The S&P 500 Index ($SPX) (SPY) closed down -0.51% on Wednesday, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.53%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.77%. E-mini S&P March futures (ESH26) fell -0.44% and E-mini Nasdaq March futures (NQH26) fell -1.69%.
Stock indexes closed mixed on Wednesday, with the S&P 500 falling to a two-week low and the Nasdaq 100 falling to a seven-week low. Investors dumped high-end chip makers and AI infrastructure stocks on Wednesday, putting pressure on the broader market. Advanced Micro Devices plunged more than -17%, leading chipmakers lower after analysts said the company’s first-quarter sales forecast was seen as weak.
On the positive side, Super Micro Computer closed up more than +13% after forecasting third-quarter net sales well above expectations. Additionally, Amgen closed up more than +8% to lead the Dow Jones Industrials higher after reporting better-than-expected fourth-quarter revenue.
Wednesday’s US economic news was mixed for stocks. January ADP Employment Change increased by +22,000, below expectations of +45,000. In contrast, the January ISM services index was unchanged at 53.8, stronger than expectations for a drop to 53.5.
Market sentiment improved on Wednesday, following the end of the partial US government shutdown after President Trump signed a deal late Tuesday to fund the government. The funding package only funds the Department of Homeland Security through Feb. 13, while the rest of the government receives funding through Sept. 30, the end of the fiscal year.
The Treasury announced Wednesday that next week’s quarterly redemption will total $125 billion in sales of Treasury notes and bonds, right in line with expectations, and said it anticipates keeping auction sizes for nominal notes, bonds and floating-rate notes unchanged “for at least the next few quarters.”
US MBA mortgage applications fell -8.9% in the week ending January 30, with the mortgage purchase subindex down -14.4% and the refinance subindex down -4.7%. The average 30-year fixed-rate mortgage fell -3 bp to 6.21% from 6.24% the previous week.
This week the markets will focus on earnings and economic news. On Thursday, initial weekly jobless claims are expected to increase by 3,000 to 212,000. On Friday, the University of Michigan’s January Consumer Confidence Index is expected to fall -1.4 points to 55.0.
Fourth-quarter earnings season is in full swing, with 150 of the S&P 500 companies scheduled to report results this week. Earnings have been a positive factor for stocks, with 81% of the 237 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, marking the 10th consecutive quarter of year-over-year growth. Excluding the Magnificent Seven mega-cap tech stocks, Q4 earnings are expected to increase +4.6%.
Markets are pricing in a 10% chance of a -25bp rate cut at the next policy meeting on March 17-18.
Foreign stock markets closed mixed on Wednesday. The Euro Stoxx 50 closed down -0.41%. China’s Shanghai Composite closed up +0.85%. Japan’s Nikkei Stock 225 closed down -0.78%.
Interest rates
March 10-year Treasury bonds (ZNH6) closed up +0.5 points on Wednesday. The 10-year Treasury yield rose +0.8 bps to 4.274%. Treasuries settled little changed on Wednesday. Weakness in stocks supported Treasuries along with Wednesday’s January ADP report showing U.S. companies added fewer jobs than expected, a dovish factor for Federal Reserve policy.
Wednesday’s better-than-expected January ISM services report was negative for Treasury prices. Additionally, supply pressures should limit the near-term rise in Treasuries as the Treasury will auction $125 billion in Treasuries and Treasury bonds in next week’s quarterly redemption.
Treasuries also have some negative carryover from last Friday, when President Trump nominated Keven Warsh as the next chairman of the Federal Reserve. Warsh is seen as more hawkish than other Fed chair candidates and often emphasized inflation risks during his tenure as Fed governor from 2006 to 2011.
European government bond yields were mixed on Wednesday. The 10-year German bond yield fell -3.2 bp, to 2.859%. The 10-year UK bond yield rose +2.9 bps to 4.546%.
The eurozone’s January core CPI was revised down by -0.1% year-on-year to +2.2% year-on-year from the previously reported +2.3% year-on-year, the slowest pace of increase in four years.
The Eurozone S&P January Composite PMI was revised down by -0.2 to 51.3 from the previously reported 51.5.
The Eurozone December PPI fell -0.3% MoM and -2.1% YoY, right as expected, with the -2.1% YoY drop being the steepest YoY drop in 14 months.
Swaps price in a 1% chance that the ECB will raise rates by +25 bps at Thursday’s policy meeting.
