Market turns to earnings

Entering a key stretch of earnings season, US stocks will attempt to bounce back from another week of choppy trading dominated more by political headlines than financial ones.

Last Tuesday the S&P 500 (SPX) suffered its biggest one-day decline (-2.1%) since October as tensions over Greenland ratcheted higher, but bounced back on Wednesday after President Trump said the US would not use force to acquire the arctic territory. Despite some upside follow-through over the next two days, the SPX still ended the week with a small loss:

The headline: Stocks dip for second week.

The fine print: After two weeks of political drama, markets may get a chance to turn their attention back to corporate performance and economics. This week could be an important week for the stagnant tech sector, as several of the market’s megacap AI leaders and high-profile semiconductor stocks are scheduled to release earnings.

The move: One chip stock that did announce earnings last week, Intel (INTC), beat its headline numbers but fell 17% on Friday after issuing disappointing guidance.

The numbers: Last week’s economic data was mostly delayed (and mostly ignored), but it painted a familiar picture—solid overall economic growth toward the end of last year (+4.4% final Q3 GDP) with sticky-but-stable inflation (+3% November core PCE Price Index).

The scorecard: The Nasdaq 100 (NDX) tech index led the market last week. The Russell 2000 (RUT) was the only major benchmark to hit new record highs, but it also sold off sharply on Friday:

Sector returns: The strongest S&P 500 sectors last week were energy (+3.1%), materials (+2.6%), and communication services (+1.1%). The weakest sectors were financials (-2.5%), real estate (-2.4%), and utilities (-2%).

Stock moves: Rapt Therapeutics (RAPT) +64% to $57.57 and Corvus Pharmaceuticals (CRVS) +166% to $21.41, both on Tuesday. PAVmed (PAVM) +95% to $12.05 on Wednesday. Bakkt (BKKT) -25% to $16.16 and Telesat (TSAT) -21% to $27.39, both on Tuesday.

Yields and the dollar: Despite jumping to a five-month high last Tuesday, the 10-year US Treasury pulled back to end the week unchanged at 4.23%. The US Dollar Index (DXY) fell 1.79 to a nearly four-month low of 97.60.

Futures: February gold (GCG6) hit record highs every day last week, closing Friday up $382 at $4,983.10 (prices topped $5,000 on Monday). Silver had an even bigger week, rallying more than 14% and topping $100 for the first time. March silver (SIH6) ended the week up $13.31 at $103.26. March WTI crude oil (CLG6) rallied $1.75 to $61.07.

It’s a big week for earnings, highlighted by megacap tech leaders, but also high-profile energy, aerospace and defense, and consumer names:

●Monday: Agilysys (AGYS), Logitech (LOGI), NVR (NVR), Teledyne (TDY)
●Tuesday: American Airlines (AAL), AMSL (ASML), Boeing (BA), Eagle Materials (EXP), F5 (FFIV), General Motors (GM), Kimberly Clark (KMB), Northrop Grumman (NOC), Qorvo (QRVO), Seagate (STX), Sysco (SYY), Texas Instruments (TXN), UnitedHealth (UNH), Union Pacific (UNP), United Parcel Service (UPS)
●Wednesday: Apple (AAPL), Automatic Data Processing (ADP), Amphenol (APH), Caterpillar (CAT), Danaher (DHR), General Dynamics (GD), GE Vernova (GEV), Levi Strauss & (LEVI), Lennox (LII), Lam Research (LRCX), Meta (META), Microsoft (MSFT), Murphy Oil (MUR), Starbucks (SBUX), AT&T (T), Tesla (TSLA), Visa (V)
●Thursday: Dover (DOV), Dow (DOW), Honeywell (HON), Lockheed Martin (LMT), Southwest Airlines (LUV), MasterCard (MA), Sherwin-Williams (SHW), Sandisk (SNDK), Western Digital (WDC)
●Friday: Aon (AON), American Express (AXP), Colgate-Palmolive (CL), Chevron (CVX), Regeneron Pharmaceuticals (REGN), Sofi Technologies (SOFI), Verizon Communications (VZ), Exxon Mobil (XOM)

In a week of mostly delayed economic data, the Fed meeting looms large. The Fed isn’t expected to cut rates on Wednesday, but Chair Powell’s press conference always has the potential to move the market:

●Monday: Durable Goods Orders
●Tuesday: S&P Case-Shiller Home Price Index, FHFA House Price Index, Consumer Confidence
●Wednesday: Fed interest rate decision
●Thursday: Trade Balance, Productivity and Labor Costs, Factory Orders, Wholesale Inventories
●Friday: Producer Price Index (PPI), Chicago PMI

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

Despite its relative strength vs. the SPX in recent months, the RUT’s performance requires a bit of longer-term perspective. For example, even though the RUT outperformed the SPX slightly in the second half of last year—and by a much wider margin so far this year—it still trails the large-cap index by more than 30 percentage points since the end of March 2020, and by more than 130 percentage points since the 2008 financial crisis lows.

That said, Morgan Stanley & Co. strategists still see additional potential upside for small caps, despite shrinking odds for Fed rate cuts this year (which would normally be expected to provide tailwinds for this segment of the market). With correlation between small-cap returns and real interest rates around zero (indicating yields are currently less important to performance), the strategists believe earnings will be the major factor determining performance. Small-cap earnings growth, they note, is at its strongest level since 2022, and relative earnings revisions breadth vs. large caps recently accelerated.¹  

So, while earnings from some of the market’s biggest companies could very well monopolize headlines this week, traders and investors may want to keep tabs on the numbers released by the market’s smaller names.

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¹ MorganStanley.com. Weekly Warm-up: Key Debates & Earnings Season Chartbook. 1/20/26.