[BRIEFING.COM] The stock market is lower across the board following a slate of mega-cap earnings reports after the close yesterday. The DJIA (-0.3%) holds the narrowest gain amid mixed strength in the broader market, while considerable weakness in mega-cap and tech names keeps the S&P 500 (-0.7%) and DJIA (-1.4%) firmly lower, though they too are modestly improved from session lows. 

The top-weighted information technology sector (-2.8%) traded as much as 4.0% lower as Microsoft (MSFT 424.77, -56.86, -11.80%) has sold off sharply following its earnings release. The company topped earnings expectations, but massive capital expenditures combined with somewhat underwhelming cloud services growth and guidance that was just in-line with expectations weighed on the stock that had a nice run higher into its earnings report. 

Elsewhere in the sector, First Solar (FSLR 220.51, -28.90, -11.59%) also lags after BMO Capital downgraded the stock to Market Perform from Outperform with a $263 target, while IBM (IBM 312.41, +18.25, +6.20%) trades sharply higher after an impressive earnings report and bullish guidance. 

The consumer discretionary sector (-0.7%) is the only other S&P 500 sector that holds a loss of 0.5% or wider.  Tesla (TSLA 423.16, -8.30, -1.92%) provides weak leadership after its own earnings report. The company topped earnings estimates, which was an improvement after a miss last quarter, but a massive $20 billion capital expenditure guide for 2026 calls into question the near-term growth potential as the company looks to pivot from a traditional EV maker to an AI and robotics powerhouse.

Amazon (AMZN 239.70, -3.31, -1.36%) also trades lower, which helps further mask solid gains across travel-related names today after Royal Caribbean's (RCL 331.58, +39.98, +13.71%) earnings release. 

The Vanguard Mega Cap Growth ETF is down 1.8% today, and the market-weighted S&P 500 (-0.8%) underperforms the S&P 500 Equal Weighted Index (-0.1%) as a result. 

Meta Platforms (META 730.33, +61.60, +9.21%), however, is a mega-cap standout after a decisive earnings beat. The company is also committed to a massive capital expenditure range for 2026, but upside Q1 revenue guidance appears to be outweighing concerns about the elevated spending outlook.

The communication services sector (+1.7%) is now the best-performing S&P 500 sector of the day. 

Elsewhere, the energy sector (+1.6%) holds a similar gain as the price of oil increased $2.24 (+3.5%) to $65.42 per barrel amid escalating tensions between the U.S. and Iran. 

While sector strength has tilted positive for most of the session, only five S&P 500 sectors remain above their unchanged levels as the market's modest rebound from session lows has met some resistance. 

Outside of the S&P 500, the Russell 2000 (-0.5%) and S&P Mid Cap 400 (-0.6%) are also under pressure today. 

So far, today's action has been defined by a definitive move lower in most mega-cap names after Microsoft's pullback. 

In addition to the earnings-heavy action, the Senate recently failed to pass a government bill, making a shutdown this weekend a likely possibility. However, both sides are working on a compromise to limit time of government shutdown.

 Reviewing today's data:

• November Trade Balance -$56.8 bln (Briefing.com consensus -$43.5 bln); Prior was revised to -$29.2 bln from -$29.4 bln
  • The key takeaway from the report is that it will create a drag on Q4 GDP growth expectations. A possible silver lining, though, is that the import activity could be construed as a reflection of increased demand in the U.S.
• Weekly Initial Claims 209K (Briefing.com consensus 205K); Prior was revised to 210K from 200K, Weekly Continuing Claims 1.827 mln; Prior was revised to 1.865 mln from 1.849 mln
  • The key takeaway from the report is that it corroborates the idea that labor market conditions are still reasonably good to promote solid consumer spending activity that will be supportive of ongoing economic growth and a Fed that can show more patience before cutting rates again.
• Q3 Productivity - Revised 4.9% (Briefing.com consensus 4.9%); Prior 4.9%, Q3 Unit Labor Costs - Revised -1.9% (Briefing.com consensus -1.9%); Prior -1.9%
  • With no changes, the key takeaway remained the same: this productivity report is the golden ticket for the economy (and the Fed, per chance), as it reflects strong growth without labor cost inflation.
• November Wholesale Inventories 0.2% (Briefing.com consensus 0.1%); Prior was revised to 0.2% from 0.5%
• November Factory Orders 2.7% (Briefing.com consensus 0.5%); Prior was revised to -1.2% from -1.3%
  • The key takeaway from the report is that transportation equipment orders, which are volatile, drove the increase in total factory orders.

