Market news 29 jan
Markets on the Rise: Index Growth, Earnings Reports, and Tariff Threats Impact
On Tuesday, U.S. stock markets showed confident growth. The S&P 500 Index ($SPX) ($SPY) closed with a gain of +0.92%, the Dow Jones Industrial Average ($DOWI) ($DIA) added +0.31%, while the Nasdaq 100 ($IUXX) ($QQQ) led the gains with +1.59%. Futures for March E-mini S&P (ESH25) and E-mini Nasdaq (NQH25) also showed solid growth of +0.75% and +1.46%, respectively.
Tech Giants Lead the Recovery
The recovery of large-cap tech stocks helped offset Monday’s losses in the stock market. Investors actively bought shares after the sharp sell-off, leading to a broad market rise. One supporting factor was a strong earnings season: Royal Caribbean Cruises Ltd ($RCL) surged 12% after posting a higher-than-expected full-year earnings forecast, while Invesco Ltd ($IVZ) gained over 8% on a quarterly revenue report exceeding consensus.
However, not all companies fared well. General Motors ($GM) lost more than 8% due to concerns over potential tariff threats from former U.S. President Donald Trump. Lockheed Martin ($LMT) suffered even more, falling over 9% on a disappointing annual profit forecast.
Tariff Threats and Market Impact
Donald Trump’s remarks about potential new tariffs negatively affected the stock market. He stated his intent to raise tariffs “far higher” than 2.5% on a wide range of goods—from metals to semiconductor chips. This heightened concerns about inflation, putting pressure on Treasury bonds.
Macroeconomic Data: Mixed Effects
U.S. economic indicators were mixed. On the positive side, December's new orders for non-defense capital goods, excluding aircraft, rose by +0.5% m/m, surpassing the forecast (+0.3%). Additionally, the Richmond Fed manufacturing index increased to -4, reaching an 8-month high. However, the Conference Board consumer sentiment index unexpectedly dropped by -5.4 points to 104.1, marking a 4-month low.
Amid these data points, investors eagerly await the conclusion of the Federal Reserve’s two-day meeting. The Fed is expected to keep interest rates unchanged in the 4.25%-4.50% range, but traders will closely watch Fed Chair Jerome Powell’s comments on inflation and economic growth.
Earnings Season: High Expectations
This week is packed with financial reports from major corporations. On Wednesday, investors will see results from Microsoft ($MSFT) and Tesla ($TSLA), while Apple ($AAPL) will report on Thursday. According to Bloomberg Intelligence, S&P 500 earnings in Q4 may grow by 7.5% YoY, making it the second-highest pre-season forecast in three years.
Interest Rates and Bond Market
The 10-year Treasury bond yield rose by 1.5 bps on Tuesday to 4.549%, driven by the stock market rebound and reduced demand for safe-haven assets. However, demand for the 7-year bond auction exceeded expectations, helping bonds recover from intraday lows. European bonds also saw yield increases: German bonds rose +3.4 bps, while UK bonds climbed +2.9 bps.
International Markets Performance
Stock markets outside the U.S. showed mixed results. The European Euro Stoxx 50 gained +0.14%, Japan’s Nikkei 225 declined by -1.39%, and China’s Shanghai Composite remained closed due to the Lunar New Year holiday.
Market Leaders and Laggards
Top Gainers:
Nvidia ($NVDA) +8%
Apple ($AAPL) +3%
Microsoft ($MSFT) +2%
Meta ($META) +2%
Amazon ($AMZN) +1%
Royal Caribbean Cruises ($RCL) +12%
Invesco ($IVZ) +8%
Crowdstrike ($CRWD) +9%
MongoDB ($MDB) +7%
Datadog ($DDOG) +6%
Top Losers:
Lockheed Martin ($LMT) -9%
General Motors ($GM) -8%
Texas Instruments ($TXN) -3%
Micron Technology ($MU) -3%
Polaris ($PII) -9%
Sysco ($SYY) -5%
Synchrony Financial ($SYF) -4%
Paccar ($PCAR) -2%
Conclusion
The tech sector’s recovery gave the market a strong boost, but uncertainty surrounding tariff threats remains. The earnings season continues to influence stock prices, and the coming days could be pivotal for market direction. Investors are looking for signals from the Fed on monetary policy while closely monitoring earnings reports from major companies, which may set the tone for market movements in the coming weeks.