Broader Market Rallies on Tech Strength and Solid Earnings

The S&P 500 Index ($SPX) (SPY) today is up +0.47%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.84%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.87%.  March E-mini S&P futures (ESH26) are up +0.48%, and March E-mini Nasdaq futures (NQH26) are up +0.90%.

Stock indexes are mostly higher today, with the S&P 500 posting a 2-week high and the Nasdaq 100 posting a 2.75-month high.  Strength in chipmakers and AI infrastructure stocks is leading the broader market higher today, with Micron Technology rising 5% after it said it plans to invest $24 billion in Singapore and expand its memory-chip capacity.  Also, strong Q4 corporate earnings results are underpinning stocks.  Stocks maintained their gains today despite an unexpected decline in the Conference Board’s US Jan consumer confidence index to an 11.5-year low.

The weakness in health insurance stocks is weighing on the Dow Jones Industrials after the US government proposed holding payments to private Medicare plans flat next year.  Health insurers added to their losses after UnitedHealth Group forecast a decline in 2026 revenue, the first annual contraction in more than 30 years. 

Stocks are also being pressured by President Trump’s new threat of 100% tariffs on US imports from Canada, the possibility of a US government shutdown over ICE funding, lingering concerns about Greenland, and business and travel disruptions from the massive storm that just crossed the US.  In addition, there is political uncertainty about the Fed, as the FOMC is expected to leave rates unchanged at its meeting this week, potentially drawing new threats from Mr. Trump for refusing to cut rates further. 

The risk of another partial government shutdown is also weighing on stocks.  Senate Democrats threatened to block a government funding deal over Department of Homeland Security/ICE funding after the ICE shooting of an ICU nurse in Minnesota on Saturday.  There could be a partial government shutdown when the current stopgap funding measure expires this Friday.

ADP reported that US private payrolls rose an average of 7,750 per week in the four weeks ending January 3, the smallest weekly increase in six weeks.

The US Nov S&P composite-20 home price index rose +1.39% y/y, stronger than expectations of +1.20% y/y.

The Conference Board US Jan consumer confidence index unexpectedly fell -9.7 to an 11.5-year low of 84.5, weaker than expectations of an increase to 91.0.

The US Jan Richmond Fed manufacturing survey rose +1 to -6, slightly weaker than expectations of -5.

The market’s focus this week will be on new tariff news and the prospects for a continued resolution (CR) to fund the government.  On Wednesday, the FOMC is expected to keep the fed funds target range unchanged at 3.50%-3.75%.  Post-meeting comments on Wednesday from Fed Chair Powell will also be scrutinized for clues to the future of Fed policy.  On Thursday, initial weekly unemployment claims are expected to increase by 5,000 to 205,000.  Also, Q3 nonfarm productivity is expected to be unrevised at 4.9%.  In addition, the Nov trade deficit is expected to widen to -$44.10 billion.  Finally, Nov factory offers are expected to increase by +1.6% m/m.  On Friday, Dec PPI final demand is expected to ease to +2.8% y/y from +3.0% y/y in Nov, and Dec PPI ex-food and energy is expected to ease to +2.9% y/y from +3.0% y/y in Nov.  Also, the Jan MNI Chicago PMI is expected to climb by +0.8 to 43.5.

Q4 earnings season is in full swing, with 102 of the S&P 500 companies scheduled to report earnings this week.  Earnings have been a positive factor for stocks, with 81% of the 83 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 markets are discounting a 3% chance of a -25 bp rate cut at this week’s FOMC meeting on Tuesday and Wednesday (Jan 27-28).

Overseas stock markets are higher today.  The Euro Stoxx 50 rose to a 1-week high and is up +0.46%.  China’s Shanghai Composite closed up +0.18%.  Japan’s Nikkei Stock 225 closed up +0.85%.

Interest Rates

March 10-year T-notes (ZNH6) today are down by -1 tick.  The 10-year T-note yield is up +0.4 bp to 4.215%.  Strength in stocks today is weighing on T-notes.  Also, supply pressures are undercutting T-note prices ahead of a $70 billion Treasury auction of 5-year T-notes later today.  T-notes recovered almost all of their losses after the US Jan consumer confidence index unexpectedly declined to an 11.5-year low. 

