The S&P 500 barely managed a record closing high on Tuesday, its fifth straight day of gains with investor optimism ahead of megacap earnings reports being countered by a mixed reception to the latest earnings reports and a massive selloff in health insurer stocks.
UnitedHealth led losses in healthcare stocks and in the Dow Jones Industrial Average with a 19.6% tumble after the Trump administration proposed an increase in Medicare insurer payment rates. The plan was another woe added to the insurer's disappointing revenue forecast for 2026. Following suit were insurance peers Humana, down 21% and CVS, down 14.2%.
Investors were more encouraged by General Motors earnings, which saw its shares rally 8.7% after it reported higher fourth‑quarter core profit.
And with some high-profile earnings reports due out this week, technology stocks extended Monday's gains, with heavyweights Microsoft, Amazon, Nvidia, Apple, and Broadcom providing the market's biggest boosts.
With this, the Nasdaq touched its highest level since late October and the S&P 500 also touched an intraday record high and neared the 7,000 milestone, while also marking its fourth record closing high so far in 2026.
"There's a little bit of a bifurcated market today with the Dow down because of the announcements around Medicare premiums," said Phil Blancato, chief market strategist at Osaic Wealth in New York. "When you look at everything else, the market seems to be hanging in there waiting for a big week of earnings."
Also on Tuesday, U.S. consumer confidence unexpectedly deteriorated in January, slumping to its lowest level since 2014, but Blancato noted that surprisingly, the "pretty terrible number" didn't have much of an impact on the stock market.
Along with investor focus on earnings reports and U.S. policy decisions, Adam Rich, deputy chief investment officer and portfolio manager at Vaughan Nelson Investment Management noted that the recent decline in the U.S. dollar, including a drop of over 1% on Tuesday, is good news for U.S. equities as a weak dollar helps U.S. exports.
"This currency move is really positive for S&P earnings going forward," said Rich.
The Dow Jones Industrial Average fell 408.99 points, or 0.83%, to 49,003.41, the S&P 500 gained 28.37 points, or 0.41%, to 6,978.60 and the Nasdaq Composite gained 215.74 points, or 0.91%, to 23,817.10.
The technology sector rose 1.4% to lead gains among the S&P 500's 11 major industry sectors. Corning was the biggest gainer in the S&P 500 and the technology sector with a massive 15.6% rally. The Gorilla Glass maker signed a deal with Meta worth up to $6 billion for fiber-optic cables in AI data centers.
All eyes will be on Meta , Microsoft and Tesla on Wednesday when they kick off earnings reports for the so-called "Magnificent Seven" group of high-flying stocks. Their reports will test the resilience of the AI trade, which has underpinned Wall Street's rally for much of the past year.
In total, 102 S&P 500 companies are set to post earnings results this week. Of the 64 that had reported as of Friday, 79.7% have topped analyst expectations, as per data compiled by LSEG.
Elsewhere in earnings, trading in Boeing was choppy after it swung to a fourth-quarter profit due to a unit sale but reported bigger-than-expected losses in its two biggest divisions. Shares in the aerospace company ended down 1.6% after rising more than 2% earlier in the day.
And in airlines, American Airlines closed down 7% with the weekend's winter storm expected to weigh on its first-quarter results although its 2026 profit forecast topped estimates. JetBlue shares tumbled 6.9% on a wider‑than‑expected quarterly loss as it cited bad weather and the government shutdown during the quarter.
Bellwether United Parcel Service projected higher revenue for 2026 but by the end of the day its advance had dwindled to 0.2% while shares in rival FedEx rose 2.6%.
Fed watch
As if that wasn't enough, investors were also waiting to hear from the U.S. Federal Reserve, which will make a policy announcement on Wednesday after its two-day meeting.
Investors have been broadly expecting the central bank to leave interest rates unchanged but attention will be on policymakers' guidance on rates and its commentary on the economy while traders will also be alert to any signals around the Fed's next leadership.
Advancing issues outnumbered decliners by a 1.61-to-1 ratio on the NYSE where there were 693 new highs and 95 new lows. On the Nasdaq, 2,725 stocks rose and 2,056 fell as advancing issues outnumbered decliners by a 1.33-to-1 ratio.
The S&P 500 posted 36 new 52-week highs and 13 new lows while the Nasdaq Composite recorded 104 new highs and 123 new lows.
On U.S. exchanges 18.03 billion shares changed hands, just ahead of the 17.99 billion moving average from the last 20 sessions.
(Reporting by Sinéad Carew in New York, Pranav Kashyap and Twesha Dikshit in Bengaluru; Editing by Krishna Chandra Eluri and Aurora Ellis)
Copyright (2026) Thomson Reuters.
This article was written by Pranav Kashyap and Sinéad Carew from Reuters and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.