the greater the damage caused by delay.
| POLITICS & ELECTIONS |
— Trump downplays Texas Senate upset as Democrats claim momentum
President distances himself from loss in deep-red district even after backing GOP candidate
President Donald Trump sought to minimize the political significance of a surprise Texas state Senate election loss after Democrat Taylor Rehmet flipped a district the president carried by 17 points in 2024. Trump said the race was a local contest and not “transferable” to his presidency, telling reporters, “I’m not involved with that. I’m not on the ballot.”
The upset came despite Trump’s late push for Republican nominee Leigh Wambsganss, whom he praised publicly and urged supporters to back in the Fort Worth–area district. Coverage from Associated Press and Reuters noted the president’s endorsement and get-out-the-vote appeals in the days leading up to the special election.
Democrats quickly framed Rehmet’s win as evidence of growing strength in traditionally Republican territory, with New York Times and Reuters reporting party leaders see rising momentum ahead of November’s midterms, when control of Congress is at stake. Bloomberg emphasized that Rehmet and Wambsganss will face off again in November for a full four-year term, but said even a temporary party flip signals potential voter unease with some Trump policies.
Republicans privately acknowledged concern. The Wall Street Journal described the result as a “wake-up call,” noting a roughly 31-point leftward swing compared with Trump’s 2024 performance. An analysis by CNN highlighted Tarrant County’s bellwether status and suggested the result could fuel Democratic hopes of broader statewide gains, including a competitive U.S. Senate race.
A Wall Street Journal editorial went further, attributing the upset to voter backlash against the Trump administration — particularly over high-profile immigration enforcement — arguing that visible street-level crackdowns are alienating swing voters critical to the midterm outcome.
—Fox News poll shows Democrats with six-point edge on generic House ballot
Survey finds Democrats posting historic advantage and gains on key issues, even as midterm headwinds persist for party in power
A new Fox News poll suggests Democrats have opened a notable lead over Republicans on the generic congressional ballot as the 2026 midterm cycle begins to take shape.
According to the survey of 1,005 registered voters conducted Jan. 23–26, Democrats lead Republicans by six points, 52 percent to 46 percent. Fox News described the margin as the highest recorded for any party on that question in the history of the poll.
The results also show Democrats making sizable gains across a range of policy areas. Respondents favored Democrats over Republicans by 14 points on affordability, 21 points on health care, and 14 points on helping the middle class. Democrats also held wide advantages on transgender issues, by 22 points, and narrowly led Republicans on taxes by one point.
The New York Post characterized the findings as evidence that Democrats “seem to be getting their mojo back” heading into the midterm season. At the same time, the report noted the broader historical context: the party controlling the White House has typically lost seats in the House during midterm elections, with only two exceptions since 1938 — a dynamic that continues to shape expectations for the 2026 contest.
| FOOD POLICY & FOOD INDUSTRY |
—Policy, pharma, and global surplus put U.S. sugar at a crossroads
School-meal sugar limits, GLP-1 adoption, and weaker ethanol pull abroad are converging to pressure demand and margins across the U.S. sugar sector
A broad, near-term collapse across U.S. sugar growing and processing is not the base case — the policy-managed structure still buffers the industry from world-price shocks. But a contraction cycle in the form of selective consolidation, plant rationalization, and grower attrition in higher-cost areas is a credible 2026–27 risk if three drags align:
1.) global surplus pressure keeps the “outside option” cheap,
2.) domestic demand growth flattens (nutrition standards + reformulation), and
3.) GLP-1 adoption trims discretionary intake in key sugar-heavy categories.
USDA’s current baseline still shows deliveries for human consumption holding steady (i.e., not yet a demand break) — which is why “selective stress” is the better framing than “industry-wide contraction.”
What’s happening now in the official numbers
USDA’s January 2026 Sugar and Sweeteners Outlook keeps deliveries for human consumption unchanged at 12.048 million STRV for 2025/26, while overall use is trimmed on lower expected exports (mainly to Mexico).
That combination (steady domestic deliveries + weaker exports) is consistent with margin pressure showing up first in trade flows and competition, before it shows up as a visible domestic demand decline.
The pressure points
1) Global supply up, prices down
If world prices stay soft because exportable supply rises, the U.S. system can still be pressured through politics (import/consumer-price scrutiny), refiners’ margins, and competition for share — even if the U.S. is not a pure world-price taker. USDA’s WASDE remains the anchor for the U.S. balance sheet.
