S&P 500, Nasdaq rise as tech leads, UnitedHealth weighs on Dow amid earnings flood

US stocks mostly rose on Tuesday as tech hopes offset a growing list of political worries, a slide in UnitedHealth (UNH) dragged on the Dow, and Wall Street weighed a long-awaited India-EU trade deal.

The tech-heavy Nasdaq Composite (^IXIC) led the way up with a gain of 0.9%, while the S&P 500 (^GSPC) rose 0.4%. Meanwhile, the Dow Jones Industrial Average (^DJI) shed roughly 1% on the heels of gains for Wall Street indexes.

The S&P 500 moved into record territory as upbeat news from memory chipmakers helped lift optimism for tech on the eve of key megacap earnings reports. “Magnificent Seven” members Meta (META), Microsoft (MSFT), and Tesla (TSLA) are set to release results on Wednesday, followed by Apple (AAPL) on Thursday..

But the Dow retreated sharply as heavyweight UnitedHealth’s shares plunged almost 20%, despite posting a quarterly profit beat before the bell. Health insurer stocks tumbled after the Trump administration’s proposal for Medicare payment rates next year failed to deliver the expected hike.

Trade drama also gripped markets, schooled by the Greenland crisis to stay alert even with a packed earnings roster and the Federal Reserve meeting on deck. After almost two decades of stop-and-go trade talks, the EU said it had clinched the “mother of all deals” with India, seen as a rebuff to President Trump’s aggressive tariffs.

On Tuesday, a reading of consumer confidence dropped to its lowest level since 2014, falling below levels recorded in the depths of the pandemic as Americans face the price effects of an on-again, off-again tariff war and widespread uncertainty over the direction of trade policy.

The more pessimistic view of the economy comes as the Federal Reserve started its two-day meeting, which will bring its first policy decision of the year. While it is widely expected to hold the benchmark interest rate steady on Wednesday, markets are watching for signals on the timing of future rate cuts.

On the earnings front, General Motors (GM) posted a fourth quarter beat before the bell, raised its dividend, and unveiled a $6 billion share buyback plan. Results from American Airlines (AAL), Boeing (BA), and UPS (UPS) were other highlights on the morning’s docket.

Meanwhile, a potential government shutdown is looming as Senate Democrats attempt to block a bill funding the Department of Homeland Security. The political pushback follows the fatal shooting by federal agents of Alex Pretti in Minneapolis.

In a post to Truth Social on Monday, President Trump announced that border czar Tom Homan is headed to Minnesota to take over operations there, while Border Patrol commander Greg Bovino, who had been leading the efforts, has been re-tasked. The president also said in Truth Social posts that he had constructive calls with both Minnesota Governor Tim Walz and Minneapolis Mayor Jacob Frey.

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Natural gas futures drop as US braces for another potential winter storm

Predictions are strengthening around the potential for another major winter weather event to hit the US eastern seaboard this coming weekend, bringing more Arctic cold and snow to an area already heavily impacted by Winter Storm Fern.

Eastern Massachusetts, eastern North Carolina, and the southeastern corner of Virginia have a 60% chance or more of minor weather impacts from a storm, according to the US Weather Prediction Center. A wider area from South Carolina to Massachusetts currently has a 40% or higher chance of moderate effects through the coming weekend.

Another storm event would be likely to deepen an impact that has already sent the country reeling, as millions of people were blanketed in snow and experienced power outages. Natural gas futures (NG=F) climbed by more than 75% in the five trading sessions leading up to Jan. 22, the largest five-day jump since 1990.

Futures on the gas product, which is the dominant source of heating fuel in the US, were down roughly 4% on the five trading sessions preceding Tuesday.

Bank of America analysts have predicted that Winter Storm Fern will lower first-quarter US GDP by 0.5% to 1.5% on a seasonally adjusted quarter-on-quarter basis, basing their estimates in part on the effects of 2021’s Winter Storm Viola.

However, the bank noted that while “some output will be permanently lost” due to the storm, “we wouldn’t expect any lasting impact on the trajectory of the economy.”
RTX CEO says defense contractor will continue to pay dividends despite executive order

The CEO of major defense contractor RTX Corporation (RTX) said the company would continue to pay dividends to its investors despite attacks from President Trump over the practice and an executive order restricting the practice.

RTX shares picked up roughly 1.5% in the first minutes of trading Tuesday morning.

CEO Christopher Calio said on RTX’s earnings call on Tuesday, “We recognize our shareholders rely on our dividends, and they’ve come to expect our dividends. We’ve been paying them for decades on a quarterly basis. So we remain committed to the dividend.”

“We’re comfortable we can accommodate both that and the investment needs that come with delivering the current backlog and the potential future volumes on key programs.”

Calio’s comments come after President Trump criticized defense contractors’ divided and buyback practices in a Truth Social post.

“While we make the best military equipment in the world (no other country is even close!), defense contractors are currently issuing massive dividends to their shareholders and massive stock buybacks, at the expense and detriment of investing in plants and equipment. This situation will no longer be allowed or tolerated!” the president wrote.

