The S&P 500 Index ($SPX) (SPY) on Monday rose +0.63%, the Dow Jones Industrials Index ($DOWI) (DIA) rose +0.68%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose +0.59%. March E-mini S&P futures (ESH26) rose +0.56%, and March E-mini Nasdaq futures (NQH26) rose +0.49%.
Stocks saw support from lower T-note yields and the stronger-than-expected US durable goods orders report, which suggested a resilient US economy.
However, stocks were undercut by President Trump’s new threat of 100% tariffs on US imports from Canada, the possibility of a US government shutdown over ICE funding, lingering concerns about Greenland, and business and travel disruptions from the massive storm that just crossed the US. There is also political uncertainty about the Fed, as the FOMC is expected to leave rates unchanged at its meeting this week, potentially drawing new threats from Mr. Trump for a refusal to cut interest rates further.
Stocks were undercut on Monday by increased trade uncertainty after President Trump on Saturday threatened 100% tariffs on US imports from Canada if Canada signs a trade agreement with China. Canada is seeking other trade partners amid President Trump’s propensity for tariffs.
The risk of another partial government shutdown is also weighing on stocks. Senate Democrats threatened to block a government funding deal over Department of Homeland Security/ICE funding after the ICE shooting of an ICU nurse in Minnesota on Saturday. There could be a partial government shutdown when the current stopgap funding measure expires this Friday.
The dollar index on Monday fell -0.5% and hit a 4-month low amid speculation that the US might coordinate intervention with Japan to boost the yen, which would dovetail with Mr. Trump’s apparent view that a weak dollar is good for the US as a stimulus to US exports. US authorities reportedly contacted market participants last Friday to check dollar/yen prices, a possible precursor to intervention. The dollar is also lower as Mr. Trump’s new threat of 100% tariffs against Canada may encourage more foreign investors to pull capital from the US.
The weak dollar and general turmoil in the US pushed precious metals to new record highs again on Monday, supporting mining stocks.
US Nov durable goods orders rose +5.3% m/m, which was stronger than market expectations of +4.0% and more than reversed Oct’s revised -2.1% decline. Nov durable goods orders ex-transportation rose +0.5% m/m, stronger than expectations of +0.3%. Nov capital goods orders ex defense and aircraft, a proxy for capital goods spending, rose +0.7% m/m, stronger than market expectations of +0.3%.
The Chicago Fed’s Nov National Activity Index fell -0.04, which was a smaller drop than expectations of -0.20.
The Dallas Fed’s Jan manufacturing activity index fell -1.2, which was a smaller drop than expectations for an -8.5 point drop.
Q4 earnings season is in full swing, with 102 of the S&P 500 companies scheduled to report earnings this week. Earnings have been a positive factor for stocks, with 78% of the 64 S&P 500 companies that have reported beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4. Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.
The markets are discounting a 3% chance of a -25 bp rate cut at this week’s FOMC meeting on Tuesday and Wednesday (Jan 27-28).
Overseas stock markets are mixed today. The Euro Stoxx 50 is up +0.22%. China’s Shanghai Composite closed -0.09%. Japan’s Nikkei Stock 225 closed down by -1.79%.
Interest Rates
March 10-year T-notes (ZNH6) on Monday rose by +4 ticks. The 10-year T-note yield fell -1.4 bp to 4.211%. T-note prices closed slightly higher despite a slight +0.5 bp rise in the 10-year inflation expectations rate to 2.318% and the stronger-than-expected US durable goods report.
European government bond yields moved lower. The 10-year German bund yield fell -3.9 bp to 2.867%. The 10-year UK gilt yield fell -1.5 bp to 4.497%.
Swaps are discounting a 0% chance of a +25 bp rate hike by the ECB at its next policy meeting on February 5.
US Stock Movers
The Magnificent Seven closed mixed on Monday, led by gains of more than +2% in Apple (AAPL) and Meta (META). However, Tesla (TSLA) fell by more than -3%.
Mining stocks saw support from the new record highs in gold and silver, but closed mixed. Anglogold Ashanti (AU), Newmont Corp (NEM), and Freeport McMoRan (FCX) all closed up by more than +1%. However, Hecla (HL) fell by more than -5%, and Coeur Mining (CDE) fell by more than -2%.
Allied Gold (AAUC) rose by more than +4% after the news that Zijin Gold International will acquire the company.
CoreWeave (CRWV) rallied +6% after Nvidia invested another $2 billion in the company.
USA Rare Earth Inc (USAR) rallied nearly 8% on reports that the US government will take a stake in the company to boost US access to rare earth metals and minerals. The reports provided support for other rare earth companies, such as Niocorp Developments Ltd (NB), Critical Minerals Corp (CRML), and MP Materials Corp (MP).
Cisco Systems (CSCO) rose more than +3% after Evercore ISI upgraded the stock to outperform
from inline.
Cognizant Technology (CTSH) rose by more than +1% on an upgrade by Deutsche Bank to buy from hold.
Revolution Medicines (RVMD) fell by more than -16% after a WSJ report that Merck ended talks to acquire the company.
Earnings Reports(1/27/2026)
NextEra Energy Inc (NEE), United Parcel Service Inc (UPS), Boeing Co/The (BA), PACCAR Inc (PCAR), UnitedHealth Group Inc (UNH), RTX Corp (RTX), Roper Technologies Inc (ROP), Synchrony Financial (SYF), Sysco Corp (SYY), Northrop Grumman Corp (NOC), HCA Healthcare Inc (HCA), Kimberly-Clark Corp (KMB), General Motors Co (GM), Invesco Ltd (IVZ), Union Pacific Corp (UNP), Seagate Technology Holdings PL (STX), F5 Inc (FFIV), Packaging Corp of America (PKG), PPG Industries Inc (PPG), Texas Instruments Inc (TXN), BXP Inc (BXP).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
- Microsoft Reports Q2 Earnings Jan. 28. Is MSFT Stock a Buy Before Then?
- As IonQ Snaps Up SkyWater Technology for $1.8B, Should You Buy the Quantum Computing Stock Here?
- What's Next for Sandisk Stock After a 1,000% Rally?
- USAR Stock Is Solidly in Overbought Territory as Trump Invests in USA Rare Earth. Can You Still Chase the Rally Here?
