Hello, I'm Eric Criscuolo, Market Strategist at the New York Stock Exchange, and this is Market Storylines. Every week we’re here to keep you up to date on the key trends and events driving global markets. We’re recording on Thursday, January 29. Let’s dive in.
In our last episode my colleague Michael discussed the major events from last week: Greenland, Davos, and the global backup in yields triggered in Japan. Equities finished the week slightly lower with the S&P 500 equal-weight index modestly outperforming the main market cap weighted index. This was a general continuation of the broad rotation in equity leadership we’ve seen in 2026. While Tech was the clear market leader last year, other sectors pushed Tech from that position at the start of this year. It was notable though, that last Friday the Russell 2000 small cap index had its 15 day streak of outperforming the S&P 500 come to an end. That was the longest winning streak since 1996.
As we started this week, that equity rotation, from large to small and out of Tech, continued to rotate. And like someone unable to stop their 180 from turning into a 360, we started to see Tech and Mega caps come back around into a leadership position. We ended Wednesday with Mega Cap Growth stocks as the best performing group for the week. The S&P 500 was outperforming the equal-weight index and small caps lagged.
On the macro side of things, this week’s main event turned into a big non-event. We’re talking about the Fed rate decision and Chair Powell’s press conference. You can read our recap on the NYSE website. Long story short, there wasn’t much sizzle or steak, but to be honest there wasn’t much expected. The Fed kept rates unchanged. Chair Powell did his own rendition of We Don’ Talk About Bruno when asked about anything that wasn’t monetary policy. We Don’t Talk About Other Officials’ Comments. We Don’t Talk About Subpoenas. We Don’t Talk About the Dollar and We Don’t Talk About His Job Status. Also, no surprise announcement by Trump on his nominee for Fed Chair. The S&P 500 hardly moved in the last two hours of trading.
One area that should bear close watching is the weakness in the Dollar, which fell hard last Friday on speculation of upcoming intervention to strengthen the yen. The Dollar’s weakness has continued this week.
With the Fed meeting a hill of beans, the market moved its gaze back to earnings as mega cap names reported after the close on Wednesday. Results were generally solid and above estimates across the brigade of companies reporting.
Meta was the big winner, with shares up 10% after posting a big revenue print and importantly going into detail on how AI is driving revenue growth. That is a key battleground between Bulls and Bears. The company will also increase capex by about 70% next year to around $125 Billion, or about 40 times the GDP of Greenland.
IBM was up over 5% on AI-related strength too. On the other hand, Microsoft was hit hard, down over 10% despite what looked like strong revenue and EPS. The weakness is chalked up to above-the-clouds expectations as well as concern that a huge chunk of future revenue is still tied to OpenAI. Outside of tech, Caterpillar and Mastercard traded well after their earnings as did Royal Caribbean, which drove the Travel and Leisure names higher. Part of that is probably the expected flood of demand from people scrambling to get the hell out the snowy, icy mess they’re currently in. Software names had started to show some signs of life, or at least stability, after being under pressure for months, but on Thursday the group is seeing large selling pressure, and not just in Microsoft, as AI as an existential risk remains a significant pillar for Bears.
Commodities, in particular metals, have been a top story this year and their near parabolic moves have drawn a huge amount of attention. That largely continued this week, but Thursday brought some truly exceptional, violent intraday moves. We’ll highlight one: Gold. After starting the day up 2% and breaking above $5400, it headed higher to almost $5600. Then at 10am, the bottom completely fell out, dropping $400 in about 20 minutes, to $5100, only to regain more than half the drop over the next hour. Gold is now up over 1% on the day after trading in a giant 10% range. One asset class not participating with metals is crypto. Bitcoin continues to struggle to sustain any momentum above its 50 day moving average.
So where does that leave us this week? As we record this, the S&P 500 is up slightly for the week, while the equal-weight and small caps are lower, with the Russell down about 1%. Tech is back in the top position, driven by the semiconductor names. Healthcare is the lagging sector, with managed care names getting hit on soft Medicare payment rates. Tools and Med Devices are also under pressure. Other high beta/high risk areas like neoclouds and quantum computing are also selling off, contributing to the Russell’s underperformance.
Let’s take a look at what’s coming up. Earnings will continue to supply the main catalysts. Some of the more significant reports ahead of us will include consumer-facing names like American Express, Disney, Chipotle and YUM Brands. Exxon and Chevron will provide a look into the energy markets as commodity prices have seen exceptional gains. Apple reports tonight and Amazon, Alphabet and AMD will also report next week. Healthcare will see a big step up with major pharma names Lilly, Merck and Pfizer along with Med Device maker Boston Scientific. Industrial names, which have rode the AI tailwind will include Hubbell, Eaton, Illinois Tool Works, Emerson and Carrier. And Intercontinental Exchange, parent of the NYSE, will also report.
On the economic calendar, the headliner comes on Friday with the January non-farm payrolls. ISM Manufacturing and Services, JOLTS employment, Challenger job cuts and the weekly initial claims data will fill the rest of the week. The ECB will have an interest rate decision as well.
Moving from macro to astronomical, NASA is preparing to launch four astronauts toward the moon in the first human lunar flight in more than 50 years. The launch could take place on several dates between February 6 and April 6. February 6 is next Friday.
That’s a wrap for this week. You can watch Market Storylines on TV.NYSE.com or on the NYSE YouTube Channel. You can also listen on the Inside the ICE House Podcast feed. Thanks for joining me. I’m Eric Criscuolo. We’ll see ya next week. To Infinity, and Beyond!