[New York Stock Exchange] S&P 500 Closes at Record High, Up 0.4% on Tech Gains

Big Tech Q4 Earnings Optimism Priced In
Insurers Disappointed by Medicare 'Freeze'
Market Sees 97.2% Probability of Fed Rate Hold

The three major stock indexes on the New York Stock Exchange closed mixed. While expectations ahead of last year's fourth-quarter earnings announcements from major big tech companies boosted technology stocks, a sharp decline in insurance stocks weakened overall investor sentiment toward blue-chip stocks.

On January 27 (U.S. Eastern Time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 49,003.41, down 408.99 points (0.83%) from the previous session. The S&P 500 Index rose by 0.41%, setting a new all-time high. The tech-heavy Nasdaq Composite Index ended up 0.91%.

Investor sentiment diverged between growth-oriented technology stocks and value-oriented blue-chip stocks. The sharp drop in insurance stocks led to a general sell-off in blue-chip stocks. The Dow Jones Healthcare Index plunged 11.03% on the day, marking the largest decline among all sector indexes.

By sector, healthcare fell by 1.66% and financials declined by 0.74%, while all other sectors rose. Utilities and technology both posted gains of over 1%.

The weakness in insurance stocks was primarily due to a government announcement. The Donald Trump administration stated that payments for Medicare programs provided by private insurers would increase by just 0.09% in 2027, effectively a freeze. Medicare is a government program that supports medical expenses for low-income individuals. As the market had expected an increase of 4% to 6%, disappointment was immediately reflected in stock prices.

Among individual stocks, UnitedHealth, the largest private insurer in the U.S., plummeted 19.61%, marking its worst day since the 22.38% plunge on April 17 last year. Humana shares also fell 21.13%, and CVS Health dropped 14.15%. As insurance stocks collapsed, overall investor sentiment toward blue-chip stocks weakened.

In contrast, technology stocks, especially big tech, had a strong day. All mega-cap tech companies with a market capitalization over $1 trillion rose, except for Tesla, which was slightly down. Microsoft, Amazon, and Broadcom all gained more than 2%, while Nvidia and Apple rose over 1%. The Philadelphia Semiconductor Index, dominated by semiconductor stocks, rebounded sharply by 2.40%. This is seen as a reflection of optimism ahead of the upcoming big tech earnings announcements.

Thomas Martin, Senior Portfolio Manager at Globalt Investments, said, "The market is paying attention to everything related to companies' capital expenditures, operating costs, and the monetization of artificial intelligence (AI). There will be advances and setbacks, but overall, we expect an optimistic bias."

Among individual stocks, U.S. automaker General Motors (GM) surged 8.75% after its fourth-quarter earnings beat market expectations. The Trump administration's announcement that it would raise tariffs on Korean automobiles and imports back to 25% also served as a boon for GM. U.S. aircraft manufacturer Boeing, despite reporting strong fourth-quarter results, fell 1.56%.

According to the CME FedWatch Tool, the federal funds futures market priced in a 97.2% probability of a rate freeze in January. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) stood at 16.35, up 0.20 points (1.24%) from the previous session.