The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +0.41%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.83%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.88%.  March E-mini S&P futures (ESH26) rose +0.42%, and March E-mini Nasdaq futures (NQH26) rose +0.89%.

Stock indexes settled mostly higher on Tuesday, with the S&P 500 posting a new all-time high and the Nasdaq 100 posting a 2.75-month high. Strength in chipmakers and AI infrastructure stocks led the broader market higher on Tuesday, after Micron Technology jumped more than 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 on Tuesday 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 weighed on the Dow Jones Industrials on Tuesday 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 negative for 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.  Microsoft, Meta Platforms, and Tesla report earnings results after the close on Wednesday, and Apple reports after the close on Thursday.  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 settled higher on Tuesday.  The Euro Stoxx 50 rose to a 1-week high and closed up +0.62%.  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) on Tuesday closed down by -1 tick.  The 10-year T-note yield rose +1.2 bp to 4.223%.  Strength in stocks on Tuesday weighed on T-notes.  Also, slack demand for the Treasury’s $70 billion auction of 5-year T-notes undercut T-note prices as the auction had a bid-to-cover ratio of 2.34, below the 10-auction average of 2.36.  Losses in T-notes were limited on Tuesday after the US Jan consumer confidence index unexpectedly declined to an 11.5-year low. 

European government bond yields move higher on Tuesday.  The 10-year German bund yield rose +0.8 bp to 2.875%.  The 10-year UK gilt yield climbed to a 3-week high of 4.527% and finished up by +2.8 bp at 4.525%.

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 moved higher on Tuesday.  Lam Research (LRCX) closed up more than +6% to lead gainers in the Nasdaq 100, and Micron Technology (MU) closed up more than +5% after it said it plans to invest $24 billion in Singapore and expand its memory-chip capacity.  Also, Western Digital (WDC), Seagate Technology Holdings Plc (STX), KLA Corp (KLAC), and Applied Materials (AMAT) closed up more than +4%.  In addition, Intel (INTC) closed up more than +3%, and ASML Holding NV (ASML) and Broadcom (AVGO) closed up more than +2%.  

The Magnificent Seven technology stocks rallied on Tuesday, providing support to the broader market.  Amazon.com (AMZN) and Microsoft (MSFT) closed up more than +2%, and Apple (AAPL) and Nvidia (NVDA) closed up more than +1%.  Also, Alphabet (GOOGL) closed up +0.39%, and Meta Platforms (META) closed up +0.09%. Bucking the trend, Tesla (TSLA) closed down -0.99%.

Health insurance stocks retreated on Tuesday after the US government proposed holding payments to private Medicare plans flat next year.  Humana (HUM) closed down more than -21% to lead losers in the S&P 500, and UnitedHealth Group (UNH) closed down more than -19% to lead losers in the Dow Jones Industrials after it forecast a decline in 2026 revenue, the first annual contraction in more than 30 years. Also, Elevance Health (ELV) and CVS Health (CVS) closed down more than -14%, and Alignment Healthcare (ALHC) closed down more than -12%.  In addition, Centene (CNC) closed down by more than -10%, and Molina Healthcare (MOH) closed down more than -8%.

Redwire Corp (RDW) closed up more than +28% after being awarded a contract for the Missile Defense Agency Scalable Homeland Innovative Enterprise Layered Defense contract. 

Corning (GLW) closed up more than +15% 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.

CoreWeave (CRWV) closed up more than +9% after Deutsche Bank upgraded the stock to buy from hold with a price target of $140.

General Motors (GM) closed up more than +8% 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. 

HCA Healthcare (HCA) closed up more than +7% after reporting Q4 net income of $1.88 billion, better than the consensus of $1.73 billion.

RTX Corp. (RTX) closed up more than +2% after reporting Q4 adjusted sales of $24.24 billion, well above the consensus of $22.63 billion. 

Sanmina (SANM) closed down more than -22% after forecasting Q2 revenue of $3.1 billion to $3.4 billion, weaker than the consensus of $3.51 billion.

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

Roper Technologies (ROP) closed down more than -9% 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) closed down more than -7% after reporting Q2 net sales of $1.16 billion, below the consensus of $1.17 billion.

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

Earnings Reports(1/28/2026)

Amphenol Corp (APH), ASML Holding NV (ASML), AT&T Inc (T), Automatic Data Processing Inc (ADP), CH Robinson Worldwide Inc (CHRW), Corning Inc (GLW), Danaher Corp (DHR), Elevance Health Inc (ELV), Fair Isaac Corp (FICO), GE Vernova Inc (GEV), General Dynamics Corp (GD), International Business Machine (IBM), Lam Research Corp (LRCX), Las Vegas Sands Corp (LVS), Lennox International Inc (LII), Meta Platforms Inc (META), Microsoft Corp (MSFT), MSCI Inc (MSCI), NVR Inc (NVR), Otis Worldwide Corp (OTIS), Raymond James Financial Inc (RJF), ServiceNow Inc (NOW), Southwest Airlines Co (LUV), Starbucks Corp (SBUX), Tesla Inc (TSLA), Textron Inc (TXT), United Rentals Inc (URI), Waste Management Inc (WM).