Stocks Pressured by Weakness in Chip Makers

The S&P 500 Index ($SPX) (SPY) today is down -0.23%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.56%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.32%.  March E-mini S&P futures (ESH26) are down -0.20%, and March E-mini Nasdaq futures (NQH26) are down -0.30%.

Stock indexes are under pressure today, weighed down by weakness in chip makers.  Intel is down more than -12% to lead chipmakers lower after CEO Lip-Bu Tan gave a lackluster forecast and warned that the company was struggling with manufacturing problems. 

The US Jan S&P manufacturing PMI rose +0.1 to 51.9, slightly weaker than expectations of 52.0.

Gold, silver, and platinum prices rose to fresh record highs today as a weaker dollar, geopolitical risks, and renewed threats to the Fed’s independence have boosted demand for precious metals as a store of value. 

Crude prices jumped more than +3% today to a 1-week high after the Financial Times reported that the US is threatening to curb the supply of dollars for Iraqi oil sales as it pressures Iraq's leading politicians to form a government that excludes Iran-backed militia groups.

On Wednesday, President Trump said he would refrain from imposing tariffs on goods from European nations that oppose his effort to acquire Greenland.  NATO Secretary General Rutte said a breakthrough over Greenland was secured without discussing the territory’s sovereignty with President Trump, instead focusing on the broader issue of security in the Arctic region. 

The market’s focus this week will be on economic news and any fresh tariff developments, the next Fed Chair, and Greenland.  Later today, the final University of Michigan Jan US consumer sentiment index is expected to be unrevised at 54.0. 

Q4 earnings season begins in earnest this week and, so far, has been a positive factor for stocks, with 81% of the 40 S&P 500 companies that have reported beating expectations.  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 Supreme Court on Tuesday did not issue a ruling on challenges to President Trump’s reciprocal tariffs.  The court did not say when it will issue its next opinions, meaning it will likely be at least another month before ruling on the tariffs, as the court begins a four-week recess. 

The markets are discounting the odds to 5% 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 is down by -0.38%.  China’s Shanghai Composite climbed to a 1-week high and closed up by +0.33%.  Japan’s Nikkei Stock 225 closed up by +0.29%.

Interest Rates

March 10-year T-notes (ZNH6) today are down by -2 ticks.  The 10-year T-note yield is up by +0.2 bp to 4.247%.  T-notes gave up early gains today and turned lower after WTI crude rose more than +2% to a 1-week high, a negative factor for inflation expectations. T-notes initially moved higher today as weakness in stocks boosted safe-haven demand for government debt securities. 

T-notes are also under pressure after President Trump last Friday expressed reluctance to name Keven Hassett as the next Fed Chair and said he would prefer to keep him as National Economic Council director.  The markets saw Hassett as the most dovish candidate and the top contender for the Fed Chair nomination, so nominating someone like Kevin Warsh, a known hawk and the second-most-likely Fed Chair candidate, would be bearish for T-note prices.

European government bond yields are moving higher today.  The 10-year German bund yield jumped to a 3-week high of 2.907% and is up +0.2 bp to 2.890%.  The 10-year UK gilt yield climbed to a 2.5-week high of 4.498% and is up +1.0 bp to 4.484%.

The Eurozone Jan S&P manufacturing PMI rose +0.6 to 49.4, stronger than expectations of 49.2.

The UK Jan S&P manufacturing PMI rose +1.0 to 51.6, stronger than expectations of no change at 50.6 and the fastest pace of expansion in 17 months.

UK Dec retail sales ex-autos rose +0.3% m/m, stronger than expectations of no change.

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 AI-infrastructure stocks are sliding today, led by a -13% drop in Intel (INTC) after CEO Lip-Bu Tan gave a lackluster forecast and warned that the company was struggling with manufacturing problems.  Also, Western Digital (WDC), Broadcom (AVGO), and Marvel Technologies (MRVL) are down more than -3%.  In addition, KLA Corp (KLAC), Lam Research (LRCX), Seagate Technology Holdings (STX), and Applied Materials (AMAT) are down more than -2%.

Energy producers and energy service providers are moving higher today with WTI crude oil up more than +3% at a 1-week high.  Halliburton (HAL), SLB Ltd (SLB), Phillips 66 (PSX), and Valero Energy (VLO) are up more than +3%.  Also, APA Corp (APA), Marathon Petroleum (MPC), Devon Energy (DVN),and Occidental Petroleum (OXY) are up more than +2%. 

Capital One Financial Corp. (COF) is down more than -4% after reporting Q4 adjusted EPS of $3.86, weaker than the consensus of $4.15.

Entegris Inc (ENTG) is down more than -4% after Seaport Global Securities downgraded the stock to neutral from buy.

Safehold Inc (SAFE) is down more than -2% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $14.

Trade Desk (TTD) is down more than -1% after Citizens JMP Securities LLC downgraded the stock to market perform from market outperform.

Sherwin-Williams Co (SHW) is down more than -1% after Deutsche Bank downgraded the stock to hold from buy. 

Fortinet (FTNT) is up more than +7% to lead gainers in the S&P 500 after TD Cowen upgraded the stock to buy from hold with a price target of $100. 

Booz Allen Hamilton Holding (BAH) is up more than +5% after reporting Q3 adjusted EPS of $1.77, well above the consensus of $1.27, and raising its full-year adjusted EPS forecast to $5.95-$6.15 from a previous estimate of $5.45-$5.65.  stronger than the consensus of $5.61. 

CSX Corp (CSX) is up more than +3% after saying it expects 2026 operating margin expansion of 200 to 300 basis points from adjusted fiscal 2025 performance. 

Nvidia (NVDA) is up more than +1% after Chinese officials were said to have told the country’s largest tech firms they can prepare orders for Nvidia’s H200 AI chips.

Intuitive Surgical (ISRG) is up more than +1% after reporting Q4 revenue of $2.87 billion, better than the consensus of $2.75 billion.

Elf Beauty (ELF) is up more than +1% after Citigroup initiated coverage of the stock with a buy recommendation and a price target of $110. 

Darden Restaurants (DRI) is up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $235. 

Earnings Reports(1/23/2026)

Booz Allen Hamilton Holding Co (BAH), First Citizens BancShares Inc/ (FCNCA), SLB Ltd (SLB), Webster Financial Corp (WBS).