[New York Stock Exchange] All Three Major Indices Close Higher... Big Tech Earnings Expectations Outweigh Shutdown Fears

Bargain Hunting Boosts Market After Opening
Apple and Meta Rise Over 2% Ahead of Earnings Announcements

On January 26 (local time), all three major U.S. stock indexes closed higher on the New York Stock Exchange. This is interpreted as investors maintaining optimism ahead of earnings announcements from major big tech companies.

On this day, the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 49,412.40, up 313.69 points (0.64%) from the previous trading day. The S&P 500, which tracks large-cap stocks, rose by 34.62 points (0.50%) to 6,950.23, while the Nasdaq Composite gained 100.11 points (0.43%) to finish at 23,601.36.

Before the market opened, stock indexes started the session lower. This was due to the aftermath of former President Trump threatening over the weekend to impose a 100% tariff on Canadian products if Canada signs a trade deal with China.

Volatility was also heightened by the fact that one civilian was shot and killed by Immigration and Customs Enforcement (ICE) in Minnesota over the weekend. The U.S. Democratic Party raised concerns over ICE's killing of a civilian and announced it would not cooperate in passing the budget, fueling worries about a potential government shutdown (temporary suspension of government operations).

The Democratic Party insists that the budget for the Department of Homeland Security, which oversees ICE, should be handled separately. If the budget is not passed by January 30, the U.S. federal government will once again face a shutdown. As these negative developments accumulated over the weekend, U.S. stock indexes remained in negative territory until just before the opening bell.

However, after the market opened, bargain hunting quickly emerged, and the indexes ultimately closed higher. Despite Trump's tariff threats against Canada, the prevailing view was that he would ultimately back down ("TACO"-Trump Always Chickens Out). Additionally, it was widely expected that Congress would avoid a shutdown ahead of the midterm elections.

Expectations for big tech earnings this week are believed to have driven the stock market. On January 28, Microsoft, Tesla, and Meta will release their fourth-quarter results for last year, followed by Apple on January 29.

According to financial information provider FactSet, 76% of companies that have reported fourth-quarter results so far have exceeded expectations. Tom Heinlein, domestic investment strategist at US Bank Asset Management, said, "Despite policy uncertainty and geopolitical instability, consumers are still maintaining healthy spending patterns," adding, "Companies appear to be performing well in terms of profitability while continuing to invest in artificial intelligence (AI) and other productivity tools."

Apple and Meta both rose more than 2% ahead of their earnings announcements. Microsoft also gained 1%. All three companies have seen sluggish stock performance in recent months. This is interpreted as investors buying shares in advance of their earnings releases.

In contrast, Tesla fell for a second consecutive day ahead of its earnings announcement. After peaking at $498.83 on December 22, the stock has been under significant downward pressure.

Amid rising uncertainty and concerns about high valuations, major semiconductor stocks by market capitalization also faced heavy selling. Micron Technology and AMD both fell by around 3%, while Intel, which recently issued a disappointing first-quarter outlook, dropped 5.72%.