[BRIEFING.COM] The major averages are steadily improving from this morning's sharp retreat as the market sees some modest buying interest in the early weakness.

Notably, the DJIA has recently reclaimed its flatline. 

Eight S&P 500 sectors trade higher, with several re-approaching their opening high levels from this morning. Earnings continue to be the main driver of price action, with multiple sectors' top- and bottom-performing names being reactions to earnings reports. 

[BRIEFING.COM] The S&P 500 (-1.0%), Nasdaq Composite (-1.9%), and DJIA (-0.3%) are modestly improved from session lows at midday. 

While much of today's coverage has focused on the dismal response to Microsoft's (MSFT 423.85, -57.78, -12.00%) earnings report, there is also a number of stocks posting solid gains in reaction to earnings. 

Meta Platforms (META 725.97, +57.24, +8.56%) delivered a powerhouse conclusion to 2025, signaling a rapid acceleration from a social media conglomerate to a "personal superintelligence" leader. While the stock is trading sharply higher following a decisive beat on revenue and EPS, the company is committing to an unprecedented level of infrastructure investment to fuel its AI-native transformation. This transition is underscored by a historic commitment to infrastructure, as the company is guided toward a massive capital expenditure range for 2026 to secure a strategic lead in the AI race. Furthermore, META's Q1 revenue guidance of $53.5-$56.5 billion arrived well ahead of expectations, supported by a healthy macro backdrop and continued monetization efficiency gains.

IBM (IBM 312.34, +18.18, +6.18%) is also sharply higher following an earnings beat. Revenue increased 12.2% year-over-year (+9% CC) to $19.69 billion, exceeding expectations and marking IBM's strongest constant-currency growth in more than three years. FY26 guidance was notably bullish, with management expecting 5%+ CC revenue growth and free cash flow up about $1 billion year-over-year, implying high-single-digit growth off its $14.7 billion FY25 base. IBM also guided Q1 CC revenue growth to be in line with the full-year 5%+ outlook.

Elsewhere, Southwest Air (LUV 47.14, +6.28, +15.37%) and Royal Caribbean (RCL 335.27, +43.67, +14.98%) are among the best-performing S&P 500 names after reporting earnings before the open. 

[BRIEFING.COM] Stocks are under pressure today as the reaction to yesterday's slate of mega-cap earnings has put considerable pressure on mega-cap and tech names. 

The S&P 500 (-1.1%), Nasdaq Composite (-2.0%), and DJIA (-0.4%) have traded steadily lower throughout the session, with the Russell 2000 (-1.1%) and S&P Mid Cap 400 (-1.0%) also facing pressure. 

Though seven S&P 500 sectors trade higher, a 4.0% slide in the top-weighted information technology sector weighs heavily on the major averages. 

Microsoft (MSFT 422.65, -58.98, -12.25%) is among the worst-performing S&P 500 names today, sinking after the company delivered a solid earnings report, but substantial capital expenditure and softer guidance prompt questions around its near-term growth potential. 

Chipmaker names are also under pressure after a solid day yesterday, with the PHLX Semiconductor Index down 1.8%. NVIDIA (NVDA 187.72, -3.80, -1.98%) is among the names that trade lower amid a tough day for mega-cap stocks. 

Meta Platforms (META 719.00, +50.27, +7.52%) is a standout of the group after topping earnings estimates and delivering encouraging guidance, while Tesla (TSLA 422.40, -9.06, -2.10%) now trades lower after an earnings beat of its own.

The Vanguard Mega Cap Growth ETF is down 2.3%. While the mega-caps rally ahead of earnings lifted the S&P 500 to fresh record highs earlier in the week, Microsoft's sharp move lower has bled into some broader selling pressure, forcing the major averages firmly lower as a result. 