US Stock Engines
Chipmakers and AI infrastructure stocks sold off sharply on Wednesday, weighing on the broader market. Advanced Micro Devices (AMD) closed down more than -17% to lead the losers on the Nasdaq 100 after forecasting first-quarter sales of $9.8 billion, plus or minus $300 million, below some projections of around $10 billion. Additionally, Sandisk (SNDK) closed down more than -16% and Micron Technology (MU) closed down more than -9%. Additionally, Lam Research (LRCX) closed down more than -8% and Western Digital (WDC) closed down more than -7%. Finally, Applied Materials (AMAT) and Seagate Technology Holdings Plc (STX) closed down more than -6%, and Nvidia (NVDA), ASML Holding NV (ASML), KLA Corp (KLAC), and Broadcom (AVGO) closed down more than -3%.
The decline of advanced microdevices raised concerns about AI demand and affected manufacturers of electrical equipment and data center products. Amphenol (APH) closed down more than -11%, and Vistra Corp (VST) and Constellation Energy (CEG) closed down more than -6%. Additionally, GE Vernova (GEV) closed down more than -4%, and Vertiv Holdings (VRT) and Hubbell (HUBB) closed down more than -3%.
Cryptocurrency-exposed stocks fell on Wednesday after Bitcoin (^BTCUSD) fell more than -3%. Galaxy Digital Holdings (GLXY) and MARA Holdings (MARA) closed down more than -8%, and Riot Platforms (RIOT) closed down more than -7%. Additionally, Coinbase Global (COIN) closed down more than -6% and Strategy (MSTR) closed down more than -2%.
Boston Scientific (BSX) closed down more than -17% to lead losers in the S&P 500 after forecasting full-year adjusted earnings per share between $3.43 and $3.49, the midpoint below the $3.47 consensus.
Cencora Inc (COR) closed down more than -8% after reporting first-quarter revenue of $85.93 billion, missing the consensus of $86.18 billion.
T Rowe Price Group (TROW) closed down more than -5% after reporting fourth-quarter adjusted EPS of $2.44, weaker than the consensus of $2.47.
Uber Technologies (UBER) closed down more than -4% after forecasting first-quarter adjusted EBITDA between $2.37 and $2.47, the midpoint below the $2.45 consensus.
Silicon Laboratories (SLAB) closed with a gain of more than +49% after agreeing to be acquired by Texas Instruments for $7.5 billion, or $231 in cash per share.
Super Micro Computer (SMCI) closed up more than +13% to lead gains in the S&P 500 after forecasting third-quarter net sales of at least $12.3 billion, well above the consensus of $10.25 billion.
Eli Lilly (LLY) closed up more than +10% after reporting fourth-quarter revenue of $19.29 billion, stronger than the consensus of $18.01 billion, and forecasting full-year revenue of $80 billion to $83 billion, above the consensus of $77.71 billion.
Fortive Corp (FTV) closed up more than +10% after forecasting 2026 adjusted earnings per share of between $2.90 and $3, stronger than the consensus of $2.85.
Amgen (AMGN) closed up more than +8% to lead gains in the Dow Jones industrials after reporting fourth-quarter revenue of $9.87 billion, better than the consensus of $9.46 billion.
MGM Resorts International closed up +8% after reporting its BetMGM joint venture had $2.8 billion in net revenue for fiscal 2025, up +33% year-over-year.
Johnson Controls International Plc (JCI) closed up more than +4% after reporting first-quarter net sales of $5.8 billion, ahead of the consensus of $5.64 billion.
Earnings Reports (5/2/2026)
Amazon.com Inc (AMZN), Ares Management Corp (ARES), Atlassian Corp (TEAM), Bristol-Myers Squibb Co (BMY), Camden Property Trust (CPT), Cardinal Health Inc (CAH), Carrier Global Corp (CARR), Cigna Group/The (CI), CMS Energy Corp (CMS), ConocoPhillips (COP), Cummins Inc (CMI), Dayforce Inc (DAY), Digital Realty Trust Inc (DLR), Equity Residential (EQR), Estee Lauder Cos Inc/The (EL), Fortinet Inc (FTNT), Gen Digital Inc (GEN), Hershey Co/The (HSY), Huntington Ingalls Industries (HII), Intercontinental Exchange Inc (ICE), IQVIA Holdings Inc (IQV), KKR & Co Inc (KKR), Linde PLC (LIN), Mettler-Toledo International Inc (MTD), Microchip Technology Inc (MCHP), Molina Healthcare Inc (MOH), Monolithic Power Systems Inc (MPWR), News Corp (NWSA), Ralph Lauren Corp (RL), Regency Centers Corp (REG), Rockwell Automation Inc (ROK), Snap-on Inc (SNA), Strategy Inc (MSTR), Tapestry Inc (TPR), Thomson Reuters Corp (TRI), Ventas Inc (VTR), VeriSign Inc (VRSN), WEC Energy Group Inc (WEC), Xcel Energy Inc (XEL).
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
