[New York Stock Exchange] S&P 500 Breaks 7,000 Intraday Led by Semiconductor Stocks (Comprehensive)

Major Indexes End Flat
Fed Holds Rates as Expected
Most Other Sectors Decline

Reuters Yonhap News

On January 28 (local time), the U.S. Federal Reserve (Fed) kept its benchmark interest rate unchanged, and the three major stock indices on the New York Stock Exchange closed near flat. The S&P 500 index set a new intraday record by surpassing the 7,000 mark for the first time, driven by a strong rally in semiconductor stocks at the opening.

On this day, the Dow Jones Industrial Average closed at 49,015.60, up 12.19 points (0.02%) from the previous session. The S&P 500 index ended at 6,978.03, down 0.01%, while the tech-heavy Nasdaq Composite closed at 23,857.45, up 0.17%. Although the S&P 500 index broke through the 7,000 mark for the first time in early trading, it failed to maintain this level by the close as it gave up its intraday gains.

The early rally in the market was led by semiconductor stocks. The Philadelphia Semiconductor Index surged more than 2% again. Seagate Technology's stock jumped 19% as its second-quarter earnings beat market expectations. The company stated that demand for AI data storage remains strong. Dutch semiconductor equipment maker ASML reported record orders and provided a positive outlook for 2026, but after giving up intraday gains, its stock closed down 2%. Intel soared 11% amid expectations that Nvidia and Apple could allocate orders to reduce their reliance on TSMC.

This continued rally in semiconductor stocks is believed to be driven by optimism surrounding artificial intelligence (AI) and the semiconductor sector. Jer Ellerbrock, a manager at Argent Capital Management, said, "Currently, demand far exceeds supply across the entire semiconductor industry."

However, the upward momentum did not spread to sectors outside semiconductors, and the S&P 500 came under increasing downward pressure toward the close. In fact, all sectors except for a few, such as energy, materials, communication services, and technology, ended lower.

As expected, the Fed kept its benchmark interest rate unchanged at its first Federal Open Market Committee (FOMC) meeting of the year. This put a pause on the cycle of three consecutive rate cuts last year. The Fed decided to maintain the U.S. benchmark rate at the current level of 3.5-3.75% after holding the FOMC meeting. This is the first time the Fed has held rates steady after three consecutive cuts since September last year. As a result of the Fed's decision, the interest rate gap between South Korea (2.50%) and the U.S. remains at 1.25 percentage points.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the federal funds futures market reflected an 88.6% probability of a rate hold in March. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) stood at 16.35, unchanged from the previous session.

Meanwhile, after the market closed, Microsoft (MS), Tesla, and Meta reported their fourth-quarter earnings for last year. Both MS and Meta exceeded expectations for both revenue and earnings per share (EPS). Tesla's EPS beat estimates, but its annual revenue declined for the first time ever. Starbucks reported adjusted EPS below expectations.