[BRIEFING.COM] The S&P 500 (-1.4%), Nasdaq Composite (-2.5%), and DJIA (-0.7%) continue to widen their losses as mega-cap tech comes under increasing pressure. 

Microsoft (MSFT 423.18, -58.45, -12.14%) is facing a sharp retreat today despite delivering an impressive EPS beat with its fiscal Q2 (Dec) report. That said, the upside was the smallest EPS beat of the past four quarters, which may be tempering enthusiasm. Revenue rose a strong 16.7% year-over-year to $81.27 billion, topping expectations and marking a milestone as Microsoft surpassed $80 billion in quarterly revenue for the first time. Q3 (Mar) revenue guidance was in-line. Notably, Microsoft Cloud revenue exceeded $50 billion for the first time, underscoring sustained demand across its cloud portfolio.

Azure revenue grew 38% CC, modestly above prior guidance of 37% CC, though investor reaction was mixed as some expected a bit more upside given robust demand conditions.

Capital expenditures increased to $37.5 billion in Q2 from $34.9 billion in Q1, constraining free cash flow growth and raising questions about near-term return on investment.

[BRIEFING.COM] The S&P 500 (-0.7%) and Nasdaq Composite (-1.5%) continue to sink lower as tech names come under pressure today, while relatively broad strength elsewhere keeps the DJIA (-0.1%) close to its flatline. 

Factory orders jumped 2.7% month-over-month in November (Briefing.com consensus: 0.5%) following an upwardly revised 1.2% decline (from -1.3%) in October. Excluding transportation, factory orders increased 0.2% after declining 0.1% in October. Shipments of manufactured goods slipped 0.1% after increasing 0.1% in October.

The key takeaway from the report is that transportation equipment orders, which are volatile, drove the increase in total factory orders.

[BRIEFING.COM] The S&P (-0.3%), Nasdaq Composite (-0.7%), and DJIA (-0.1%) sit lower shortly after the open with some pressure in tech weighing on the major averages. 

The top-weighted information technology sector (-2.0%) is firmly lower this morning, with Microsoft (MSFT 430.23, -51.40, -10.67%) facing a sharp selloff after the company topped earnings estimates but issued softer guidance. 

The consumer discretionary sector (-0.7%) is the only other sector to trade lower, with Tesla (TSLA 424.82, -6.64, -1.54%) facing pressure despite trading higher in the premarket following its earnings report. 

Meta Platforms (META 721.84, +53.10, +7.94%), however, impressed investors with its guidance, sending the stock sharply higher and boosting the communication services (+1.2%) sector. 

Elsewhere, the energy sector (+2.6%) holds the widest gain as the price of oil climbs $2.94 (+4.7%) to $66.15 per barrel.

Just released, factory orders decreased 2.7% month-over-month in November (Briefing.com consensus: 0.5%) following a 1.3% decrease in November.

November Wholesale Inventories increased by 0.2% (Briefing.com consensus 0.1%), with the prior month's increase downwardly revised to 0.2% from 0.5%.

The stock market is poised for a higher opening following several economic data releases.

Initial jobless claims for the week ending January 24 decreased by 1,000 to 209,000 (Briefing.com consensus: 205,000), while continuing jobless claims for the week ending January 17 decreased by 38,000 to 1.827 million, which is the lowest level since September 21, 2024.

The key takeaway from the report is that it corroborates the idea that labor market conditions are still reasonably good to promote solid consumer spending activity that will be supportive of ongoing economic growth and a Fed that can show more patience before cutting rates again.

The revised Q3 productivity report didn't contain any new surprises or changes. The growth rate for Q3 productivity remained at an impressive 4.9% (Briefing.com consensus: 4.9%), while unit labor costs decreased 1.9% (Briefing.com consensus: -1.9%), unchanged from the advance report.

With no changes, the key takeaway remained the same: this productivity report is the golden ticket for the economy (and the Fed, per chance), as it reflects strong growth without labor cost inflation.

