Stocks Supported by AI Investment and Strength in Miners

The S&P 500 Index ($SPX) (SPY) today is up +0.26%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.27%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.49%.  March E-mini S&P futures (ESH26) are up +0.23%, and March E-mini Nasdaq futures (NQH26) are up +0.47%.

Stock indexes are climbing today, with the S&P 500 posting a 1-week high.  Strength in chipmakers and data storage companies is leading the broader market higher. Mining stocks are also stronger, as copper prices soared to a new all-time high today, amid expectations that the Trump administration may introduce a tariff on refined copper, which has drawn huge volumes of inventory into the US, potentially leaving the rest of the world short of supplies.  US copper imports in December jumped to the highest since July. 

Strength in global equity markets is providing carryover support to US stocks after the Euro Stoxx 50 and the Nikkei Stock Index rose to new all-time highs today.

Slightly higher bond yields are negative for stocks today, with the 10-year T-note yield up by +2 bp to 4.18%.  Rising inflation expectations are pushing T-note yields higher as the 10-year breakeven inflation rate rose to a 1-month high today. 

Today’s US economic news was negative for stocks after the Dec S&P services PMI was revised downward by -0.4 to 52.5 from the previously reported 52.9.

Comments today from Richmond Fed President Tom Barkin were slightly hawkish, as he said he expects tax cuts and deregulation to lift growth this year and that the outlook for monetary policy remains in a "delicate balance" given the conflicting pressures from rising unemployment and still-high inflation.  However, comments from Fed Governor Stephen Miran were dovish when he said Fed policy is "clearly restrictive and holding the economy back and I think that well over 100 basis points of rate cuts are going to be justified this year."

The market’s focus this week will be on US economic news.  On Wednesday, the Dec ADP employment change is expected to increase by +48,000.  Also, the Dec ISM services index is expected to slip -0.3 to 52.3. In addition, the Nov JOLTS job openings are expected to climb by +9,000 to 7.679 million.  Finally, on Wednesday, Oct factory orders are expected to decline by -1.1% m/m.  On Thursday, Q3 nonfarm productivity is expected to climb by +4.7%, and unit labor costs are expected to rise by +0.3%.  Also, initial weekly unemployment claims are expected to increase by 12,000 to 211,000.  On Friday, Dec nonfarm payrolls are expected to increase by +59,000, and the Dec unemployment rate is expected to slip by -0.1 to 4.5%.  Also, Dec average hourly earnings are expected to be up by 0.3% m/m and 3.6% y/y.  In addition, Oct housing starts are expected to increase by 1.4% m/m to 1.325 million, and Oct building permits are expected to rise by 1.1% m/m to 1.350 million. Finally, the University of Michigan's Jan consumer sentiment index is expected to climb by 0.6 points to 53.5. 

The markets are discounting the odds at 16% for a -25 bp rate cut at the FOMC’s next meeting on January 27-28.

Overseas stock markets are mixed today.  The Euro Stoxx 50 climbed to a new record high and is up by +0.22%.  China’s Shanghai Composite rallied to a 10.5-year high and closed up by +1.50%.  Japan’s Nikkei Stock 225 climbed to a new record high and closed up by +1.32%.

Interest Rates

March 10-year T-notes (ZNH6) today are down by -4 ticks.  The 10-year T-note yield is up +2.4 bp to 4.185%.  Rising inflation expectations are undercutting t-note prices as the 10-year breakeven inflation rate rose to a 1-month high today at 2.284%.  Also, hawkish comments from Richmond Fed President Tom Barkin weighed on T-note prices when he said he expects tax cuts and deregulation to lift growth this year.  Losses in T-note are limited after a weaker-than-expected German Dec CPI report pushed German bund prices higher and provided carryover support to T-notes. 

European government bond yields are moving lower today.  The 10-year German bund yield is down -2.6 bp to 2.844%.  The 10-year UK gilt yield is down -2.8 bp to 4.478%.

The Eurozone Dec S&P composite PMI was revised downward by -0.4 to 51.5 from the previously reported 51.9.

German Dec CPI (EU harmonized) rose +0.2% m/m and +2.0% y/y, weaker than expectations of +0.4% m/m and +2.2% y/y.

Swaps are discounting a 0% chance of a +25 bp rate hike by the ECB at its next policy meeting on February 5.

US Stock Movers

Chip makers and data storage companies are rallying today, helping lift the overall market.  Sandisk (SNDK) is up more than +22% to lead gainers in the S&P 500, and Western Digital (WDC) is up more than +12% to lead gainers in the Nasdaq 100.  Also, Seagate Technology Holdings (STX) is up more than +9%, and Microchip Technology (MCHP) is up more than +9% after raising its Q3 net sales forecast to $1.19 billion from a previous estimate of $1.11 billion to $1.15 billion, above the consensus of $1.14 billion.  In addition, Texas Instruments (TXN) is up more than +7%, and Micron Technology (MU) is up more than +6%.  Finally, NXP Semiconductors NV (NXPI) is up more than +5%, and Analog Devices (ADI) and Lam Research (LRCX) are up more than +4%. 

Mining stocks are moving higher today, with silver up more than +3% and copper up more than +1% at a new record high.  Hecla Mining (HL) is up more than +8%, and Newmont Mining (NEM) and Coeur Mining (CDE) are up more than +3%.  Also, Freeport McMoRan (FCX) and Barrick Mining (B) are up more than +2%. 

Stocks linked to data-center cooling are under pressure today after Nvidia CEO Huang said it will be possible to cool racks containing Nvidia’s new Rubin chips with water at a temperature that does not require a water chiller.  As a result, Modine Manufacturing (MOD) is down more than -14%, and Johnson Controls International (JCI) is down more than -7% to lead losers in the S&P 500.  Also, Trane Technologies (TT) is down more than -7%, and Carrier Global (CARR) and Vertiv Holdings (VRT) are down more than -2%. 

OneStream (OS) is up more than +22% after buyout firm Hg said it was in advanced talks to acquire the company. 

Aeva Technologies (AEVA) is up more than +21% after it announced that its 4D LiDAR technology has been selected for the Nvidia Drive Hyperion autonomous vehicle platform. 

Oculis Holdings AG (OCS) is up more than +11% after saying the FDA granted breakthrough therapy designation for its Privosegtor therapy to treat optic neuritis.   

Zeta Global Holdings (ZETA) is up more than +10% after announcing it has entered into a strategic collaboration with OpenAI to power conversational intelligence and agentic applications behind Athena by Zeta, its superintelligent agent built for enterprise marketing. 

Vistra Corp. (VST) is up more than +2% after agreeing to pay roughly $4 billion for 10 natural gas-fired power plants in the US Northeast and Texas. 

Core Scientific (CORZ) is up more than +1% after BTIG upgraded the stock to buy from neutral with a price target of $23.

American International Group (AIG) is down more than -7% after announcing that CEO Zaffino will retire by mid-year and be replaced by Aon Plc’s Eric Andersen.

Equifax (EFX) and TransUnion (TRU) are down more than -5% after FHFA Director Pulte said, “I don’t understand what the credit bureaus are doing with their pricing.”

AT&T (T) is down more than -2% after Arete downgraded the stock to sell from neutral with a price target of $20.

Comcast Corp (CMCSA) is down more than -1% after Arete downgraded the stock to sell from neutral with a price target of $23.

Earnings Reports(1/6/2026)

AAR Corp (AIR), AngioDynamics Inc (ANGO), Penguin Solutions Inc (PENG).