Stocks Retreat as Big Tech Falters

The S&P 500 Index ($SPX) (SPY) today is down -0.96%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.57%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.53%.  March E-mini S&P futures (ESH26) are down -0.96%, and March E-mini Nasdaq futures (NQH26) are down -1.56%.

Stock indexes are under pressure today, with the S&P 500 and Nasdaq 100 sliding to 1-week lows.  The weakness in chip makers and the Magnificent Seven technology stocks is weighing on the broader market.  Also, rising geopolitical risks are undercutting stocks as markets await the US response to the turmoil in Iran.  Reuters reported that some US personnel have been advised to leave the US Al Udeid Air base in Qatar.  The facility was targeted by Iran in retaliatory airstrikes last year after the US attacked Iran’s nuclear facilities.  President Trump urged Iranians to continue protests against the government of Supreme Leader Ayatollah Ali Khamenei, and said he would “act accordingly” once he gets a sense for how many of the demonstrators have been killed. 

The heightened geopolitical risks in Iran pushed WTI crude oil up to a 2.5-month high today, and precious metals are soaring as investors seek safe-haven assets.  Gold, silver, and copper jumped to new all-time highs today.

Stocks maintained their losses after stronger-than-expected US economic news on Nov retail sales, Nov producer prices, and Dec existing home sales, along with hawkish comments from Minneapolis Fed President Neel Kashkari, reduced the chances for a Fed interest rate cut.  However, stocks stabilized at lower levels as T-note yields fell on dovish comments from Philadelphia Fed President Anna Paulson, who said she sees Fed rate cuts later this year.  The 10-year T-note yield is down -4 bp to 4.14%.

US Nov PPI final demand rose +3.0% y/y, stronger than expectations of +2.7% y/y.  Nov PPI ex-food and energy also rose +3.0% y/y, stronger than expectations of +2.7% y/y 

US Nov retail sales rose +0.6% m/m, stronger than expectations of +0.5% m/m.  Also, Nov retail sales ex-autos rose +0.5% m/m, stronger than expectations of +0.4% m/m.

US Dec existing home sales rose +5.1% m/m to a 2.75-year high of 4.35 million, stronger than expectations of 4.22 million.

US MBA mortgage applications rose +28.5% in the week ended January 9, with the purchase mortgage sub-index up +15.9% and the refinancing mortgage sub-index up +40.1%.  The average 30-year fixed rate mortgage fell -7 bp to 6.18% from 6.25% in the prior week.

Minneapolis Fed President Neel Kashkari said the US economy is showing "resilience" and he doesn't see the "impetus" for the Fed to cut interest rates this month.

Philadelphia Fed President Anna Paulson said, "I see inflation moderating, the labor market stabilizing, and growth coming in around 2% this year.  If all of that happens, then some modest further adjustments to the funds rate would likely be appropriate later in the year."

The Supreme Court didn’t rule on challenges to President Trump’s tariffs today.  The court did not say when it will issue its next opinions, but could schedule more decisions for next Tuesday and Wednesday, when the justices are again in session.

Better-than-expected trade news from China today is supportive of global growth prospects.  China Dec exports rose+6.6% y/y, stronger than expectations of +3.1% y/y.  Dec imports rose +5.7% y/y, stronger than expectations of +0.9% y/y.

Stocks also have some negative carryover from Monday on concerns about Fed independence, after Fed Chair Powell said the Justice Department was threatening a criminal indictment tied to his June testimony on Fed headquarters renovations, in retaliation for the Fed's refusal to go along with President Trump’s calls for lower interest rates. 

The market’s focus this week will be on economic news and any fresh news on the Federal Reserve.  On Thursday, initial weekly unemployment claims are expected to increase by 7,000 to 215,000.  Also, the Jan Empire manufacturing survey of general business conditions is expected to rise by 4.9 points to 1.0.  On Friday, Dec manufacturing production is expected to fall -0.1% m/m.  Also, the Jan NAHB housing market index is expected to increase by +1 to 40.

Q4 earnings season is set to begin this week as bank earnings start to roll in.  According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4.  Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.

The markets are discounting the odds to 3% 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 fell from a new record high, down -0.24%.  China’s Shanghai Composite fell from a 10.5-year high and closed down -0.31%.  Japan’s Nikkei Stock 225 rallied to a new all-time high and closed up by +1.48%.

