Weekly Wrap

The stock market started the week modestly higher but finished with a pullback as earnings dominated price action. The S&P 500 (+0.3%) managed a small weekly gain, while the Nasdaq Composite (-0.2%) and DJIA (-0.4%) retreated. Small- and mid-cap stocks underperformed, with the Russell 2000 (-2.1%) and S&P Mid Cap 400 (-1.4%) lagging.

Mega-cap earnings drove volatility throughout the week. Microsoft’s post-earnings retreat weighed on the information technology sector (-0.4% WTD) and contributed to weakness in software names, reflected in the iShares Expanded Tech-Software ETF (-7.6% WTD). Apple’s stock moved only modestly higher after an impressive earnings report. Meanwhile, Meta Platforms’ strong gain helped the communication services sector (+4.2% WTD) lead the S&P 500, while Tesla rebounded on Friday following a SpaceX-related headline, offsetting its post-earnings slide

While earnings were the main driver of price action outside of the mega-cap complex as well, there were some other factors in play. The energy sector (+3.9% WTD) benefited from rising crude prices, the utilities sector (+1.7% WTD) rallied amid severe winter weather, and consumer staples (+0.8% WTD) and the materials sector (-1.2% WTD) lagged due to a sharp selloff in gold and silver on Friday.

The Fed remained in focus this week with the January FOMC meeting, which delivered no surprises and left rates unchanged, in line with market expectations that the Fed would hold off on cuts for several months. The nomination of former Fed Governor Kevin Warsh as the next Fed Chair also did not materially move markets.

Looking ahead, next week will continue to see a heavy slate of earnings with several more mega-cap tech names in the mix. Investors will be watching for upside guidance and indications that planned AI and capital investments can translate into durable returns, which will be key to reversing this week's softness.

• S&P 500: +0.3% WTD
• Nasdaaq Composite: -0.2% WTD
• DJIA: -0.4% WTD
• S&P Mid Cap 400: -1.4% WTD
• Russell 2000: -2.1% WTD

Monday:

The stock market posted a solid start to the week, with the S&P 500 (+0.5%), Nasdaq Composite (+0.4%), and DJIA (+0.6%) capturing similar gains amid relatively broad strength and notable mega-cap leadership.

Eight S&P 500 sectors posted gains despite mixed breadth figures throughout the session, with mega-cap performance dictating both the strongest and weakest performing sectors today. 

The communication services sector (+1.5%) posted the widest gain, with Meta Platforms (META 672.36, +13.60, +2.06%) and Alphabet (GOOG 333.59, +5.16, +1.57%) providing strong leadership. Meta is one of the four "magnificent seven" names set to report earnings this week. The stock, which was a mega-cap standout last week, was further supported by Rothschild & Co Redburn upgrading the stock to Buy from Neutral with a target price of $900.

Apple (AAPL 255.41, +7.37, +2.97%) and Microsoft (MSFT 470.28, +4.33, +0.93%) are also set to report earnings and also put together solid performances today. Their combined strength helped the top-weighted information technology sector (+0.8%) finish near the top of the leaderboard despite a sluggish day from chipmakers that saw the PHLX Semiconductor Index finish 0.4% lower.  Intel (INTC 42.49, -2.58, -5.72%) was a laggard, continuing its post-earnings slide, while NVIDIA (NVDA 186.36, -1.31, -0.70%) also finished lower. 

Tesla (TSLA 435.20, -13.86, -3.09%) rounds out the four "mag seven" reporters for the week, though it traded sharply lower today, falling below its 50-day moving average (442.39). The stock was not the only laggard in the consumer discretionary sector (-0.7%), which moved lower as about half of its components faced losses. 

Even with Tesla and Nvidia's losses, the Vanguard Mega Cap Growth ETF finished 0.7% higher, marking the second consecutive session of mega-cap outperformance versus small caps and cyclicals—an outcome that runs counter to the prevailing trend for most of the year.

Several cyclical sectors still captured gains, though they were largely modest and subject to some late-session profit taking. 

