Stock indexes closed mixed on Tuesday, with the S&P 500 reaching a new all-time high and the Nasdaq 100 hitting a 2.75-month high. Chipmakers and AI infrastructure stocks led the market higher, with Micron Technology announcing plans to invest $24 billion in Singapore. Strong Q4 corporate earnings results also provided support for stocks.
Despite an unexpected decline in the Conference Board’s US Jan consumer confidence index, stocks maintained their gains. However, the Dow Jones Industrials were weighed down by weakness in health insurance stocks following the US government’s proposal to hold payments to private Medicare plans flat next year.
Political uncertainty surrounding President Trump’s threats of tariffs on Canadian imports, a possible government shutdown over ICE funding, concerns about Greenland, and disruptions from a recent storm added further pressure on stocks. Additionally, the FOMC is expected to keep rates unchanged at its meeting this week, prompting new threats from President Trump for refusing to cut rates.
The risk of another partial government shutdown looms as Senate Democrats threaten to block a funding deal over ICE funding. ADP reported a slowdown in US private payrolls growth in the four weeks ending January 3.
Looking ahead, the focus will be on new tariff developments and government funding resolution. The FOMC is expected to keep the fed funds target range unchanged, with post-meeting comments from Fed Chair Powell closely watched. Earnings season is in full swing, with key companies like Microsoft, Meta Platforms, and Tesla reporting this week.
Overseas markets settled higher on Tuesday, with European government bond yields moving higher. Swaps are discounting a 0% chance of a rate hike by the ECB at its next policy meeting.
In US stock news, chip makers and AI infrastructure stocks saw gains, while health insurance stocks retreated. Notable movers included Lam Research, Micron Technology, and Humana. Corning announced a multiyear agreement with Meta Platforms, leading to a spike in its stock price. General Motors reported strong Q4 earnings, while Sanmina and Agilysys saw declines.
Earnings reports scheduled for January 28 include companies like Microsoft, Tesla, and AT&T. The markets are pricing in a low chance of a rate cut at this week’s FOMC meeting.
Overall, despite various challenges and uncertainties, the stock market continues to show resilience and optimism, driven by strong corporate earnings and positive developments in the tech sector. This article was originally published on Barchart.com.
