Stocks rose on Tuesday as gains in most major industries overshadowed underwhelming earnings from some tech heavyweights. About 350 companies in the S&P 500 climbed, with Nvidia Corp. leading gains in chipmakers.
However, a gauge of the “Magnificent Seven” megacaps sank 1.5% as Alphabet Inc.’s results drove Google’s parent to its worst plunge in over a year. Advanced Micro Devices Inc. tumbled 6.3% on a disappointing outlook.
Wall Street has been whipsawed by uneven economic data, trade tensions, and questions on whether the billions of dollars spent on artificial intelligence will start to pay off. To Mark Hackett at Nationwide, the flurry of market-moving headlines in the first few weeks of 2025 serves as a stark reminder to investors that volatility can emerge unexpectedly. Ed Yardeni, founder of his namesake research firm, commented, “Within the U.S. stock market, we like large caps — particularly S&P 493 companies — which should expand profit margins as they adopt productivity-boosting technologies.
Stocks rise despite tech weakness
We do not believe the Magnificent Seven are grossly overvalued. However, we see room for the S&P 493 to outperform.”
The S&P 500 rose 0.4%, the Nasdaq 100 added 0.4%, and the Dow Jones Industrial Average gained 0.7%.
UnitedHealth Group Inc. pared losses to 1% after contacting the U.S. Securities and Exchange Commission with concerns over an investor post suggesting the company overstated profits. Daniel Skelly, head of Morgan Stanley’s Wealth Management Market Research & Strategy Team, noted the volatility in the stock market as it navigates a shifting tariff landscape and mixed earnings.
“The S&P 500 hit new record highs less than two weeks ago, but taking a step back, it’s really been in a ‘choppy consolidation’ since early December,” Skelly said. Legendary short-seller Jim Chanos emphasized the unpredictability of risks facing U.S. markets, referencing the recent DeepSeek concern. “The real risks will be something like DeepSeek that comes out of left field that changes people’s thinking,” Chanos said in an interview with Bloomberg TV.
As traders gear up for Friday’s jobs report, data showed employment at U.S. companies picked up in January more than forecasted, highlighting resilient labor growth. Federal Reserve officials are closely tracking developments in the jobs market to assess interest rate adjustments this year.