Following the post, the president signed an executive order saying, “Effective immediately, [defense contractors] are not permitted in any way, shape, or form to pay dividends or buy back stock, until such time as they are able to produce a superior product, on time and on budget.”

RTX, one of a small handful of major defense contractors known as the “primes,” makes the Patriot missile defense systems and other weapons systems used widely by the US military.
Consumer confidence plunges to lowest reading since 2014

The Conference Board’s consumer confidence index unexpectedly fell 7 points in January to a reading of 84.5, its lowest level since 2014.

The expectations index, which measures consumers’ short-term outlook for business and labor market conditions, dropped 9.5 points to 65.1, below the 80 level that usually flashes a recession warning.

Consumers referred to inflation, especially for gas prices and groceries, in their responses, which were collected by Jan. 16. They also reported pulling back on big-ticket purchases, and their plans for spending on services in the next six months weakened.

“Mentions of tariffs and trade, politics, and the labor market also rose in January, and references to health/insurance and war edged higher,” said Dana Peterson, chief economist at the Conference Board.
Goldman Sachs: Investor risk appetite hits highest level since 2021

Investors are the keenest about risk since 2021, as exuberance for the economy continues to muffle geopolitical worries, Goldman Sachs strategists said in a client note on Monday.

The level of risk appetite from investors is at a historically abnormal level, Goldman noted, even as a bevy of macro tensions — tariff threats and escalating talk over an annexation from Greenland by the Trump administration, a steep drop-off in the yen’s valuation, and other worries — have led headlines in the new year.

Since 1991, the bank wrote, its risk appetite indicator has only crossed a reading of 1.0 six times. Its current level of 1.09 is in the 98th percentile of readings since 1991.

In most of those episodes, the strategists wrote, equities “delivered positive returns in the subsequent 12 months, but returns slowed down after about 6 months.”

Macro factors will likely play a leading role in outcomes for equities over the next few months, the bank said, writing that when macro surprises have remained positive, returns have skewed moderately positive, while a negative macro turn introduced more downside risk.

But if investors remain keen about risk, the bank said, it points to positive movement for equities.

“In essence, as long as the RAI remains elevated, possibly because of a supportive macro backdrop, equity returns can remain positive,” Goldman’s strategists wrote.
S&P 500, Nasdaq open higher as tech climbs, geopolitical tensions continue

US stocks mostly climbed at Tuesday’s open amid optimism for tech names, with a slide in UnitedHealth (UNH) dragging on the Dow and Wall Street weighing a long-awaited India-EU trade deal.

The S&P 500 (^GSPC) rose 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) picked up 0.6%. Moving in the opposite direction, the Dow Jones Industrial Average (^DJI) dropped roughly 0.7% on the heels of gains for Wall Street indexes.

The Dow (^DJI) retreated sharply as heavyweight UnitedHealth’s shares tumbled over 15%, as insurers more widely fell on news the Trump administration plans to keep Medicare payment rates steady next year.

Meanwhile, the S&P 500 (^GSPC) is eyeing fresh record highs as strong news from memory chipmakers helped a surge of tech strength ahead of key earnings. “Magnificent Seven” members Meta (META), Microsoft (MSFT), and Tesla (TSLA) are set to release results on Wednesday, followed by Apple (AAPL) on Thursday.
UnitedHealth sheds more than 15% on Q4 revenue miss, US plan to keep Medicare payments flat

UnitedHealth Group (UNH) met analyst expectations on earnings per share for the fourth quarter but reported fourth quarter and full-year 2025 revenues below expectations, according to results released Tuesday morning.

The stock shed more than 15% in premarket trading as earnings were overshadowed by a report from the Centers for Medicare & Medicaid Services (CMS) proposing that annual payments for Medicare Advantage insurers will increase by an average of just 0.09% for 2027. The announcement sent shares of health insurers tumbling on Tuesday morning.

UnitedHealth reported quarterly earnings per share of $2.11, in line with analyst expectations but down roughly 70% from the same quarter in 2024.

Meanwhile, fourth quarter and full-year revenue came in at $113.2 million and $447.6 million, respectively, compared to estimates of $113.7 million and $447.9 million.

Both fourth quarter and full-year revenues were up 12% against the previous year. The healthcare giant said it expects 2026 revenue to be above $439 billion, which would reflect a 2% year-over-year decline attributed to “right-sizing across the enterprise.”

The company also said it took a $799 million hit to full-year revenue due to a major cyberattack in February 2024 on its subsidiary Change Healthcare.

UnitedHealth’s medical care ratio, a key metric that measures the percentage of premium revenue spent on medical claims and healthcare services for policy members, was 89.1% for 2025. The company is forecasting a ratio of 88.8% plus or minus 50 basis points for 2026.
UPS forecasts upbeat 2026 revenue on shift to higher-value shipments

United Parcel Service (UPS) forecast higher annual revenue on Tuesday, as it ‌reduces low-margin deliveries for its biggest ‌customer, Amazon (AMZN), and shifts toward higher-paying shipments.

The delivery giant’s shares rose almost 4% before the bell.

