The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +0.62%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.99%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.94%. March E-mini S&P futures (ESH26) rose +0.62%, and March E-mini Nasdaq futures (NQH26) rose +0.95%.
Stock indexes rallied on Tuesday, with the S&P 500 and Dow Jones Industrial Average posting record highs, and the Nasdaq 100 reaching a 1-week high. Strength in chipmakers and data storage companies led the broader market higher on Tuesday. Also, mining stocks rallied as copper prices soared to a new all-time high on Tuesday, 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 provided carryover support to US stocks after the Euro Stoxx 50 and the Nikkei Stock Index rose to new all-time highs on Tuesday.
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 on Tuesday.
Tuesday’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 on Tuesday 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 18% for a -25 bp rate cut at the FOMC’s next meeting on January 27-28.
Overseas stock markets settled higher on Tuesday. The Euro Stoxx 50 climbed to a new record high and closed up by +0.14%. 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) on Tuesday closed down by -3 ticks. The 10-year T-note yield rose +1.4 bp to 4.175%. Rising inflation expectations undercut t-note prices, as the 10-year breakeven inflation rate rose to a 1-month high of 2.284% on Tuesday. Also, Tuesday’s rally in the S&P 500 to a new record high reduced safe-haven demand for T-notes. In addition, 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-notes were 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 fell -2.8 bp to 2.842%. The 10-year UK gilt yield fell -2.6 bp to 4.480%.
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 1% 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) rose more than +27% to lead gainers in the S&P 500, and Western Digital (WDC) rose more than +16% to lead gainers in the Nasdaq 100. Also, Seagate Technology Holdings (STX) closed up +14%, and Microchip Technology (MCHP) closed up more than +11% 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, Micron Technology (MU) and NXP Semiconductors NV (NXPI) closed up more than +9%, and Texas Instruments (TXN) closed up more than +8%. Finally, Lam Research (LRCX) closed up more than +6%, and Applied Materials (AMAT) and Analog Devices (ADI) closed up more than +4%.
Mining stocks moved higher on Tuesday, with silver up more than +5% and copper up more than +1% at a new record high. Hecla Mining (HL) closed up more than +11%, and Newmont Mining (NEM) closed up more than +5%. Also, Coeur Mining (CDE) and Barrick Mining (B) closed up more than +4%, and Freeport McMoRan (FCX) closed up more than +2%.
Stocks linked to data-center cooling came under pressure Tuesday 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) closed down more than -7%, and Johnson Controls International (JCI) closed down more than -6%. Also, Trane Technologies (TT) closed down more than -2%.
Energy producers and energy service providers retreated on Tuesday after WTI crude oil fell more than -2%. As a result, Chevron (CVX) closed down more than -4% to lead losers in the Dow Jones Industrials. Also, Exxon Mobil (XOM) and Halliburton (HAL) closed down more than -3%, and Marathon Petroleum (MPC), Phillips 66 (PSX), APA Corp (APA), and ConocoPhillips (COP) closed down more than -2%.
Aeva Technologies (AEVA) closed up more than +34% after it announced that its 4D LiDAR technology has been selected for the Nvidia Drive Hyperion autonomous vehicle platform.
OneStream (OS) closed up more than +28% after buyout firm Hg said it was in advanced talks to acquire the company.
Zeta Global Holdings (ZETA) closed 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.
Oculis Holdings AG (OCS) closed up more than +6% after saying the FDA granted breakthrough therapy designation for its Privosegtor therapy to treat optic neuritis.
Axon Enterprise (AXON) closed up +6% after Northcoast Research upgraded the stock to buy from neutral with a price target of $742.
Vistra Corp. (VST) closed up more than +4% after agreeing to pay roughly $4 billion for 10 natural gas-fired power plants in the US Northeast and Texas.
Versant Media Group (VSNT) closed down more than -10% to lead losers in the Nasdaq 100 after Arete initiated coverage on the stock with a sell recommendation and a price target of $33.
American International Group (AIG) closed down more than -7% to lead losers in the S&P 500 after announcing that CEO Zaffino will retire by mid-year and be replaced by Aon Plc’s Eric Andersen.
TransUnion (TRU) closed down more than -4%, and Equifax (EFX) closed down more than -3% after FHFA Director Pulte said, “I don’t understand what the credit bureaus are doing with their pricing.”
Comcast Corp (CMCSA) closed down more than -2% after Arete downgraded the stock to sell from neutral with a price target of $23.
AT&T (T) closed down more than -1% after Arete downgraded the stock to sell from neutral with a price target of $20.
Earnings Reports(1/7/2026)
Albertsons Cos Inc (ACI), Constellation Brands Inc (STZ), Jefferies Financial Group Inc (JEF), MSC Industrial Direct Co Inc (MSM).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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