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Mega-cap earnings dominate a choppy week for stocks

The stock market started the week modestly higher but finished with a pullback as earnings dominated price action. 

The S&P 500 (+0.3%) managed a small weekly gain, while the Nasdaq Composite (-0.2%) and DJIA (-0.4%) retreated. Small- and mid-cap stocks underperformed, with the Russell 2000 (-2.1%) and S&P Mid Cap 400 (-1.4%) lagging.

Mega-cap earnings drove volatility throughout the week. Microsoft’s post-earnings retreat weighed on the information technology sector (-0.4% WTD) and contributed to weakness in software names. Apple’s stock moved only modestly higher after an impressive earnings report. Meanwhile, Meta Platforms’ strong gain helped the communication services sector (+4.2% WTD) lead the S&P 500, while Tesla rebounded on Friday following a SpaceX-related headline, offsetting its post-earnings slide

While earnings were the main driver of price action outside of the mega-cap complex as well, there were some other factors in play. The energy sector (+3.9% WTD) benefited from rising crude prices, the utilities sector (+1.7% WTD) rallied amid severe winter weather, and consumer staples (+0.8% WTD) and the materials sector (-1.2% WTD) lagged due to a sharp selloff in gold and silver on Friday.

The Fed remained in focus this week with the January FOMC meeting, which delivered no surprises and left rates unchanged, in line with market expectations that the Fed would hold off on cuts for several months. The nomination of former Fed Governor Kevin Warsh as the next Fed Chair also did not materially move markets.

Looking ahead, next week will continue to see a heavy slate of earnings with several more mega-cap tech names in the mix. Investors will be watching for upside guidance and indications that planned AI and capital investments can translate into durable returns, which will be key to reversing this week's softness.

  • S&P 500: +0.3% WTD
  • Nasdaq Composite: -0.2% WTD
  • DJIA: -0.4% WTD
  • S&P Mid Cap 400: -1.4% WTD
  • Russell 2000: -2.1% WTD

 

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Data and rates used were indicative of market conditions as of the date shown and compiled by Briefing.com. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Each company’s security affects the index in proportion to its market value. NASDAQ Composite Index is a market value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Dow Jones Industrial Average is a widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service-oriented firms. Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

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8076115.33 (Exp. 4/26)

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