Stock Market Recap: Dow Rises, Tech Stocks Falter Amid Inflation Concerns
Market Performance: Mixed Results Across Major Indexes
On Tuesday, January 14, 2025, the U.S. stock market exhibited mixed performance as investors eagerly awaited crucial inflation data. The Dow Jones Industrial Average emerged as the day’s winner, advancing 0.4% to close at 42,449. However, the S&P 500 and Nasdaq Composite faced headwinds, with the S&P 500 eking out a modest 0.2% gain to 5,847, while the tech-heavy Nasdaq slipped 0.4% to 19,012.
Why Was the Market Up Today? Sector Rotation and Economic Optimism
The Dow’s outperformance can be attributed to a notable sector rotation, with investors shifting away from high-flying tech stocks and into more traditional sectors. Non-tech companies like Caterpillar (CAT), JPMorgan Chase (JPM), and UnitedHealth (UNH) led the gains, reflecting growing optimism about the broader economy’s resilience.
Tech Stocks Under Pressure
The technology sector, which has been a primary driver of the bull market, faced selling pressure. Nvidia (NVDA) shares dropped approximately 2% following new White House restrictions on advanced chip exports. Other tech giants, including Meta Platforms (META), Alphabet (GOOGL), Microsoft (MSFT), and Amazon (AMZN), also experienced declines. Apple (AAPL) shares fell 1% after reports of declining iPhone sales in the fourth quarter of 2024.
Upcoming Market Events: All Eyes on Inflation Data
Investors are keenly focused on two critical inflation readings this week:
1. Producer Price Index (PPI): Set for release on January 15, economists expect headline PPI to have grown by 0.4%, with core PPI (excluding food and energy) rising 0.3%.
2. Consumer Price Index (CPI): The December CPI report, due on January 16, will be a significant market catalyst, potentially influencing the Federal Reserve’s next moves on interest rate policy.
Major Stock News
Several notable stock movements and corporate announcements caught investors’ attention:
1. Moderna (MRNA): Shares plummeted 16.8% after the company slashed its 2025 sales guidance by $1 billion, citing expectations of revenue being weighted toward the second half of the year.
2. Mosaic (MOS): The fertilizer maker’s stock jumped 8% following an agreement to sell its Patos de Minas phosphate mine in Brazil.
3. CF Industries (CF): Shares rose 7.6% after an upgrade from Piper Sandler, citing improved outlook for grain prices and strong nitrogen fertilizer market pricing.
4. CVS Health (CVS) and Humana (HUM): Both stocks gained over 6% following a U.S. government proposal to boost Medicare Advantage reimbursement rates by more than 4% in 2026.
5. Edison International (EIX): Shares dropped 11.9% as investigations continue into whether the company’s electrical equipment played a role in igniting the Hurst Fire in Southern California.
Treasury Yields and Cryptocurrencies
The 10-year Treasury yield climbed to 4.79%, its highest level in over a year, reflecting ongoing concerns about inflation and potential delays in interest rate cuts. In the cryptocurrency market, Bitcoin (BTCUSD) traded around $93,500, while Ether (ETHUSD) dipped to about $3,100.
Looking Ahead: Earnings Season Kicks Off
As the market digests inflation data, the fourth-quarter earnings season begins in earnest this week. Major financial institutions, including JPMorgan Chase (JPM), Wells Fargo (WFC), and Goldman Sachs (GS), are set to report on January 17. Additionally, chip manufacturer Taiwan Semiconductor Manufacturing Co. (TSM) and healthcare giant UnitedHealth Group (UNH) will release their earnings reports, providing further insights into the health of various sectors of the economy.
In conclusion, today’s stock market recap highlights the ongoing shift in investor sentiment, with a rotation out of tech stocks and into more traditional sectors. As inflation concerns persist and earnings season begins, market participants will closely monitor economic data and corporate performance to gauge the direction of the U.S. economy in 2025.
