The stock market experienced a mixed day on Wednesday, with the S&P 500 and Nasdaq 100 both closing down, while the Dow Jones Industrial Average closed up. The S&P 500 fell to a 2-week low, while the Nasdaq 100 dropped to a 7-week low. This decline was attributed to investors rotating out of high-flying chipmakers and AI-infrastructure stocks, which put pressure on the broader market. Advanced Micro Devices led the chipmakers lower after analysts expressed concerns about the company’s weak Q1 sales forecast, causing their stock to plummet by over 17%.
On the positive side, Super Micro Computer saw their stock rise by more than 13% after forecasting Q3 net sales well above expectations. Additionally, Amgen closed up more than 8%, leading the Dow Jones Industrials higher, following a report of stronger-than-expected Q4 revenue.
In terms of economic news, the Jan ADP employment change was below expectations, while the Jan ISM services index came in stronger than expected. Market sentiment improved after the end of the partial US government shutdown, with President Trump signing a deal to fund the government. The Treasury announced that next week’s quarterly refunding will total $125 billion in sales of T-notes and T-bonds, in line with expectations.
US MBA mortgage applications fell in the week ended January 30, with both the purchase mortgage sub-index and refinancing sub-index showing declines. The average 30-year fixed-rate mortgage also fell slightly.
Looking ahead, the markets will focus on earnings and economic news, with initial weekly unemployment claims and the University of Michigan’s consumer sentiment index expected to be key data points. Earnings season is in full swing, with S&P 500 companies reporting positive results, beating expectations. The markets are currently pricing in a 10% chance of a rate cut at the next policy meeting in March.
Overseas stock markets settled mixed on Wednesday, with the Euro Stoxx 50 and Japan’s Nikkei Stock 225 closing down, while China’s Shanghai Composite closed up. Interest rates remained relatively stable, with T-notes showing little change. European government bond yields were mixed, with the Eurozone experiencing a slight decrease in core CPI and composite PMI.
In terms of US stock movers, chipmakers and AI-infrastructure stocks saw significant declines, impacting the broader market. Advanced Micro Devices, Sandisk, and Micron Technology were among the top losers. Cryptocurrency-exposed stocks also moved lower as Bitcoin fell. On the positive side, Super Micro Computer, Eli Lilly, and Fortive Corp saw their stocks rise significantly.
Earnings reports for February 5, 2026, include companies like Amazon, Bristol-Myers Squibb, ConocoPhillips, and Snap-on Inc. Overall, the stock market continues to be influenced by a combination of earnings reports, economic data, and global market trends.
