Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., Jan. 21, 2026.
Brendan McDermid | Reuters
The S&P 500 rose to a new all-time intraday high on Tuesday, aided by gains in Big Tech, as traders awaited earnings from companies in the sector. Traders also looked ahead to the Federal Reserve’s first rate decision of the year, due Wednesday.
The broad market index gained 0.41% and posted a closing record of 6,978.60, while the Nasdaq Composite climbed 0.91% to end at 23,817.10. The Dow Jones Industrial Average struggled, losing 408.99 points, or 0.83%, and settling at 49,003.41. A nearly 20% drop in UnitedHealth weighed on the 30-stock index.
Apple advanced more than 1%, while Microsoft rose more than 2%. More than 90 S&P 500 will have reported earnings by the end of the week. Meta Platforms and Microsoft, as well as fellow “Magnificent Seven” giant Tesla, are all due Wednesday. Apple will share its results on Thursday.
“Everybody is watching anything that gives you insight into the [artificial intelligence] narrative,” said Thomas Martin, senior portfolio manager at Globalt Investments, adding that investors will be focused on the companies’ capital spending levels and anything related to the monetization of AI. “It’s all going to be about commentary about that in addition to the amount of money that they’re spending, both on the capex line and the opex line.”
Concerns around stretched valuations plagued shares of key names in the AI trade toward the end of last year, weighing on the broader market as fears that there may be a tech bubble grew. Martin believes that while questions remain surrounding the technology, such as its return on investment, investors’ appetite will continue — at least over the next couple of years.
“AI isn’t going away,” he said. “Building of data centers isn’t going away. The usage of it, the usage of the models, the advent of agents, robotics, etc. — all that stuff is just going to continue its trajectory of discovery.”
“It’s going to be backwards and forwards, but we expect it to be with a positive bias,” Martin said about AI’s market impact.
Shares of several big-name health insurers were among the laggards Tuesday, plunging after the Centers for Medicare & Medicaid Services proposed raising payments to Medicare Advantage insurers by a net average of just 0.09% in 2027. Shares of Humana slid 21%, while CVS Health lost 14%.
Looming this week is the Fed’s first policy decision of the year. The central bank is widely expected to keep its key rate at a target range of 3.5% to 3.75%, but traders will search for clues on when future cuts may come. Fed funds futures trading still suggests there could be two quarter percentage point cuts by the end of 2026, according to the CME FedWatch Tool.