Stocks Recover on Strength in Megacap Tech and Consumer Sentiment

The S&P 500 Index ($SPX) (SPY) today is up +0.25%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.38%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.62%.  March E-mini S&P futures (ESH26) are up +0.21%, and March E-mini Nasdaq futures (NQH26) are up +0.64%.

The broader market recovered from early losses today and turned higher after the Magnificent Seven technology stocks rallied.  Stocks initially moved lower today after Intel plunged 15% following a lackluster forecast from CEO Lip-Bu Tan, who warned the company was struggling with manufacturing problems.

Stocks also recovered today after the University of Michigan US Jan consumer sentiment index was revised upward to a 5-month high.  In addition, bond yields turned lower, supporting stocks, as inflation expectations eased after the University of Michigan's US Jan inflation expectations were revised lower.

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

The University of Michigan US Jan consumer sentiment index was revised upward by +2.4 to a 5-month high of 56.4, stronger than expectations of no change at 54.0.

The University of Michigan US Jan 1-year inflation expectations were revised lower to a 1-year low of 4.0% from the previously reported 4.2%. Also, the Jan 5-10 year inflation expectations were revised lower to 3.3% from the previously reported 3.4%.

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

WTI crude oil jumped more than +2% today to a 1-week high to lift energy producers after President Trump revived threats to use military force against Iran’s senior leadership for its violent crackdown on protests.  Crude prices also rose 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. 

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 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 is down by -0.19%.  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 up by +2 ticks.  The 10-year T-note yield is down by -0.6 bp to 4.239%.  T-notes recovered from early losses today and turned higher as inflation expectations eased after the University of Michigan’s US Jan inflation expectations were revised lower.  T-notes initially moved lower today after WTI crude prices jumped more than +2% to a 1-week high, a negative factor for inflation expectations.

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 +0.6 bp to 2.894%.  The 10-year UK gilt yield climbed to a 2.5-week high of 4.517% and is up +2.0 bp to 4.494%.

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

The strength of the Magnificent Seven technology stocks is a supportive factor for the broader market today.  Microsoft (MSFT) is up more than +3%, and Amazon.com (AMZN), Nvidia (NVDA), and Meta Platforms (META) are up more than +1%.  In addition, Apple (AAPL) is up +0.34%, Alphabet (GOOGL) is up +0.31%, and Tesla (TSLA) is up +0.13%. 

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), Devon Energy (DVN), and Occidental Petroleum (OXY) are up more than +2%.  Also, APA Corp (APA), ConocoPhillips (COP), Exxon Mobil (XOM), SLB Ltd (SLB), and Valero Energy (VLO) are up more than +1%.

Mining stocks are climbing today as the price of gold, silver, and platinum rose to new record highs.  Barrick Mining (B) is up more than +2%.  Also, Newmont Mining (NEM), Hecla Mining (HL), Freeport-McMoRan (FCX), and Coeur Mining (CDE) are up more than +1%.

Booz Allen Hamilton Holding (BAH) is up more than +8% 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. 

Fortinet (FTNT) is up more than +6% to lead gainers in the S&P 500 after TD Cowen upgraded the stock to buy from hold with a price target of $100. 

CSX Corp (CSX) is up more than +4% after saying it expects 2026 operating margin expansion of 200 to 300 basis points from adjusted fiscal 2025 performance. 

Netflix (NFLX) is up more than 2% after co-chief executive Peters told the Financial Times that his company is on track to win the backing of Warner Bros. Discovery shareholders for its offer for Warner Bros. film and television studios.

Clorox (CLX) is up more than +2% today after acquiring GOJO Industries for $2.25 billion in cash.

Intel (INTC) is down more than -15% to lead losers in the S&P 500 and Nasdaq 100 after CEO Lip-Bu Tan gave a lackluster forecast and warned that the company was struggling with manufacturing problems. 

Capital One Financial Corp. (COF) is down more than -6% after reporting Q4 adjusted EPS of $3.86, weaker than the consensus of $4.15.

Safehold Inc (SAFE) is down more than -4% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $14.

Entegris Inc (ENTG) is down more than -1% after Seaport Global Securities downgraded the stock to neutral from buy.

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

Earnings Reports(1/23/2026)

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