The financials sector (+0.7%) was supported by broad strength and leadership from insurance names such as American Intl (AIG 73.81, +1.50, +2.07%). Meanwhile, the materials sector (+0.3%) gave up the bulk of its early gain, though Freeport-McMoRan (FCX 61.17, +0.76, +1.26%) and Newmont Corporation (NEM 125.90, +1.59, +1.28%) captured solid gains as gold and silver both charted fresh record highs today amid lingering geopolitical tensions. 

Outside of the S&P 500, the Russell 2000 (-0.4%) and S&P Mid Cap (-0.1%) traded lower again today, unable to regain earlier momentum after stalling alongside the broader market last week. 

Though today's session was a bit of an outlier compared to most of this year, solid mega-cap leadership helped the major averages start the week on a positive note. The performance of the mega-cap group, particularly those set to report earnings later this week, will be especially consequential in sustaining momentum. With the S&P 500 and DJIA both sitting just 0.5% below their respective all-time highs, the path to fresh records will likely hinge on upside guidance and clear evidence that massive AI-related capital spending can translate into durable returns on investment rather than longer-dated promises.

U.S. Treasuries started the week on a modestly higher note, with the 10-year note finishing a bit ahead of other tenors. The 2-year note yield settled down one basis point to 3.59%, and the 10-year note yield settled down three basis points to 4.21%. 

Reviewing today's data:

• Durable goods orders jumped 5.3% month-over-month in November (Briefing.com consensus: 1.1%) following an upwardly revised 2.1% decline (from -2.2%) for October. Excluding transportation, durable goods orders rose 0.5% month-over-month (Briefing.com consensus: 0.3%) following a downwardly revised 0.1% increase (from 0.2%) for October.
  
  • The key takeaway from the report is that it showed good business spending activity, evidenced by the 0.7% month-over-month jump in nondefense capital goods orders excluding aircraft.

Tuesday:

The major averages finished mixed today as investors digested another sizable batch of earnings reports and looked ahead to results from several mega-cap tech names later this week. Solid tech leadership helped the S&P 500 (+0.4%) notch fresh record highs, with the Nasdaq Composite (+0.9%) posting an even wider gain. Meanwhile, the DJIA (-0.8%) plotted a course firmly lower as it faced select earnings weakness. The Russell 2000 (+0.3%) managed to capture a slight gain, preventing a third consecutive day of weakness, while the S&P Mid Cap 400 finished flat.

The top-weighted information technology sector (+1.4%) captured the widest gain, with support coming on multiple fronts. 

Mega-cap leadership was solid, with Apple (AAPL 258.27, +2.86, +1.12%) and Microsoft (MSFT 480.58, +10.30, +2.19%) continuing to chart gains ahead of their earnings reports, while NVIDIA (NVDA 188.52, +2.05, +1.10%) joined in on the action amid a rebound in the chipmaker space.  The Vanguard Mega Cap Growth ETF (+0.7%) finished off its session highs but still managed to notch a solid gain for the third consecutive session as momentum returns to the market's weightiest names. 

The PHLX Semiconductor Index (+2.4%) received an additional boost from memory storage names such as Micron (MU 410.24, +21.15, +5.44%) ahead of Seagate Tech's (STX 371.76, +13.47, +3.76%) earnings report after the close. 

Corning (GLW 109.76, +14.81, +15.60%) also traded higher ahead of its earnings release tomorrow morning, though the impressive move was more attributed to a CNBC report that Meta Platforms (META 672.97, +0.61, +0.09%) will pay Corning $6 billion for fiber optic cable in its AI data centers through 2030.

Elsewhere, the utilities sector (+1.3%) made another nice move higher as the U.S. braces for more severe winter weather, with its largest component, NextEra Energy (NEE 87.15, +1.68, +1.97%), posting a solid gain after an EPS beat despite missing on revenues. 

The energy sector (+1.0%) rounds out the three S&P 500 sectors that finished with a gain of 1.0% or wider, supported by crude oil futures settling today's session $1.76 higher (+2.9%) at $62.39 per barrel. 

Gains elsewhere were relatively modest, though sector strength improved throughout the session as breadth figures turned modestly positive this afternoon after spending much of the session mixed. 

