US close: Markets stage partial rebound after tech sell-off

(Sharecast News) - US markets put in decent gains on Tuesday but only managed to claw back some of the prior day's tech-sector sell-off, with eyes starting to turn towards blue chip earnings and the Federal Reserve's first policy meeting on the year. The S&P 500 rebounded 0.9% to finish at 6,067.70 after a 1.5% slump on Monday while the Nasdaq put in a 2% gain to 19,733.59 after dropping 3.1%.

Tech stocks were hit on Monday by the news that Chinese startup DeepSeek had launched a free AI assistant it claims uses lower-cost chips and less data. DeepSeek's open-source AI model was reportedly comparable with those of OpenAI, Google and Meta despite the company spending just $6m on its base model, compared with the hundreds of millions (if not billions) of dollars that the US firms have shelled out.

The Dow, which was immune to Monday's tech-focused selling pressure, rose for the second day, gaining 0.3% to 44,850.35 as it closes in on its record closing high of 45,014.04 reached in early December.

"After yesterday's tech mauling markets have looked a lot healthier today, with modest gains made by some of yesterday's biggest losers including Nvidia and Microsoft," said Danni Hewson, head of financial analysis at AJ Bell.

"That's not to say investors aren't still deeply concerned about the amount of cash being spent on the pursuit of AI gains and as those earnings updates hit screens there will be a lot of eyes taking a hard look at how much additional spend is being earmarked versus how much it's delivering to the bottom line."

Monetary policy, macro news steals focus

The market spotlight on Wednesday will be on the US central bank's policy announcement, with the Fed expected to keep interest rates on hold. But what investors will really be interested in will be what policymakers will have to say on the outlook for inflation and rates going forward.

In economic news on Tuesday, US durable goods orders unexpectedly fell in December, dropping by their most in six months, as a result of a big decline in orders for transportation equipment. The total value of orders for manufactured durable goods was $276.1bn last month, down 2.2% on November, according to the US Census Bureau. The consensus forecast was for a 0.6% increase.

The S&P/Case-Shiller housing price index decreased to 332.59 points in November, down slightly from 332.90 in October.

US consumer confidence fell for a second straight month in January, according to the Conference Board, retreating to 104.1 from 109.5 in December and missing forecasts for a smaller drop to 105.8.

Finally, the Richmond Federal Reserve's manufacturing index rose to -4 in January, up from -10 in December and ahead of expectations of a more modest increase to -8. The reading was the strongest seen in the region since May 2024.

Tech stocks rebound

Microsoft rose after comments made by Donald Trump that the company is in talks to buy TikTok, the Chinese-owned social media platform. Asked if the tech giant was in discussions with ByteDance, the app's owner, the US president said: "I would say yes. A lot of interest. There's great interest in TikTok."

Microsoft's earnings will be released after the bell on Wednesday, along with Tesla and Meta Platforms, while Apple will report on Thursday evening.

Nvidia finished the day up nearly 9% after dropping 17% the previous day, which resulted in it shedding almost $600bn from its market cap, the biggest single-day drop for a US company in history. Broadcom, which was also hammered on Monday, put in decent gains, though peer AMD fell again.

Automotive giant General Motors beat Wall Street estimates on both the top and bottom lines but dropped 9% after warning that headwinds from the Trump administration could weigh on future profits.

Boeing was in demand despite reporting an annual loss of $11.83bn for 2024, marking its largest deficit since 2020. It posted a fourth-quarter loss of $3.86bn, significantly larger than Wall Street projections, with revenue of $15.24bn falling short of analysts' expectations.

Dow Jones - Risers

Microsoft Corp. (MSFT) $447.20 5.22% Apple Inc. (AAPL) $238.26 5.15% Salesforce.Com Inc. (CRM) $359.95 3.70% Boeing Co. (BA) $177.78 1.50% Goldman Sachs Group Inc. (GS) $637.80 0.71% International Business Machines Corporation (CDI) (IBM) $225.66 0.68% Amgen Inc. (AMGN) $280.30 0.60% JP Morgan Chase & Co. (JPM) $267.14 0.49% American Express Co. (AXP) $317.21 0.20%

Dow Jones - Fallers

Walgreens Boots Alliance, Inc. (WBA) $10.89 -9.40% Intel Corp. (INTC) $19.80 -4.77% Coca-Cola Co. (KO) $62.36 -2.36% Procter & Gamble Co. (PG) $166.19 -2.05% Cisco Systems Inc. (CSCO) $59.43 -2.04% Johnson & Johnson (JNJ) $150.38 -1.64% Nike Inc. (NKE) $74.42 -1.57% Home Depot Inc. (HD) $418.70 -1.42% Dow Chemical Co. (DOW) $41.44 -1.19% Caterpillar Inc. (CAT) $390.15 -1.19%

S&P 500 - Risers

Brighthouse Financial, Inc. (BHF) $58.33 15.05% Royal Caribbean Cr (RCL) $265.25 12.00% Invesco Ltd. (IVZ) $19.31 8.96% Carnival Corp. (CCL) $27.77 8.14% Norwegian Cruise Line Holdings Ltd (NCLH) $28.42 7.77% Meta Platforms Inc. (META) $674.33 6.67% Arista Networks Inc. (ANET) $106.54 6.22% Microsoft Corp. (MSFT) $447.20 5.22% Apple Inc. (AAPL) $238.26 5.15% Edwards Lifesciences Corp. (EW) $72.53 4.86%

S&P 500 - Fallers

Walgreens Boots Alliance, Inc. (WBA) $10.89 -9.40% Lockheed Martin Corp. (LMT) $457.45 -9.18% Micron Technology Inc. (MU) $88.25 -7.55% Hewlett Packard Enterprise (HPE) $21.46 -6.49% Juniper Networks Inc. (JNPR) $36.33 -6.08% Sysco Corp. (SYY) $72.28 -5.96% Seagate Technology Plc (STX) $100.27 -5.52% Nektar Therapeutics (NKTR) $0.84 -5.39% Leggett & Platt Inc. (LEG) $10.46 -5.34% Iron Mountain Inc (New) (IRM) $98.58 -5.01%

Nasdaq 100 - Risers

Meta Platforms Inc. (META) $674.33 6.67% Mercadolibre Inc. (MELI) $1,895.53 5.28% Microsoft Corp. (MSFT) $447.20 5.22% Apple Inc. (AAPL) $238.26 5.15% Workday, Inc. (WDAY) $270.43 5.08% Check Point Software Technologies Ltd. (CHKP) $202.94 4.87% Autodesk Inc. (ADSK) $309.93 4.57% Amazon.Com Inc. (AMZN) $238.15 4.47% eBay Inc. (EBAY) $67.19 3.61% Costco Wholesale Corp. (COST) $958.67 3.23%

Nasdaq 100 - Fallers

Walgreens Boots Alliance, Inc. (WBA) $10.89 -9.40% Micron Technology Inc. (MU) $88.25 -7.55% Seagate Technology Plc (STX) $100.27 -5.52% Intel Corp. (INTC) $19.80 -4.77% Broadcom Inc. (AVGO) $207.36 -4.25% Idexx Laboratories Inc. (IDXX) $417.86 -3.43% Western Digital Corp. (WDC) $62.87 -3.28% Analog Devices Inc. (ADI) $209.52 -3.25% Mondelez International Inc. (MDLZ) $56.91 -3.00% Cadence Design Systems Inc. (CDNS) $299.30 -2.40%