2) Government-program sugar limits
This is the most mechanically certain demand headwind, because it is already scheduled:
• Starting SY 2025–26 (July 1, 2025), added-sugars limits apply to breakfast cereals, yogurt, and flavored milk in school meals;
• In SY 2027–28, the rule tightens further with a weekly calories cap from added sugars.
That does not instantly shrink total sugar demand — but it accelerates reformulation and can pull sugar out of specific high-volume channels.
3) GLP-1 adoption and food purchasing behavior
GLP-1s look like a slow-drip demand reducer — not a one-quarter shock — but the evidence is getting more concrete. One 2025 study summary out of Cornell University reports that within six months of starting a GLP-1, households reduced grocery spending (and also reduced limited-service restaurant spending).
Separately, survey-based work (including Purdue’s Consumer Food Insights) points to lower food spending and shifts away from some categories among GLP-1 users.
For sugar, the key isn’t “do GLP-1 users eat less?” (they do) — it’s how much penetration and persistence you get across the broader population, and whether reduced discretionary consumption shows up in the categories that are heavy sugar users.
4) Lower oil prices, less diversion to ethanol in India / Brazil, more sugar for export
The logic: if ethanol economics weaken, more cane can be oriented toward sugar (and exports). USDA’s global balance sheet (via WASDE) is the best “official” place to monitor whether that extra exportable volume is materializing month to month.
The practical U.S. impact is mostly indirect — world-price pressure and trade politics, not direct U.S. pricing parity.
Scenario framework for 2026–27
Base case: “Managed stability, selective stress”
Domestic deliveries stay roughly flat (USDA baseline), reformulation is gradual, exports remain the pressure valve. Outcome: more intense competition for share and continued consolidation at the margin, not a sweeping contraction.
Bear case: “Demand flattens + surplus persists”
Triggers:
• school-meal sugar limits bite harder than expected across product formulations,
• GLP-1 penetration accelerates and persists,
• world surplus keeps raw sugar cheap and politically salient.
Outcome: processor margin squeeze → plant rationalization → grower exits in higher-cost regions, plus consolidation in refining and marketing.
Bull case: “Demand resilience + policy drag is manageable”
Triggers:
• GLP-1 behavioral changes stay concentrated in a subset of consumers (lower persistence),
• reformulation offsets volume loss (more products, smaller sugar reductions),
• trade flows stay orderly.
Outcome: little structural contraction, mostly tactical M&A and efficiency capex.
8 indicators that would confirm contraction is underway
1. USDA domestic deliveries: two or more consecutive downward revisions (not just exports).
2. Ending stocks and stocks-to-use rising persistently in USDA tables (sign of oversupply versus demand).
3. Processor announcements: idlings, closures, “strategic reviews,” capex deferrals.
4. Grower economics: widening regional cost gaps and lower beet/cane returns relative to alternatives.
5. Refiner margin signals: widening discounts, higher inventories, weaker contract terms.
6. School meals compliance: reformulation progress and procurement shifts tied to added-sugars limits.
7. GLP-1 penetration / spending data: continued evidence of sustained reductions in relevant categories.
8. World balance sheet trend: repeat confirmation of surplus conditions in WASDE and major consultancies.
Implications by segment
Beet growers and beet processors. Most exposed to regional cost differences and plant-level scale economics. In a bear case, they tend to see earlier rationalization in the highest-cost areas.
Cane growers and cane mills: Exposure depends on regional yields, labor/energy costs, and marketing structure. Less about a sudden shutdown, more about consolidation and contract pressure if demand softens.
Refiners: Refiners get squeezed when demand growth stalls and competition rises — especially if the market has to clear more supply through exports or if policy scrutiny increases.
Bottom Line: A contraction cycle is plausible, but most see it as selective consolidation and capacity rationalization, not an across-the-board collapse. The tell will be when USDA domestic deliveries finally start to trend down (not just exports) while global surplus stays in place.
| WEATHER |
— NWS outlook: Extreme Cold/Freeze Warnings remain in effect early this morning across much of Florida into southern Georgia/Alabama, portions of the Carolinas and southeastern Louisiana before a gradual moderating trend sets in… …A series of Alberta clippers will spread light snow across the Great Lakes today, and periods of light snow/wintry mix across the Northern Plains for the next couple of days… …A frontal wave will bring increasing chance of showers and embedded thunderstorms across the South and light snow across the Ohio Valley on Tuesday, spreading east into the Mid-Atlantic Tuesday night/Wednesday morning.