There was a change in the trade deficit. It widened to $56.8 billion in November (Briefing.com consensus: -$43.5 billion) from an upwardly revised $29.2 billion (from -$29.4 billion) in October. Exports were $10.9 billion less than October exports, and imports were $16.8 billion more than October imports.

The key takeaway from the report is that it will create a drag on Q4 GDP growth expectations. A possible silver lining, though, is that the import activity could be construed as a reflection of increased demand in the U.S.

The S&P 500 futures currently trade 17 points above fair value. 

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note with another new record in South Korea's Kospi (+1.0%) and a multi-year high in Hong Kong's Hang Seng (+0.5%). SK Hynix reported record revenue and profit for Q4. South Korea's industry minister is visiting Washington amid the delay in implementing the trade deal with the U.S. The Monetary Authority of Singapore concluded its latest meeting with no policy changes.

• In economic data:
  • Japan's January Household Confidence 37.9 (expected 37.1; last 37.2)
  • Singapore's Q4 Unemployment Rate 2.0% (last 2.0%)
  • Australia's Q4 Import Price Index 0.9% qtr/qtr (expected -0.2%; last -0.4%) and Export Price Index 3.2% qtr/qtr (last -0.9%)
  • New Zealand's December trade surplus NZD52 mln (expected surplus of NZD30 mln; last deficit of NZD355 mln). January ANZ Business Confidence 64.1 (last 73.6) and January NBNZ Own Activity 51.6% (last 60.9%)

---Equity Markets---

• Japan's Nikkei: UNCH
• Hong Kong's Hang Seng: +0.5%
• China's Shanghai Composite: +0.2%
• India's Sensex: +0.3%
• South Korea's Kospi: +1.0%
• Australia's ASX All Ordinaries: -0.2%

Major European indices trade on a mostly higher note while Germany's DAX (-1.1%) is revisiting its January low after underwhelming results from SAP. STMicroelectronics reported strong results and guidance. British Prime Minister Starmer visited Beijing today. Sweden's Riksbank held its policy rate at 1.75%, as expected.

• In economic data:
  • Eurozone's January Business and Consumer Survey 99.4 (expected 97.0; last 97.2). December Private Sector Loans 3.0% yr/yr (expected 2.9%; last 2.9%) and loans to nonfinancials 3.0% yr/yr (last 3.1%)
  • France's December jobseeker total 3.117 mln (last 3.129 mln)
  • Italy's non-EU trade surplus EUR8.39 bln (last surplus of EUR7.04 bln). November Industrial Sales -0.1% m/m (last -0.6%); 0.0% yr/yr (last 1.7%)
  • Spain's December Retail Sales 2.9% yr/yr (last 6.0%). January Business Confidence -3.0 (last -3.4)
  • Swiss December trade surplus CHF1.036 bln (expected surplus of CHF4.85 bln; last surplus of CHF3.841 bln)

---Equity Markets---

• STOXX Europe 600: +0.8%
• Germany's DAX: -1.1%
• U.K.'s FTSE 100: +1.0%
• France's CAC 40: +0.9%
• Italy's FTSE MIB: +0.8%
• Spain's IBEX 35: +1.1%

The S&P 500 futures currently trade 19 points above fair value. 

Just released, Initial jobless claims for the week ending January 24 were 209,000 (Briefing.com consensus: 205,000), down 1,000 from the prior week's revised level of 210,000 (from 200,000)

Continuing jobless claims for the week ending January 17 were 1.827 million, down 38,000 from the prior week's revised level of 1.865 million (from 1.849 million).

The U.S. trade deficit in November widened to $56.8 billion (Briefing.com consensus: -$43.5 billion) from an upwardly revised deficit of $29.2 billion (from -$29.4 billion) in October.

The revised Q3 Unit Labor Cost reading was unchanged from the preliminary reading of -1.9% (Briefing.com consensus -1.9%).

The revised Q3 Productivity reading was unchanged from the preliminary reading of 4.9% (Briefing.com consensus 4.9%).

Equity futures point to a modestly higher opening this morning following a flattish showing yesterday that saw stocks largely drift sideways ahead of key mega-cap tech earnings. 