European government bond yields are mixed today.  The 10-year German bund yield is down -0.2 bp to 2.865%. The 10-year UK gilt yield is up +2.0 bp to 4.517%.

Eurozone Dec new car registrations rose +5.8% y/y, the sixth consecutive month of increases.

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 moving higher today.  Seagate Technology Holdings Plc (STX) is up more than +6% to lead gainers in the Nasdaq 100, and Lam Research (LRCX) and Western Digital (WDC) are up more than +5%. Also, Micron Technology (MU) is up more than +4% after it said it plans to invest $24 billion in Singapore and expand its memory-chip capacity.  In addition, Applied Materials (AMAT) is up more than +4%, and KLA Corp (KLAC), ASML Holding NV (ASML), and Intel (INTC) are up more than +3%.  Finally, Nvidia (NVDA), Broadcom (AVGO), Marvel Technology (MRVL), and Microchip Technology (MCHP) are up more than +1%. 

Health insurance stocks are sliding today after the US government proposed holding payments to private Medicare plans flat next year.  UnitedHealth Group (UNH) is down more than -19% to lead losers in the S&P 500 and Dow Jones Industrials after it forecast a decline in 2026 revenue, the first annual contraction in more than 30 years.  Also, Humana (HUM) is down more than -19%, and Alignment Healthcare (ALHC) is down more than -15%.  In addition, Elevance Health (ELV), CVS Health (CVS), and Centene (CNC) are down by more than -11%, and Molina Healthcare (MOH) is down more than -5%.

Redwire Corp (RDW) is up more than +26% after being awarded a contract for the Missile Defense Agency Scalable Homeland Innovative Enterprise Layered Defense contract. 

Corning (GLW) is up more than +16% to lead gainers in the S&P 500 after announcing a multiyear $6 billion agreement with Meta Platforms to supply optical fiber, cable, and connectivity solutions to Meta’s data centers.

HCA Healthcare (HCA) is up more than +11% after reporting Q4 net income of $1.88 billion, better than the consensus of $1.73 billion.

General Motors (GM) is up more than +9% after reporting Q4 adjusted EPS of $2.51, better than the consensus of $2.28 and forecasting full-year adjusted EPS of $11.00 to $13.00, the midpoint above the consensus of $11.79. 

CoreWeave (CRWV) is up more than +8% after Deutsche Bank upgraded the stock to buy from hold with a price target of $140.

United Parcel Service (UPS) is up more than +2% after reporting Q4 revenue of $24.50 billion, better than the consensus of $23.99 billion.

RTX Corp. (RTX) is up more than +1% after reporting Q4 adjusted sales of $24.24 billion, well above the consensus of $22.63 billion. 

Agilysys Inc. (AGYS) is down more than -20% after reporting Q3 adjusted EPS of 42 cents, weaker than the consensus of 46 cents.

Sanmina (SANM) is down more than -17% after forecasting Q2 revenue of $3.1 billion to $3.4 billion, weaker than the consensus of $3.51 billion.

Roper Technologies (ROP) is down more than -14% to lead losers in the Nasdaq 100 after forecasting 2026 adjusted EPS continuing operations of $21.30 to $21.55, below the consensus of $21.62

Applied Industrial Technologies (AIT) is down more than -8% after reporting Q2 net sales of $1.16 billion, below the consensus of $1.17 billion.

Brown & Brown (BRO) is down more than -7% after reporting Q4 revenue of $1.61 billion, weaker than expectations of $1.65 billion. 

Earnings Reports(1/27/2026)

NextEra Energy Inc (NEE), United Parcel Service Inc (UPS), Boeing Co/The (BA), PACCAR Inc (PCAR), UnitedHealth Group Inc (UNH), RTX Corp (RTX), Roper Technologies Inc (ROP), Synchrony Financial (SYF), Sysco Corp (SYY), Northrop Grumman Corp (NOC), HCA Healthcare Inc (HCA), Kimberly-Clark Corp (KMB), General Motors Co (GM), Invesco Ltd (IVZ), Union Pacific Corp (UNP), Seagate Technology Holdings PL (STX), F5 Inc (FFIV), Packaging Corp of America (PKG), PPG Industries Inc (PPG), Texas Instruments Inc (TXN), BXP Inc (BXP).