The health care sector (-1.7%) was not among the sectors that improved throughout the session, finishing the day with the widest loss by a fairly wide margin. The sector faced sharp retreats in insurance names such as Humana (HUM 207.99, -55.64, -21.11%) and UnitedHealth (UNH 282.69, -68.95, -19.61%) after the Trump administration called for a slight 0.09% net average year-over-year payment increase for Medicare Advantage and Part D policies versus an expected 4-6% increase.

UnitedHealth's weakness, which was exacerbated by weak Q1 guidance, weighed heavily on the DJIA today, sending it lower after entering the session just 0.5% beneath its all-time high level. 

Elsewhere, Brown & Brown (BRO 74.15, -5.47, -6.87%) was another post-earnings laggard in the financials sector (-0.7%), though the sector faced pressure in a majority of its names today after a solid performance yesterday. 

Other notable earnings-related moves include General Motors (GM 86.38, +6.95, +8.75%), Sysco (SYY 83.93, +8.30, +10.98%), Boeing (BA 244.56, -3.88, -1.56%) (which is another Dow component), and American Airlines (AAL 13.55, -1.02, -7.00%). 

All told, this week's busy slate of earnings reports proved to be a key driver of price action today. The mega-caps continue to trade higher in anticipation of their own earnings this week, with Meta Platforms, Microsoft, and Tesla (TSLA 430.91, -4.29, -0.99%) kicking off the "magnificent seven" earnings after the close tomorrow. With the S&P 500 back in record territory, it will be especially important for the mega-caps to deliver on their upcoming earnings releases to maintain momentum. 

Additionally, tomorrow will bring about the January FOMC decision, though this is largely expected to be a nonfactor as the market is not expecting another rate cut for several more cycles. However, the market will be closely tuned to Fed Chair Powell's presser for any signs of shifting sentiments within the Fed. 

U.S. Treasuries had a mixed showing on Tuesday, with 10s and 30s recording modest losses while the 2-year note outperformed after lagging on Monday. Shorter tenors resisted some intraday selling pressure even though today's $70 billion 5-year note auction met weaker demand than yesterday's stellar 2-year note sale. The 2-year note yield settled down two basis points to 3.57%, and the 10-year note yield settled up one basis point to 4.22%. 

Reviewing today's data:

• November FHFA Housing Price Index 0.6% (Briefing.com consensus 0.3%); Prior 0.4%
• November S&P Case-Shiller Home Price Index 1.4% (Briefing.com consensus 1.2%); Prior 1.3%
• January Consumer Confidence 84.5 (Briefing.com consensus 90.0); Prior was revised to 94.2 from 89.1
  • The key takeaway from the report is that consumer concerns about both the present situation and expectations for the future deepened, driving the overall index to a level that was lower than the depths seen during the COVID pandemic.

Wednesday:

The S&P 500 (flat), Nasdaq Composite (+0.2%), and DJIA (flat) finished today's session in close proximity to their flatlines as the January FOMC meeting provided the market with no surprises as it gears up for a slate of mega-cap earnings reports after the close. The Russell 2000 (-0.4%) and S&P Mid Cap 400 (-0.2%) continue to underwhelm this week after a hot start to the year. 

Strength in tech names sent the S&P 500 and Nasdaq Composite higher at the open, with the S&P 500 notching another record intraday high on the heels of yesterday's records. The major averages then drifted lower until they reached their flatlines, trading in a steady range until the close. 

The FOMC's decision to keep the fed funds target rate unchanged came as no surprise to a market that is not expectant of another rate cut for several months. Fed Chair Powell's press conference was also in line with expectations, with Mr. Powell confirming that the decision to keep rates unchanged had broad support from the committee, and they are well positioned to make decisions on a meeting-by-meeting basis. 

Sector performance was largely muted, with four S&P 500 sectors finishing higher. 

The energy sector (+0.7%) led the way, supported by crude oil futures settling today's session $0.77 higher (+1.2%) at $63.16 per barrel. 

The information technology sector (+0.6%) was also among the relative outperformers, which helped prevent losses at the index level. 