Meta Platforms (META 728.10, +59.37, +8.9%), Tesla (TSLA 440.70, +10.24, +2.4%), and Microsoft (MSFT 448.50, -33.13, -6.9%) all reported earnings after the close yesterday, with each company topping expectations. However, the price action has been different among the stocks, with Meta Platforms issuing strong guidance while Microsoft's softer guidance and somewhat underwhelming cloud services revenue weigh heavily on the stock in the pre-market. 

Apple (AAPL 257.73, +1.29, +0.5%) will also report its earnings after the close today. 

Headlines are relatively quiet outside of earnings reports, but there are plenty to keep the market busy, with nearly 100 S&P 500 names set to report by the end of the week. 

In Washington, CNN reports that the White House and Senate are getting closer to a deal to avert a government shutdown. The deal would extend funding for Defense, Labor, State, and Transportation until September 30, while extending DHS funding for a shorter period of time so immigration changes can be worked out.

In corporate news:

• Meta Platforms (META 728.10, +59.37, +8.9%) beat EPS expectations by $0.67, beat revenue expectations, and guided Q1 revenues above consensus. 
• Microsoft (MSFT 448.50, -33.13, -6.9%) beat EPS expectations by $0.23 and beat revenue expectations. The company saw Azure revenue growth of 38% CC vs. 37% CC prior guidance. 
• Nvidia (NVDA 191.08, -0.44, -0.2%), Microsoft (MSFT), and Amazon.com (AMZN 241.87, -1.14, -0.5%) are aiming to invest $60 billion in OpenAI, according to The Information.
• Tesla (TSLA 440.70, +10.24, +2.4%) beat EPS expectations by $0.05 and reported revenues in line. 

Reviewing overnight developments: 

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note with another new record in South Korea's Kospi (+1.0%) and a multi-year high in Hong Kong's Hang Seng (+0.5%). Japan's Nikkei: UNCH, Hong Kong's Hang Seng: +0.5%, China's Shanghai Composite: +0.2%, India's Sensex: +0.3%, South Korea's Kospi: +1.0%, Australia's ASX All Ordinaries: -0.2%.

In news:

• SK Hynix reported record revenue and profit for Q4.
• South Korea's industry minister is visiting Washington amid the delay in implementing the trade deal with the U.S.
• The Monetary Authority of Singapore concluded its latest meeting with no policy changes.

In economic data:

• Japan's January Household Confidence 37.9 (expected 37.1; last 37.2)
• Singapore's Q4 Unemployment Rate 2.0% (last 2.0%)
• Australia's Q4 Import Price Index 0.9% qtr/qtr (expected -0.2%; last -0.4%) and Export Price Index 3.2% qtr/qtr (last -0.9%)
• New Zealand's December trade surplus NZD52 mln (expected surplus of NZD30 mln; last deficit of NZD355 mln). January ANZ Business Confidence 64.1 (last 73.6) and January NBNZ Own Activity 51.6% (last 60.9%)

Major European indices trade on a mostly higher note while Germany's DAX (-1.1%) is revisiting its January low after underwhelming results from SAP. STOXX Europe 600: +0.5%, Germany's DAX: -1.1%, U.K.'s FTSE 100: +0.7%, France's CAC 40: +0.5%, Italy's FTSE MIB: +0.5%, Spain's IBEX 35: +0.8%.

In news:

• STMicroelectronics reported strong results and guidance. British Prime Minister Starmer visited Beijing today.
• Sweden's Riksbank held its policy rate at 1.75%, as expected.

In economic data:

• Eurozone's January Business and Consumer Survey 99.4 (expected 97.0; last 97.2). December Private Sector Loans 3.0% yr/yr (expected 2.9%; last 2.9%) and loans to nonfinancials 3.0% yr/yr (last 3.1%)
• France's December jobseeker total 3.117 mln (last 3.129 mln)
• Italy's non-EU trade surplus EUR8.39 bln (last surplus of EUR7.04 bln). November Industrial Sales -0.1% m/m (last -0.6%); 0.0% yr/yr (last 1.7%)
• Spain's December Retail Sales 2.9% yr/yr (last 6.0%). January Business Confidence -3.0 (last -3.4)
• Swiss December trade surplus CHF1.036 bln (expected surplus of CHF4.85 bln; last surplus of CHF3.841 bln)

[BRIEFING.COM] The S&P 500 (flat), Nasdaq Composite (+0.2%), and DJIA (flat) finished today's session in close proximity to their flatlines as the January FOMC meeting provided the market with no surprises as it gears up for a slate of mega-cap earnings reports after the close. The Russell 2000 (-0.4%) and S&P Mid Cap 400 (-0.2%) continue to underwhelm this week after a hot start to the year. 