Interest Rates

March 10-year T-notes (ZNH6) today are up by +7 ticks.  The 10-year T-note yield is down -4.1 bp to 4.136%.  Concerns over a US response to the protests in Iran have boosted some safe-haven demand for T-notes after Reuters reported that some US personnel have been advised to leave a US air base in Qatar.  The base had been attacked last year by Iran in retaliation for US air strikes on Iranian nuclear facilities.  T-notes added to their gains today on dovish comments from Philadelphia Fed President Anna Paulson, who said she sees additional Fed rate cuts later this year.

Gains in T-notes are limited after US Nov retail sales, Nov producer prices, and Dec existing home sales rose more than expected.  Also, rising inflation expectations are negative for T-notes, as the 10-year breakeven inflation rate rose to a 2.25-month high of 2.313% today.

European government bond yields are moving lower today.  The 10-year German bund yield is down -2.4 bp to 2.823%.  The 10-year UK gilt yield fell to a 13-month low of 4.349% and is down -4.4 bp to 4.354%.

ECB Vice President Luis de Guindos said Eurozone inflation "remains in a good place," though global uncertainty is weighing on the economy.

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 are sliding today, weighing on the broader market.  ARM Holdings (ARM) and Broadcom (AVGO) are down more than -4%.  Also, Marvel Technology (MRVL) is down more than -3%, and Lam Research (LRCX), Applied Materials (AMAT), and KLA Corp (KLAC) are down more than -2%.  In addition, Micron Technology (MU) and Qualcomm (QCOM) are down more than -1%. 

Weakness in the Magnificent Seven technology stocks is a bearish factor for the overall market. Nvidia (NVDA), Amazon.com (AMZN), and Tesla (TSLA) are down more than -2%.  Also, Meta Platforms (META), Microsoft (MSFT), Alphabet (GOOGL), and Apple (AAPL) are down more than -1%. 

Energy producers and energy service providers are climbing today, with WTI crude oil hitting a 2.5-month high.  APA Corp (APA) is up more than +5%, and Devon Energy (DVN), ConocoPhillips (COP), and Occidental Petroleum (OXY) are up more than +3%.  Also, Phillips 66 (PSX),  Marathon Petroleum (MPC), Exxon Mobil (XOM), and Valero Energy (VLO) are up more than +2%.  In addition, Chevron (CVX) is up more than +2% to lead gainers in the Dow Jones Industrials.

Cryptocurrency-exposed stocks are rallying today with Bitcoin (^BTCUSD) up more than +3% at a 2-month high. Strategy (MSTR) is up more than +7% to lead gainers in the Nasdaq 100.  Also, Coinbase Global (COIN), Galaxy Digital Holdings (GLXY), and Riot Platforms (RIOT) are up more than +3%.  In addition, Mara Holdings (MARA) is up more than +1%.

Trip.com (TCOM) ADRs are down more than -16% after Chinese regulators said the company is being investigated over alleged antitrust conduct. 

Rivian Automotive (RIVN) is down more than -8% after UBS downgraded the stock to sell from neutral with a price target of $15. 

Glaukos Corp (GKOS) is down more than -6% after forecasting 2026 net sales of $600 million to $620 million, the midpoint below the consensus of $612.3 million. 

Intuitive Surgical (ISRG) is down more than -5% after forecasting full-year da Vinci Procedure growth of 13% to 15%, below the consensus of 15.2%. 

Bank of America (BAC) is down -4% after reporting Q4 FICC trading revenue excluding DVA of $2.52 billion, below the consensus of $2.62 billion. 

Wells Fargo & Co. (WFC) is down more than -4% after reporting Q4 net interest income of $12.33 billion, below the consensus of $12.43 billion. 

TG Therapeutics (TGTX) is up more than +9% after reporting preliminary full-year 2025 revenue of $616 million, stronger than the consensus of $606.1 million. 

Mosaic (MOS) is up more than +6% to lead gainers in the S&P 500 after Morgan Stanley raised its price target on the stock to $35 from $33, citing higher potash demand. 

CNH Industrial NV (CNH) is up more than +2% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $13. 

Fabrinet (FN) is up more than +1% after Barclays upgraded the stock to overweight from equal weight with a price target of $537.

Earnings Reports(1/14/2026)

Bank of America Corp (BAC), Citigroup Inc (C), Wells Fargo & Co (WFC).