Semiconductor stocks led the strength, with Seagate Tech (STX 442.93, +71.17, +19.14%) finishing as the best-performing S&P 500 name today.  Intel (INTC 48.78, +4.85, +11.04%) was another double-digit gainer after Digitimes reported that NVIDIA (NVDA 191.52, +3.00, +1.59%) is looking to shift its 2028 chip production to Intel. The PHLX Semiconductor Index finished 2.3% higher. 

NVIDIA itself was a mega-cap standout today, boosted by a report from The Wall Street Journal that China has approved the purchase of the company's H200 chips.

Elsewhere, Apple (AAPL 256.44, -1.83, -0.71%) traded lower, while Microsoft (MSFT 481.63, +1.05, +0.22%), which reports its earnings after the close, escaped with a slight gain. 

Mega-caps as a group saw a step back in momentum after three consecutive days of outperformance. The Vanguard Mega Cap Growth ETF finished 0.2% lower ahead of Microsoft's, Tesla's (TSLA 430.46, -0.44, -0.10%), and Meta Platforms' (META 668.73, -4.24, -0.63%) earnings after the close. 

Tesla's loss combined with weakness in Amazon (AMZN 243.01, -1.67, -0.68%) provided weak leadership for the consumer discretionary sector (-0.7%). Elsewhere in the sector, Starbucks (SBUX 95.16, -0.56, -0.59%) reversed a nice early gain. The company missed earnings estimates but initially traded higher as investors focused on a 4% increase in global comparative sales. 

Meanwhile, the real estate sector (-0.9%) finished with the widest loss, while the healthcare sector (-0.8%) also traded lower amid sustained weakness so far this week. 

Other notable earnings-related moves today include Texas Instruments (TXN 216.13, +19.50, +9.92%), AT&T (T 24.08, +1.08, +4.70%), and Amphenol (APH 145.98, -20.26, -12.19%).

Despite a few notable earnings-related moves, trading was generally subdued as investors awaited results from the market's largest companies. With the Fed delivering no market-moving surprises, attention now shifts to upcoming mega-cap earnings as the next potential catalyst for renewed momentum.

U.S. Treasuries retreated on Wednesday, but they inched up off session lows after the release of the January FOMC Statement, which did not contain any big surprises. The 2-year note yield settled up one basis point to 3.58%, and the 10-year note yield settled up three basis points to 4.25%.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -8.5%; Prior 14.1%

Thursday:

The stock market saw quite a bit of movement today as investors reacted to yesterday afternoon's slate of mega-cap earnings. The S&P 500 (-0.1%), Nasdaq Composite (-0.7%), and DJIA (+0.1%) finished mostly lower, though considerably improved from earlier levels as the broader market showed resilience in the face of some mega-cap weakness. 

A dismal reaction to Microsoft's (MSFT 433.50, -48.13, -9.99%) earnings release put pressure on tech names and most of the mega-cap complex, pushing the major averages lower out of the gate. The company beat earnings expectations, but the stock came under pressure as heavy capital spending, softer-than-hoped cloud growth, and merely in-line guidance overshadowed its strong pre-earnings rally.

ServiceNow (NOW 116.73, -12.89, -9.94%) was another notable laggard despite topping its own earnings expectations, trading lower amid a tough day for software stocks that saw the iShares GS Software ETF (IGV 92.27, -4.79, -4.94%) fall to its lowest level since late April.

The top-weighted information technology sector (-1.9%) traded as much as 4.0% lower before the broader market mounted a slow, methodical upward tick throughout the afternoon. After trading with a loss of over 2.0%, the PHLX Semiconductor Index (+0.2%) managed to nab a slight gain. 

Elsewhere in the sector, IBM (IBM 309.24, +15.08, +5.13%) captured the widest gain after posting an earnings beat and upside guidance. 

Several other S&P 500 sectors saw both their top- and bottom-performing components move sharply in reaction to earnings results.

The consumer discretionary sector (-0.6%), which was the only other sector to close with a loss wider than 0.3%, certainly reflected this trend. Royal Caribbean (RCL 345.60, +54.00, +18.52%) was among the best-performing S&P 500 names today, while Las Vegas Sands (LVS 52.71, -8.55, -13.96%) was the worst. 

