Traders work at the New York Stock Exchange on Jan. 27, 2026.
NYSE
The S&P 500 pulled back as investors rotated out of technology stocks into shares more broadly linked to improvements in the economy.
The broad market index fell 0.7%. The 30-stock Dow dipped 0.1%, after earlier rising as much as 0.5% to touch 49,653, a new record. The Nasdaq Composite shed 1.3% with Nvidia, Microsoft and software shares declining.
However, there were a few bright spots in markets. Walmart surpassed a $1 trillion market capitalization threshold on Tuesday following an eye-watering stock climb driven by its digital businesses growth and acquisition of new customers, joining a small group of stocks that have crossed that mark. The retail name was last up nearly 3% on Tuesday.
In the health care sector, Merck posted fourth-quarter earnings and revenue that topped estimates on strong demand for its cancer immunotherapy Keytruda and some of its other products. The pharmaceutical company was up 3.5%, making it the biggest gainer in the Dow.
PepsiCo earnings were also strong, fueled by improving organic sales across its business — a fact that pushed up shares about 4%. Elsewhere, bank stocks were also in the green. JPMorgan and Wells Fargo rose 2%, while Citigroup gained about 1%.
Shares of Palantir jumped 6% after the defense tech company gave strong fourth-quarter financial results and upbeat guidance.
But most technology shares were in the red. Nvidia and Microsoft shed 2% apiece with both AI bellwethers adding to their losses for the year. Software stocks continued their 2026 tumble with shares like ServiceNow and Salesforce down 7% and 5% respectively on Tuesday.
“Revenue trends look incredibly solid, but at the margin, there continues to be some concerns emanating around the software space, in particular, related to the potential disintermediation that can occur from artificial intelligence,” U.S. Bank Asset Management Group senior investment director Bill Northey told CNBC. “And I think that’s a story that is still yet to be written, but ultimately, we’re seeing that reflected in sentiment at this point in time.”
But helping sentiment Tuesday was a rebound in silver and gold prices, with spot gold up 5% and spot silver up 10% on the day. Gold and silver have been the most popular trades of retail traders this year. Big losses in silver last week raised fears that the trade unraveling would trigger a risk-off mentality for the group across the board.
Investors this week are digesting more than 100 S&P 500 companies reporting earnings results. In addition to Alphabet, fellow “Magnificent Seven” giant Amazon is slated to report later this week. Tech earnings will be in focus as investors look for signs of AI-driven efficiency and profit growth, particularly after the market’s unforgiving reaction to Microsoft’s results last week.
“The themes that have been driving risk assets higher — the Federal Reserve obviously not tightening rates, probably reducing rates a little bit more this year, the strong economy and profit backdrop and the tariff story not getting worse … you still have those tailwinds in place,” Solus Alternative Asset Management strategist Dan Greenhaus said Monday on CNBC’s “Closing Bell.” “The AI story is still driving markets.”
“I think when you put all of that together, you might get a little more volatile in February, but what’s driving the market is still there,” Greenhaus added.
