Stock Market Update

The midweek session unfolded in a similar fashion to yesterday's action, with significant losses across tech and mega-cap stocks pressuring the S&P 500 (-0.5%) and Nasdaq Composite (-1.5%) while the DJIA (+0.5%) benefited from rotational strength into other corners of the market. 

While the DJIA made a run towards fresh record highs this morning, the S&P 500 dipped below its 50-day moving average (6,878.02) as selling pressure increased in the early afternoon, though the index recovered and closed just above the key technical level. 

Meanwhile, the Nasdaq Composite remains below its own 50-day moving average (23,390.10), with today's losses moving the index into negative territory for the year. 

The top-weighted information technology sector (-1.9%) widened its year-to-date loss to 5.2%. While the sector lagged for the entirety of the session, it is worth noting that some support kicked in after an early afternoon slide that saw the sector's losses for the day expand past 3.0% amid a sharp retreat in bitcoin.

Still, the PHLX Semiconductor Index (-4.4%) faced a considerable retreat as shares of Advanced Micro Devices (AMD 200.19, -41.92, -17.31%) plummeted despite beating earnings expectations and delivering upside Q1 guidance. NVIDIA (NVDA 174.19, -6.15, -3.41%) had a poor showing, though the sector's other "magnificent seven" components, Apple (AAPL 276.49, +7.01, +2.60%) and Microsoft (MSFT 414.19, +2.98, +0.72%), fared better. 

Even with the modest gain in Microsoft, software stocks faced an extension of yesterday's pressure, sending the iShares GS Software ETF 1.8% lower. 

Pressure across mega-cap names elsewhere pushed the communication services (-1.7%) and consumer discretionary (-1.2%) sectors lower as well. Alphabet (GOOG 333.34, -7.36, -2.16%) was a laggard ahead of its earnings report after the close. 

The Vanguard Mega Cap Growth ETF finished 1.4% lower, widening its negative start to 2026. 

With the exception of a modest pullback in the utilities sector (-0.4%), which outperformed yesterday, the broader market saw another solid day of rotational interest. 

Seven S&P 500 sectors finished higher, with five boasting a gain of 1.0% or wider. As a result, the S&P 500 Equal Weighted Index (+0.9%) outperformed the market-weighted S&P 500 (-0.5%) by a considerable margin.

The energy sector (+2.3%) once again captured the widest gain as crude oil futures settled today's session $1.97 higher (+3.1%) at $65.13 a barrel. Axios reported that diplomatic talks between the U.S. and Iran have hit a roadblock regarding nuclear negotiations. 

The materials sector (+1.8%) also saw an extension of yesterday's gains. Smurfit Westrock plc (SW 44.38, +3.48, +8.51%) led the advance after the company announced it would increase its quarterly dividend, while Amcor (AMCR 48.58, +3.66, +8.16%) finished similarly after topping EPS estimates and reaffirming its FY26 EPS guidance. 

Meanwhile, the health care sector (+1.2%) notched a solid gain after a lower finish yesterday, with Eli Lilly (LLY 1107.75, +104.29, +10.39%) and Amgen (AMGN 366.20, +27.61, +8.15%) among the top performers after beating earnings estimates. 

The real estate sector (+1.5%) advanced on broad strength, rounding out the top five, while the financials (+0.8%) and industrials (+0.2%) sectors captured more modest gains. 

Outside of the S&P 500, the Russell 2000 (-0.9%) and S&P Mid Cap 400 (+0.7%) finished mixed. 

Overall, the session reinforced the market’s recent tug-of-war between persistent pressure on tech and the resulting rotational strength elsewhere. The market has more key mega-cap earnings on tap, which will likely be key in determining whether leadership stabilizes or the current rotation continues.

U.S. Treasuries had another steady showing on Wednesday, keeping yields near levels seen during Tuesday's sideways session. The 2-year note yield settled down one basis point to 3.56%, and the 10-year note yield finished unchanged at 4.28%. 

• S&P Mid Cap 400: +5.8% YTD
• Russell 2000: +5.8% YTD
• DJIA: +3.0% YTD
• S&P 500: +0.5% YTD
• Nasdaq Composite: -1.5% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -8.9%; Prior -8.5%
• January ADP Employment Change 22K (Briefing.com consensus 43K); Prior was revised to 37K from 41K
• January S&P Global U.S. Services PMI - Final 52.7; Prior 52.5
• January ISM Non-Manufacturing Index 53.8% (Briefing.com consensus 53.7%); Prior was revised to 53.8% from 54.4%
  • The key takeaway from the report is that activity in the services sector grew at a steady pace in January at the same time prices paid for materials and services increased.