Stocks Mixed as Tech Stabilizes from Monday’s Rout

The S&P 500 Index ($SPX) (SPY) today is down -0.08%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.07%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.09%.  March E-mini S&P futures (ESH25) are down by -0.01%, and March E-mini Nasdaq futures (NQH25) are up by +0.30%. 

Stock indexes today are mixed, with the Dow Jones Industrials posting a 7-week high.  Nvidia and Marvell technology are moving higher as they recover some of Monday’s selloff. Some negative corporate news is weighing on the broader market, with General Motors down more than -8% due to concerns about tariff threats from President Trump.  Also, Lockheed Martin is down more than -7% after forecasting weaker-than-expected full-year EPS.

Today’s US economic news is better than expected and supportive of stocks.  Dec capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose +0.5% m/m, stronger than expectations of +0.3% m/m.  Also, the Nov S&P CoreLogic composite-20 home price index rose +4.33% y/y, stronger than expectations of 4.24% y/y.

President Trump’s tariffs on Monday night were negative for stocks when he said he wants to enact across-the-board tariffs on everything from steel and copper to semiconductor chips that are “much bigger” than 2.5%. 

The markets will look at the results of the 2-day FOMC meeting that ends on Wednesday and post-meeting comments from Fed Chair Powell.  Expectations are for the FOMC to keep the fed funds target range unchanged at 4.25%-4.50%.

Earnings season is in full swing as companies report Q4 earnings results.  Megacap technology stocks begin reporting earnings this week, with Microsoft and Tesla reporting on Wednesday and Apple reporting on Thursday.  According to Bloomberg Intelligence, analysts estimate S&P 500 earnings grew by +7.5% y/y in Q4, the second-highest pre-season forecast in the past three years.

The markets are discounting the chances at 1% for a -25 bp rate cut at the January 28-29 FOMC meeting.

Overseas stock markets today are mixed.  The Euro Stoxx 50 is up +0.46%.  China’s Shanghai Composite Index did not trade today and is closed through next Tuesday for the week-long Lunar New Year holiday.  Japan’s Nikkei Stock 225 closed down -1.39%.

Interest Rates

March 10-year T-notes (ZNH25) today are down -8 ticks.  The 10-year T-note yield is up +3.5 bp to 4.569%.  Mar T-notes today are under pressure as a stock rebound has reduced safe-haven demand for T-notes.  Also, Monday night’s comments from President Trump that he wants to raise tariffs across the board at “much bigger” than 2.5% stoked inflation concerns and weighed on T-notes.  In addition, supply pressures are bearish for T-notes as the Treasury will auction $30 billion of 2-year floating-rate notes and $44 billion of 7-year T-notes later today. 

European government bond yields today are moving higher.  The 10-year German bund yield is up +2.6 bp to 2.557%.  The 10-year UK gilt yield is up +1.1 bp to 4.597%.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at Thursday’s policy meeting.

US Stock Movers

Cruise operators are climbing today, led by a +6% jump in Royal Caribbean Cruises Ltd (RCL) to lead gainers in the S&P 500 after it forecast full-year adjusted EPS of $14.35-$14.65, stronger than the consensus of $14.32.  Carnival (CCL) and Norwegian Cruise Line Holdings Ltd (NCLH) are also up more than +2%. 

Invesco Ltd (IVZ) is up more than +6% after reporting Q4 operating revenue of $1.59 billion, stronger than the consensus of $1.47 billion.

Boeing (BA) is up more than +4% to lead gainers in the Dow Jones Industrials after CEO Ortberg said he’s optimistic the company can return to a production rate of thirty-eight 737 aircraft per month this year.

RTX Corp (RTX) is up more than +5% after reporting Q4 adjusted EPS of $1.54, better than the consensus of $1.39

Apple (AAPL) is up more than +2% to lead gainers in the Nasdaq 100 after Rosenblatt Securities said that going forward, “there is reason to expect positive developments in iPhone launches, AI capability ramp up, and a new antitrust approach from the Trump administration.”

Ciena Corp (CIEN) is up more than +2% after JP Morgan Chase upgraded the stock to overweight from neutral with a price target of $88. 

Vera Therapeutics (VERA) is up more than +1% after Goldman Sachs initiated coverage on the stock with a buy recommendation and a price target of $58.

Westlake Corp (WLK) is up more than +1% after Truist Securities initiated coverage on the stock with a buy recommendation and a price target of $168.

General Motors (GM) is down more than -8% to lead losers in the S&P 500 despite reporting a better-than-expected profit outlook due to concerns about tariff threats from President Trump.

Lockheed Martin (LMT) is down more than -7% after forecasting full-year EPS of $27.00-$27.30, weaker than the consensus of $27.82.

Synchrony Financial (SYF) is down more than -6% after reporting Q4 net interest income of $4.59 billion, below the consensus of $4.62 billion. 

Chip stocks and AI-infrastructure stocks are under pressure today for a second day after China’s artificial intelligence startup DeepSeek appears to provide comparable performance to Western chatbots at a fraction of the price, questions the sky-high valuations for AI-related stocks and the massive research and developmental spending business model.  As a result, Analog Devices (ADI) is down more than -3% to lead losers in the Nasdaq 100.  Also, Texas Instruments (TXN), Micron Technology (MU), and ASML Holding NV (ASML) are down more than -2%.   In addition, Advanced Micro Devices (AMD), Applied Materials (AMAT), Microchip Technology (MCHP), and NXP Semiconductors NV (NXPI) are down more than -1%. 

Polaris (PII) is down more than -8% after forecasting that 2025 adjusted EPS will fall -65% from 2024 to $1.14, well below the consensus of $3.06.

Sysco (SYY) is down more than -4% after reporting Q2 adjusted Ebitda of $969 million, weaker than the consensus of $979.5 million.

Graco Inc (GGG) is down more than -4% after reporting Q4 adjusted EPS of 64 cents, weaker than the consensus of 76 cents.

Paccar Inc (PCAR) is down more than -2% after reporting Q4 adjusted EPS of $1.66, below the consensus of $1.70.

Earnings Reports (1/28/2025)

Boeing Co/The (BA), BXP Inc (BXP), Chubb Ltd (CB), F5 Inc (FFIV), General Motors Co (GM), Invesco Ltd (IVZ), Kimberly-Clark Corp (KMB), Lockheed Martin Corp (LMT), NVR Inc (NVR), PACCAR Inc (PCAR), Packaging Corp of America (PKG), Royal Caribbean Cruises Ltd (RCL), RTX Corp (RTX), Starbucks Corp (SBUX), Stryker Corp (SYK), Synchrony Financial (SYF), Sysco Corp (SYY).