Strength in tech names sent the S&P 500 and Nasdaq Composite higher at the open, with the S&P 500 notching another record intraday high on the heels of yesterday's records. The major averages then drifted lower until they reached their flatlines, trading in a steady range until the close. 

The FOMC's decision to keep the fed funds target rate unchanged came as no surprise to a market that is not expectant of another rate cut for several months. Fed Chair Powell's press conference was also in line with expectations, with Mr. Powell confirming that the decision to keep rates unchanged had broad support from the committee, and they are well positioned to make decisions on a meeting-by-meeting basis. 

Sector performance was largely muted, with four S&P 500 sectors finishing higher. 

The energy sector (+0.7%) led the way, supported by crude oil futures settling today's session $0.77 higher (+1.2%) at $63.16 per barrel. 

The information technology sector (+0.6%) was also among the relative outperformers, which helped prevent losses at the index level. 

Semiconductor stocks led the strength, with Seagate Tech (STX 442.93, +71.17, +19.14%) finishing as the best-performing S&P 500 name today.  Intel (INTC 48.78, +4.85, +11.04%) was another double-digit gainer after Digitimes reported that NVIDIA (NVDA 191.52, +3.00, +1.59%) is looking to shift its 2028 chip production to Intel. The PHLX Semiconductor Index finished 2.3% higher. 

NVIDIA itself was a mega-cap standout today, boosted by a report from The Wall Street Journal that China has approved the purchase of the company's H200 chips.

Elsewhere, Apple (AAPL 256.44, -1.83, -0.71%) traded lower, while Microsoft (MSFT 481.63, +1.05, +0.22%), which reports its earnings after the close, escaped with a slight gain. 

Mega-caps as a group saw a step back in momentum after three consecutive days of outperformance. The Vanguard Mega Cap Growth ETF finished 0.2% lower ahead of Microsoft's, Tesla's (TSLA 430.46, -0.44, -0.10%), and Meta Platforms' (META 668.73, -4.24, -0.63%) earnings after the close. 

Tesla's loss combined with weakness in Amazon (AMZN 243.01, -1.67, -0.68%) provided weak leadership for the consumer discretionary sector (-0.7%). Elsewhere in the sector, Starbucks (SBUX 95.16, -0.56, -0.59%) reversed a nice early gain. The company missed earnings estimates but initially traded higher as investors focused on a 4% increase in global comparative sales. 

Meanwhile, the real estate sector (-0.9%) finished with the widest loss, while the healthcare sector (-0.8%) also traded lower amid sustained weakness so far this week. 

Other notable earnings-related moves today include Texas Instruments (TXN 216.13, +19.50, +9.92%), AT&T (T 24.08, +1.08, +4.70%), and Amphenol (APH 145.98, -20.26, -12.19%).

Despite a few notable earnings-related moves, trading was generally subdued as investors awaited results from the market's largest companies. With the Fed delivering no market-moving surprises, attention now shifts to upcoming mega-cap earnings as the next potential catalyst for renewed momentum.

U.S. Treasuries retreated on Wednesday, but they inched up off session lows after the release of the January FOMC Statement, which did not contain any big surprises. The 2-year note yield settled up one basis point to 3.58%, and the 10-year note yield settled up three basis points to 4.25%.

• Russell 2000: +6.9% YTD
• S&P Mid Cap 400: +5.2% YTD
• Nasdaq Composite: +2.7 YTD
• DJIA: +2.0% YTD
• S&P 500: +1.9% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -8.5%; Prior 14.1%