Perhaps more notably, Tesla (TSLA 416.56, -14.90, -3.45%) provided weak leadership for the sector after its earnings report as mega-cap tech generally struggled.  The company beat earnings estimates, improving on last quarter's miss, but its $20 billion capital expenditure plan for 2026 raises questions about near-term growth as it shifts from a traditional EV maker to a focus on AI and robotics.

The Vanguard Mega Cap Growth ETF finished 0.8% lower, and while that certainly weighed on the major averages, it marks a substantial improvement from session lows. 

A double-digit gain from Meta Platforms (META 738.31, +69.58, +10.40%) also helped to offset the outsized weakness in Microsoft. Like Microsoft and Tesla, the company is also committed to a massive capital expenditure range for 2026, but upside Q1 revenue guidance appeared to outweigh concerns about the elevated spending outlook.

The communication services sector (+2.9%) was the best-performing S&P 500 sector by a wide margin as a result. 

Elsewhere, the energy sector (+1.1%) shed much of its sharp early gain as oil prices steadily moderated from early highs. Crude oil futures still managed to settle today's session $2.22 higher (+3.5%) at $65.38 a barrel amid escalating geopolitical tensions between the U.S. and Iran. 

Meanwhile, the real estate (+1.4%), financials (+1.1%), and industrials (+1.0%) sectors captured solid gains as the broader market steadily improved this afternoon. 

Outside of the S&P 500, the Russell 2000 (+0.1%) and S&P Mid Cap 400 (-0.1%) finished flattish after recovering from substantial early losses. 

While today's session highlighted notable divergence across mega-cap names driven by earnings, the broader market showed resilience, steadily recovering from session lows as investors bought the early weakness, suggesting that risk sentiment remains intact as investors step in on weakness. 

Attention now turns to another sizable slate of earnings after the close, including Apple (AAPL 258.01, +1.57, +0.61%), the last of the "magnificent seven" names to report this week. 

U.S. Treasuries finished Thursday with gains across the curve, sending yields on 5s and 10s back below their respective 200-day moving averages despite a soft $44 billion 7-year note auction. The 2-year note yield settled down three basis points to 3.55%, and the 10-year note yield settled down two basis points to 4.23%.

Reviewing today's data:

• November Trade Balance -$56.8 bln (Briefing.com consensus -$43.5 bln); Prior was revised to -$29.2 bln from -$29.4 bln
  • The key takeaway from the report is that it will create a drag on Q4 GDP growth expectations. A possible silver lining, though, is that the import activity could be construed as a reflection of increased demand in the U.S.
• Weekly Initial Claims 209K (Briefing.com consensus 205K); Prior was revised to 210K from 200K, Weekly Continuing Claims 1.827 mln; Prior was revised to 1.865 mln from 1.849 mln
  • The key takeaway from the report is that it corroborates the idea that labor market conditions are still reasonably good to promote solid consumer spending activity that will be supportive of ongoing economic growth and a Fed that can show more patience before cutting rates again.
• Q3 Productivity - Revised 4.9% (Briefing.com consensus 4.9%); Prior 4.9%, Q3 Unit Labor Costs - Revised -1.9% (Briefing.com consensus -1.9%); Prior -1.9%
  • With no changes, the key takeaway remained the same: this productivity report is the golden ticket for the economy (and the Fed, per chance), as it reflects strong growth without labor cost inflation.
• November Wholesale Inventories 0.2% (Briefing.com consensus 0.1%); Prior was revised to 0.2% from 0.5%
• November Factory Orders 2.7% (Briefing.com consensus 0.5%); Prior was revised to -1.2% from -1.3%
  • The key takeaway from the report is that transportation equipment orders, which are volatile, drove the increase in total factory orders.

Friday:

The S&P 500 (-0.4%), Nasdaq Composite (-0.9%), and DJIA (-0.4%) retreated amid relatively broad weakness in the stock market today, though they improved from session lows throughout the afternoon. The Russell 2000 (-1.6%) and S&P Mid Cap 400 (-1.0%) finished with wider losses both for the session and for the week. 

It has been a busy day from a headlines perspective, with the buzz starting well before the opening bell. 

Perhaps most notably, former Fed Governor Kevin Warsh was nominated by President Trump to be the next Fed Chair. The decision did little to the market's implied monetary policy path expectations, and equity futures and the U.S. Treasury market reacted calmly to the news, though several other headwinds were already pressuring stocks.

