The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +0.41%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.83% and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.88%. March E-mini S&P futures (ESH26) rose +0.42% and March E-mini Nasdaq futures (NQH26) rose +0.89%.
Stock indexes closed mostly higher on Tuesday, with the S&P 500 hitting a new all-time high and the Nasdaq 100 hitting a 2.75-month high. Strength in chipmakers and AI infrastructure stocks propelled the broader market higher on Tuesday, after Micron Technology rose more than 5% after saying it plans to invest $24 billion in Singapore and expand its memory chip capacity. Additionally, strong fourth-quarter corporate earnings results are supporting the stock. Stocks maintained their gains Tuesday despite an unexpected drop in the Conference Board’s January U.S. consumer confidence index to an 11.5-year low.
Weakness in health insurance stocks weighed on the Dow Jones Industrials on Tuesday after the U.S. government proposed keeping payments to private Medicare plans flat next year. Health insurers widened their losses after UnitedHealth Group forecast a decline in revenue by 2026, the first annual contraction in more than 30 years.
Stocks are also being pressured by President Trump’s new threat to impose 100% tariffs on US imports from Canada, the possibility of a US government shutdown over ICE funding, lingering concerns about Greenland, and disruptions to business and travel due to the massive storm the US just hit. Additionally, there is political uncertainty over the Federal Reserve as the FOMC is expected to leave rates unchanged at its meeting this week, which could lead to new threats from Trump for refusing to cut rates further.
The risk of another partial government shutdown is negative for stocks. Senate Democrats threatened to block a government funding deal on Department of Homeland Security/ICE funding after the ICE shooting of an ICU nurse in Minnesota on Saturday. There could be a partial government shutdown when the current interim funding measure expires this Friday.
ADP reported that U.S. private payrolls rose an average of 7,750 per week in the four weeks ending Jan. 3, the smallest weekly increase in six weeks.
The US November S&P Composite 20 Home Price Index rose +1.39% YoY, stronger than expectations of +1.20% YoY.
The US Conference Board’s January Consumer Confidence Index unexpectedly fell -9.7 to an 11.5-year low of 84.5, weaker than expectations for a rise to 91.0.
The Richmond Fed’s January US Manufacturing Survey rose from +1 to -6, slightly below expectations of -5.
The market’s focus this week will be on new tariff news and the prospects for a continuing resolution (CR) to fund the government. The FOMC on Wednesday is expected to keep the federal funds target range unchanged at 3.50%-3.75%. Fed Chair Powell’s post-meeting comments on Wednesday will also be scrutinized for clues about the future of Fed policy. On Thursday, initial weekly jobless claims are expected to rise by 5,000 to 205,000. Additionally, third quarter non-farm productivity is expected to remain unrevised at 4.9%. Additionally, the November trade deficit is expected to widen to -$44.1 billion. Finally, November factory offers are expected to increase +1.6% mom. On Friday, December PPI final demand is expected to decline to +2.8% YoY from +3.0% YoY in November, and December PPI excluding food and energy is expected to decline to +2.9% YoY from +3.0% YoY in November. Additionally, the January Chicago PMI MNI is expected to rise +0.8 to 43.5.
Fourth-quarter earnings season is in full swing, with 102 of the S&P 500 companies scheduled to report results this week. Microsoft, Meta Platforms and Tesla report earnings results after the close on Wednesday, and Apple reports after the close on Thursday. Earnings have been a positive factor for stocks, with 81% of the 83 S&P 500 companies reporting 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%.
Markets are pricing in a 3% chance of a -25bp rate cut at this week’s FOMC meeting on Tuesday and Wednesday (January 27-28).
Foreign stock markets closed higher on Tuesday. The Euro Stoxx 50 hit a one-week high and closed up +0.62%. China’s Shanghai Composite closed up +0.18%. Japan’s Nikkei Stock 225 closed up +0.85%.
Interest rates
March 10-year Treasuries (ZNH6) closed down -1 tick on Tuesday. The 10-year Treasury yield rose +1.2 bps to 4.223%. Strength in stocks on Tuesday weighed on Treasuries. Additionally, weak demand from the Treasury’s auction for $70 billion in five-year Treasuries undermined Treasury bond prices, as the auction had a bid-to-cover ratio of 2.34, below the 10-auction average of 2.36. Losses in Treasuries were limited on Tuesday after the US consumer confidence index for January unexpectedly fell to an 11.5-year low.
European government bond yields rise on Tuesday. The 10-year German bond yield rose +0.8 bp to 2.875%. The 10-year UK bond yield rose to a three-week high of 4.527% and ended up +2.8 bps at 4.525%.