Reuters reports:

Read more here.
American Airlines stock rises on record revenue and outlook, but earnings miss expectations

American Airlines (AAL) earnings were below expectations for the fourth quarter as the government shutdown affected flights, but the airline shared an upbeat outlook for the beginning of the year.

The stock rose roughly 4% in premarket trading.

The airline reported earnings per share of $0.15, compared to estimates of $0.30, according to S&P Global Market Intelligence. Record revenue of $14 billion was in line with estimates.

American said that the government shutdown impacted revenue by approximately $325 million in Q4.

While bookings slowed toward the end of the year, the airline said they picked up to start 2026.

“Following softer-than-expected bookings late in the fourth quarter, bookings strengthened meaningfully in January,” the company said. “Based on these bookings, the company expects solidly positive first-quarter unit revenue for the domestic entity and the system, with total revenue growing 7.0%-10.0%.”

For the full year, American expects adjusted earnings per diluted share in a range of $1.70-$2.70, with a midpoint above the estimated $1.85.
GM reports Q4 earnings beat, announces $6 billion stock buyback

Shares of General Motors (GM) popped in premarket after the “Big 3” automaker posted fourth quarter earnings that topped Wall Street estimates.

GM also upped its dividend and instituted a new $6 billion stock buyback plan.

Yahoo Finance’s Pras Subramanian reports:

Read more here.
Premarket trending tickers: Cloudflare, Salesforce and Intel

Cloudflare (NET) stock rose 9% before the bell on Tuesday following the launch of its new AI assistant, Clawdbot.

Salesforce (CRM) stock edged higher by 2% following news that the Army signed a $5.6 billion contract with the company. The deal is for 10-years and would give the military access to the company’s technology.

Intel (INTC) stock rose 3% during premarket hours on Tuesday after falling last week following its earnings report. The chipmaker’s stock has been down almost 10% over the last five days.
Fat Brands slumps after bankruptcy filing

Fat Brands Inc. (FAT), the owner of Fatburger, Johnny Rockets and Twin Peaks restaurants, saw its stock sink by 40% before the bell on Tuesday after filing for bankruptcy.

Bloomberg News reports:

Read more here.
EU and India clinch ‘mother of all deals’ in rebuff to Trump

From Bloomberg:

The European Union and India concluded a free trade agreement after nearly two decades of negotiations, as both sides seek to deepen economic ties and offset the impact of Washington’s tariff policies.

“We have concluded the mother of all deals,” European Commission President Ursula von der Leyen said on X on Tuesday. “We have created a free trade zone of two billion people, with both sides set to benefit.” Von der Leyen and European Council President Antonio Costa are in New Delhi to mark the moment.

Indian Prime Minister Narendra Modi, who announced the conclusion earlier in the day, said the agreement would strengthen India’s manufacturing and services sectors while boosting investor confidence in Asia’s third-largest economy.

The deal is expected to double EU goods exports to India by 2032 by eliminating or reducing tariffs on 96.6% of EU goods exports to India, according to a European Commission press release on Tuesday. These products range from automobiles and industrial goods to wine, chocolates and pasta. Meanwhile, the EU will eliminate or reduce tariffs on 99.5% of goods imported from India over seven years, India’s Ministry of Commerce and Industry said.

The conclusion of negotiations after years of halting talks reflects the rapidly shifting global alignment under US President Donald Trump. The EU, despite long clashing with Indian officials over trade matters, is now focused on shedding its economic reliance on the US and China. India is similarly trying to shake its protectionist reputation and offset a 50% Trump tariff, while at the same time balance its ties with Russia.

Read more here.
Deutsche Bank’s hot take on gold

Add another bullish Wall Street call on gold into the mix.

Deutsche Bank’s Michael Hsueh on the yellow metal in an early morning note:

“Gold’s continued rise reflects investment motives which may be persistent: higher reserve allocations, and investors raising allocations to non-dollar and real assets. We think USD 6,000/oz is achievable with a weaker dollar this year.”
Micron plans $24 billion memory chipmaking plant in Singapore

Shares of Micron Technology (MU) popped in premarket after the US memory chipmaker said it plans to invest $24 billion in building a new NAND facility in Singapore.

The plan to expand Micron’s manufacturing capability comes amid an acute AI demand-driven memory chip shortage that has hit a swathe of industries.

Reuters reports:

Read more here.
Gold holds above $5,000 for second day

Bloomberg reports:

Read more here.
Health insurers plunge in after-hours trade

Extended trading has seen stocks across a range of health insurers plummet. The drop was sparked by a report from the Centers for Medicare & Medicaid Services (CMS) that payment year-over-year will increase by an average 0.09% for 2027. This keeps payments relatively flat in a move well below Wall Street expectations.

Humana (HUM) saw its stock fall 12.5% following the payment rate announcement.

CVS Health (CVS) stock sank over 10

UnitedHealth Group Incorporated (UNH) shares dropped 8.6% with earnings for the beleaguered company due before the open on Tuesday. The drop is expected to weight down on the Dow Jones (^DJI) when trading resumes.

The Wall Street Journal has reported on the CMS rate over the past week, with an examination into health insurer billing revealing that government watchdogs have been concerned over pay practices in the health insurance industry.