The S&P 500 Index ($SPX) (SPY) on Thursday closed up +0.55%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.63% and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.76%. March E-mini S&P futures (ESH26) rose +0.52% and March E-mini Nasdaq futures (NQH26) rose +0.72%.
Stock indexes on Thursday extended Wednesday’s relief rally as President Trump’s pivot toward Greenland continued. The demonstration gained momentum after the NATO chief provided additional details, saying the advance did not involve Greenland’s sovereignty. Strength in chipmakers, AI infrastructure stocks and Magnificent Seven technology stocks propelled the broader market higher on Thursday.
Stocks maintained their gains Thursday amid strong U.S. economic news. Weekly initial jobless claims rose by 1,000 to 200,000, beating expectations of 209,000. Additionally, third-quarter GDP was revised upward by 0.1% to 4.4% (quarter-on-quarter annualized), stronger than expectations for no change at 4.3%. Additionally, November personal spending rose +0.5% MoM, right in line with expectations, while November personal income rose +0.3% MoM, less than the +0.4% MoM expected. Finally, the November Core PCE Price Index, the Fed’s preferred inflation gauge, rose +0.2% MoM and +2.8% YoY, right in line with expectations.
Natural gas prices (NGG26) continued this week’s parabolic rally on Thursday, rising more than +3% to a three-year high, which is boosting natural gas producing stocks. Prices have risen more than 60% this week as an Arctic cold front will bring cold temperatures to much of the eastern US, boosting demand for heating and potentially causing well freezes and disrupting US natural gas production.
On Wednesday, President Trump said he would refrain from imposing tariffs on goods from European nations that oppose his effort to acquire Greenland. NATO Secretary General Rutte said progress was made in Greenland without discussing the territory’s sovereignty with President Trump, but instead focused on the broader issue of security in the Arctic region.
The market’s attention this week will be on economic news and any tariff developments, the next president of the Federal Reserve and Greenland. On Friday, the US S&P January Manufacturing PMI is expected to rise +0.2 to 52.0. Additionally, the University of Michigan’s final US consumer confidence index for January is expected to be unrevised and at 54.0.
Fourth-quarter earnings season begins in earnest this week, and so far it’s been a positive factor for stocks, with 81% of the 38 S&P 500 companies beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to increase +8.4% in the fourth quarter. Excluding the Magnificent Seven mega-cap tech stocks, Q4 earnings are expected to increase +4.6%.
On Tuesday, the Supreme Court did not rule on challenges to President Trump’s reciprocal tariffs. The court did not say when it will issue its next opinions, meaning it will likely be at least another month before ruling on the tariffs as the court begins a four-week recess.
Markets are pricing in the odds of a -25bp rate cut at the next FOMC meeting on January 27-28 at 5%.
Foreign stock markets closed higher on Thursday. The Euro Stoxx 50 closed up +1.25%. China’s Shanghai Composite hit a one-week high and closed up +0.14%. Japan’s Nikkei Stock 225 closed up +1.73%.
Interest rates
The March 10-year Treasury bond (ZNH6) closed down -2 ticks on Thursday. The 10-year Treasury yield rose +0.6 bps to 4.249%. Thursday’s strength in stocks dampened demand for safe-haven government debt securities and weighed on Treasury bond prices. Treasuries maintained modest losses after economic news on Thursday showed weekly jobless claims rose less than expected and third-quarter GDP was revised up. Losses in Treasuries were limited after the November core PCE price index, the Federal Reserve’s preferred inflation gauge, rose as expected.
Treasuries are also under pressure after President Trump last Friday expressed reluctance to name Keven Hassett as the next chairman of the Federal Reserve and said he would prefer to keep him as director of the National Economic Council. Markets viewed Hassett as the most dovish candidate and the leading contender for the nomination for Fed chair, so nominating someone like Kevin Warsh, a well-known hawk and the second most likely candidate for Fed chair, would be bearish for Treasury bond prices.
European government bond yields rose on Thursday. The 10-year German bond yield rose +0.5 bp to 2.888%. The 10-year UK bond yield rose to a two-week high of 4.495% and ended up +1.6bp at 4.474%.
The Eurozone consumer confidence index in January rose +0.8 to an 11-month high of -12.4, stronger than expectations of -13.0.
The swaps price in a 0% probability that the ECB will raise rates +25 bps at its next monetary policy meeting on February 5.
US Stock Engines
Chipmakers and AI infrastructure stocks rose on Thursday, lifting the broader market. Arista Networks (ANET) closed up more than +8% to lead gains in the S&P 500, and ARM Holdings Plc (ARM) closed up more than +5%. Additionally, ASML Holding NV (ASML) and Oracle (ORCL) closed with gains of more than +2%. Additionally, Micron Technology (MU), Seagate Technology Holdings (STX), and Advanced Micro Devices (AMD) closed with gains of more than +1%.
Magnificent Seven tech stocks rose on Thursday. Meta Platforms (META) closed up more than +5% and Tesla (TSLA) closed up more than +4%. Additionally, Amazon.com (AMZN) and Microsoft (MSFT) closed with gains of more than +1%. Additionally, Nvidia (NVDA) closed up +0.83%, Alphabet (GOOGL) closed up +0.66%, and Apple (AAPL) closed up +0.28%.
Datadog (DDOG) closed up more than +6% to lead gains on the Nasdaq 100 after Stifel upgraded the stock to buy from hold with a $160 price target.
Karman Holdings (KRMN) closed up more than +6% after Raymond James reiterated its strong buy rating on the stock and raised its price target to $130 from $100.
Northern Trust (NTRS) closed up more than +5% after reporting fourth-quarter net interest income of $654.3 million, above the consensus of $604.5 million.
Sphere Entertainment (SPHR) closed up more than +5% after BTIG upgraded shares to buy from neutral, with a $110 price target.
Venture Global (VG) closed with a gain of more than +4% after winning a lawsuit with Repsol SA for the sale of shipments of liquefied natural gas from its export plant in Louisiana.
Elanco Animal Health (ELAN) closed up more than +2% after Piper Sandler upgraded the stock to overweight from neutral with a $30 price target.
Abbott Laboratories (ABT) closed down more than -10% to lead losers in the S&P 500 after reporting fourth-quarter net sales of $11.46 billion, weaker than the consensus of $11.80 billion.
McCormick & Co (MKC) closed down more than -8% after forecasting full-year adjusted earnings per share of between $3.05 and $3.13, missing the consensus of $3.23.
General Electric (GE) closed down more than -7% after forecasting full-year adjusted operating profit between $9.85 billion and $10.25 billion, the midpoint below the consensus of $10.14 billion.
Huntington Bancshares (HBAN) closed down more than -6% after reporting a return on average assets of 0.93% in the fourth quarter, missing the consensus of 1.13%.
Mobileye (MBLY) closed down more than -3% after forecasting full-year revenue of $1.9 billion to $1.98 billion, below the consensus of $2 billion.
Qiagen NV (QGEN) closed down more than -2% after Deutsche Bank downgraded the stock to hold from buy.
Earnings Reports (01/23/2026)
Booz Allen Hamilton Holding Co (BAH), First Citizens BancShares Inc/ (FCNCA), SLB Ltd (SLB), Webster Financial Corp (WBS).
On the date of publication, Rich Asplund had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