New car registrations in the eurozone in December increased by +5.8% year-on-year, the sixth consecutive month of increases.
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
Shares of AI chip and infrastructure makers rose on Tuesday. Lam Research (LRCX) closed up more than +6% to lead gains on the Nasdaq 100, and Micron Technology (MU) closed up more than +5% after saying it plans to invest $24 billion in Singapore and expand its memory chip capacity. Additionally, Western Digital (WDC), Seagate Technology Holdings Plc (STX), KLA Corp (KLAC), and Applied Materials (AMAT) closed with gains of more than +4%. Additionally, Intel (INTC) closed with gains of more than +3%, and ASML Holding NV (ASML) and Broadcom (AVGO) closed with gains of more than +2%.
Magnificent Seven tech stocks rose on Tuesday, providing support to the broader market. Amazon.com (AMZN) and Microsoft (MSFT) closed with gains of more than +2%, and Apple (AAPL) and Nvidia (NVDA) closed with gains of more than +1%. Additionally, Alphabet (GOOGL) closed up +0.39% and Meta Platforms (META) closed up +0.09%. Bucking the trend, Tesla (TSLA) closed down -0.99%.
Health insurance stocks fell on Tuesday after the US government proposed keeping payments to private Medicare plans flat next year. Humana (HUM) closed down more than -21% to lead losers in the S&P 500, and UnitedHealth Group (UNH) closed down more than -19% to lead losers in the Dow Jones Industrials after forecasting a decline in revenue by 2026, the first annual contraction in more than 30 years. Additionally, Elevance Health (ELV) and CVS Health (CVS) closed down more than -14%, and Alignment Healthcare (ALHC) closed down more than -12%. Additionally, Centene (CNC) closed down more than -10% and Molina Healthcare (MOH) closed down more than -8%.
Redwire Corp (RDW) closed with a gain of over +28% after receiving a contract award for the Missile Defense Agency’s Scalable Innovative Enterprise Layered Defense contract.
Corning (GLW) closed up more than +15% to lead gains in the S&P 500 after announcing a $6 billion multi-year deal with Meta Platforms to supply fiber optics, cable and connectivity solutions to Meta’s data centers.
CoreWeave (CRWV) closed up over +9% after Deutsche Bank upgraded the stock to buy from hold with a $140 price target.
General Motors (GM) closed up more than +8% after reporting fourth-quarter adjusted EPS of $2.51, better than the consensus of $2.28, and forecasting full-year adjusted EPS of $11.00 to $13.00, the midpoint above the consensus of $11.79.
HCA Healthcare (HCA) closed up more than +7% after reporting fourth-quarter net income of $1.88 billion, better than the consensus of $1.73 billion.
RTX Corp. (RTX) closed up more than +2% after reporting adjusted fourth-quarter sales of $24.24 billion, well above the consensus of $22.63 billion.
Sanmina (SANM) closed down more than -22% after forecasting second-quarter revenue of between $3.1 billion and $3.4 billion, weaker than the consensus of $3.51 billion.
Agilysys Inc. (AGYS) closed down more than -20% after reporting third-quarter adjusted EPS of 42 cents, weaker than the consensus of 46 cents.
Roper Technologies (ROP) closed down more than -9% to lead losers on the Nasdaq 100 after forecasting continuing operating 2026 adjusted EPS of between $21.30 and $21.55, below the consensus of $21.62.
Applied Industrial Technologies (AIT) closed down more than -7% after reporting second-quarter net sales of $1.16 billion, missing the consensus of $1.17 billion.
Brown & Brown (BRO) closed down more than -7% after reporting fourth-quarter revenue of $1.61 billion, missing expectations of $1.65 billion.
Earnings Reports (01/28/2026)
Amphenol Corp (APH), ASML Holding NV (ASML), AT&T Inc (T), Automatic Data Processing Inc (ADP), CH Robinson Worldwide Inc (CHRW), Corning Inc (GLW), Danaher Corp (DHR), Elevance Health Inc (ELV), Fair Isaac Corp (FICO), GE Vernova Inc (GEV), General Dynamics Corp (GD), International Business Machine (IBM), Lam Research Corp (LRCX), Las Vegas Sands Corp (LVS), Lennox International Inc (LII), Meta Platforms Inc (META), Microsoft Corp (MSFT), MSCI Inc (MSCI), NVR Inc (NVR), Otis Worldwide Corp (OTIS), Raymond James Financial Inc (RJF), ServiceNow Inc (NOW), Southwest Airlines Co (LUV), Starbucks Corp (SBUX), Tesla Inc (TSLA), Textron Inc (TXT), United Rentals Inc (URI), Waste Management Inc (WM).
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