Gold and silver faced a massive retreat today after an extended run through record territory. Gold finished 11% lower today, while silver dropped 32%. Unsurprisingly, the materials sector (-1.8%) faced the widest loss, with Newmont Corporation (NEM 112.33, -14.60, -11.50%) and Freeport-McMoRan (FCX 60.22, -4.91, -7.54%) among some of the worst-performing S&P 500 names today. 

The top-weighted information technology sector (-1.3%) was another notable laggard, as the reaction to this week's mega-cap earnings reports continues to be underwhelming. Despite a sizable earnings beat, Apple (AAPL 259.48, +1.20, +0.46%) traded lower for most of the day before squeaking out a modest gain. Microsoft (MSFT 430.29, -3.21, -0.74%) also failed to garner any buy-the-dip interest after a double-digit retreat yesterday. The Vanguard Mega Cap Growth ETF finished 0.8% lower, with two consecutive days of weakness moving it into negative territory for the week. 

Chipmaker names also faced pressure, sending the PHLX Semiconductor Index 3.9% lower. KLA Corporation (KLAC 1427.94, -256.77, -15.24%) was a notable laggard despite topping earnings estimates. Sandisk (SNDK 576.25, +36.95, +6.85%) soared nearly 20% after a blowout earnings report of its own but saw gains steadily eroded amid increasing pressure across its peers. 

While seven S&P 500 sectors closed with losses, the materials and technology sectors were the only sectors to finish more than 0.3% below their flatlines as the broader market generally improved throughout the session. 

The defensive consumer staples (+1.4%) and health care (+0.6%) sectors both outperformed amid weakness in growth stocks.  Colgate-Palmolive (CL 90.31, +5.07, +5.95%), Church & Dwight (CHD 96.27, +4.31, +4.69%), and Stryker (SYK 369.46, +15.16, +4.28%) all posted solid gains after earnings. 

The energy sector (+1.0%) also finished higher, with Chevron (CVX 176.89, +5.70, +3.33%) leading the strength after its earnings release, while the real estate sector (+0.1%) eked out a slight gain. 

The consumer discretionary sector (-0.1%) just missed out on a gain, though the fact that it was anywhere near its flatline given how few of its components traded higher is impressive. 

Tesla (TSLA 430.41, +13.85, +3.32%) saw a solid rebound from yesterday's post-earnings weakness following a Bloomberg report that Elon Musk's SpaceX is considering a merger with the EV giant or xAI as an alternative to a traditional IPO.

Elsewhere, Deckers Outdoor (DECK 119.28, +19.38, +19.40%) was the top-performing S&P 500 name today after a blowout earnings report. 

Other notable earnings moves include Verizon (VZ 44.52, +4.71, +11.83%), American Express (AXP 352.23, -6.27, -1.75%), and Visa (V 321.87, -9.93, -2.99%).

Looking ahead, the market remains firmly in earnings mode, with several high-profile mega-cap reports, including those of Amazon (AMZN 239.30, -2.43, -1.01%) and Alphabet (GOOG 338.53, -0.13, -0.04%), still on deck that are likely to dictate near-term direction and determine whether this week’s pullback proves to be a pause or the start of a deeper consolidation. 

U.S. Treasuries finished January in mixed fashion, with 5s and shorter tenors recording gains while longer tenors lagged, ending with slim losses. The 2-year note yield settled down two basis points to 3.53% (-7 basis points this week; +5 basis points in January), and the 10-year note yield settled up one basis point to 4.24% (UNCH this week; +7 basis points in January). 

Reviewing today's data:

• December PPI 0.5% (Briefing.com consensus 0.2%); Prior 0.2%, December Core PPI 0.6% (Briefing.com consensus 0.3%); Prior 0.0%
  • The key takeaway from the report is the lingering 3-handle on the year-over-year changes, which will keep alive concerns about pass-through (to the consumer) and possible margin compression (for wholesalers and retailers) if they don't pass through their higher costs.
• January Chicago PMI 54.0 (Briefing.com consensus 43.0); Prior was revised to 42.7 from 43.5