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Anna's Markets Recap

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Saturday, 5:07 AM

January 31, 2026

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

The Gmail app usually clips the bottom quarter of our emails, we recommend you reading our full article online here.

What Moved Markets Last Week

The week of January 24-30, 2026 delivered a historic milestone: the S&P 500 crossed 7,000 for the first time ever. The index touched an intraday high of 7,002.28 on January 28 before retreating to close at 6,978.03 as the Federal Reserve held rates steady. Big Tech earnings dominated headlines. Meta surged 10% after proving AI investments pay off. Microsoft crashed 10% despite beating estimates as Azure growth disappointed. Apple posted record revenue but fell 1.9% in a classic "sell the news" move. Gold hit a record above $5,600 before crashing 9% on profit-taking. UnitedHealth collapsed after guiding for its first revenue decline in over 30 years. Trump nominated Kevin Warsh as the next Fed chair on January 30.

Economic & Market Overview

The S&P 500 hit a psychological milestone on January 28, briefly crossing 7,000 points for the first time in history. The index reached an all-time intraday high of 7,002.28 before pulling back after the Fed announcement. The Dow Jones Industrial Average closed at 49,015.60, while the Nasdaq Composite settled at 23,857.45. By Thursday January 29, the S&P 500 closed at 6,969.01, down 0.13%.

The Federal Reserve voted to hold rates steady at 3.5%-3.75% on January 28, pausing after three consecutive quarter-point cuts in late 2025. Two dissents came from Governors Stephen Miran and Christopher Waller, both Trump appointees who preferred another 25 basis point cut. Chair Jerome Powell said the economy is on "firm footing" and described current rates as "loosely neutral." He noted policy is "not on a preset course" and decisions will be made meeting by meeting.

Markets are now pricing at most two rate cuts in 2026. The 10-year Treasury yield traded at 4.26% following the decision. The U.S. dollar index hit four-year lows during the week after President Trump signaled tolerance for a weaker currency.

Gold experienced extreme volatility. Prices surged from roughly $5,268 per ounce on January 28 to a record above $5,500 on January 29, driven by dollar weakness and geopolitical tensions with Iran. Then on January 30, gold crashed over 9% on massive profit-taking. Silver plunged 28%—its worst day on record for the iShares Silver Trust (SLV). Despite the selloff, gold remains on track for a monthly gain of over 15%—the strongest performance since the 1980s.

On January 30, President Trump nominated Kevin Warsh as the next Federal Reserve chair. Warsh served on the Fed's Board of Governors from 2006 to 2011. Markets reacted cautiously. Schwab's chief fixed income strategist Kathy Jones noted: "Warsh was a hawk in his previous time at the Fed. The question is, will he change his views to please the president?"

Geopolitical risks escalated after Trump warned that an "armada" was heading toward Iran and urged Tehran to "make a deal" on its nuclear program or face military action.

Tech and Growth

Meta: The Week's Clear Winner

Meta delivered the standout earnings report of the week on January 28. Revenue hit $59.89 billion, up 24% year-over-year and beating the $58.4 billion estimate. Earnings per share of $8.88 exceeded the $8.16 consensus by 8.8%.

The stock surged 10% after hours and maintained those gains. The key catalyst was guidance: Q1 2026 revenue is projected at $53.5-56.5 billion, well above the $51.4 billion analyst consensus. CEO Mark Zuckerberg said the company ended 2025 with more than 3.5 billion people using at least one of its apps daily, including over 2 billion daily actives each on Facebook and WhatsApp.

Meta announced 2026 capital expenditures of $115-135 billion, up from $72.22 billion in 2025. Unlike Microsoft, investors rewarded Meta's spending because AI tools are directly boosting advertising revenue. Bank of America raised its price target to $885 from $810.

Microsoft: Beaten on Earnings, Punished on Azure

Microsoft reported on January 28 and beat estimates: revenue of $81.27 billion (vs. $80.27 billion expected) and EPS of $4.14 (vs. $3.97 expected). Yet the stock fell roughly 10%—its worst day since March 2020, erasing over $350 billion in market cap.

The problem was Azure. Cloud growth of 39% declined from 40% in the prior quarter. Capital expenditures of $37.5 billion came in well above the $34.31 billion expected, rising 66% year-over-year. CFO Amy Hood noted demand "continues to outpace supply" and that Azure would have grown 40% with more GPU capacity.

Microsoft now has 15 million paid seats for Microsoft 365 Copilot, its first disclosure of this metric. Gaming revenue declined 9.5%. The contrast with Meta was stark: both beat estimates, but Meta proved AI is lifting the bottom line today while Microsoft is still investing for future returns.

Apple: Record Quarter, "Sell the News" Reaction

Apple reported its best quarter ever on January 29 after the close. Revenue hit $143.76 billion, up 16% year-over-year and beating the $138.48 billion estimate. EPS of $2.84 exceeded the $2.67 consensus. iPhone revenue reached an all-time high of $85.27 billion, up 23% and crushing the $78.65 billion estimate.

Greater China sales surged 38% to $25.53 billion. CEO Tim Cook said Apple set an all-time record for upgraders in mainland China with double-digit growth in switchers from other brands. Services revenue hit a record $30.01 billion, up 14%.

Despite these numbers, the stock fell 1.3%-1.9% on January 30 after an initial 6% after-hours pop. The culprit: Cook warned of "supply chase" mode due to manufacturing constraints and noted memory chip prices rising 20-30% from AI data center demand. After a 33% run-up in the second half of 2025, Apple needed perfection—and even perfection wasn't enough.

Tesla: Beats Estimates, Discontinues Model S/X

Tesla reported Q4 results on January 28 with EPS of $0.50, beating the $0.40 estimate. The stock gained about 1% in after-hours trading.

Key announcements included: Tesla is investing roughly $2 billion in xAI, Elon Musk's AI startup. Model S and Model X programs will be discontinued. The company now has 1.1 million active Full Self Driving subscriptions. Capital expenditures will reach at least $20 billion in 2026, nearly double Wall Street estimates. Musk said Tesla needs to build its own semiconductor factory.

NVIDIA & Semiconductors

NVIDIA shares rose 2.9% for the week as of January 28. China authorized imports of the first batch of H200 AI chips, and NVIDIA announced a $2 billion investment in cloud provider CoreWeave. Wall Street analysts maintain a "Strong Buy" consensus with a mean price target of $255.

Seagate Technology jumped 19% on January 28 after Q2 earnings beat expectations. CEO Dave Mosley cited strong demand for AI data storage. ASML reported record orders and issued strong 2026 guidance due to the AI boom, announcing a 12 billion euro share buyback program.

SanDisk popped 10% on January 30 after sharing solid guidance, projecting fiscal third-quarter adjusted earnings of $12-14 per share versus the $5.11 FactSet consensus.

Software Sector Selloff

ServiceNow shares dropped roughly 10% as concerns grew that AI is eating into the broader software sector's business model. CEO Bill McDermott defended the company's strategy during the earnings call, but investors remained skeptical about the traditional software licensing model in an AI world.

Banks and Financials

Payment Processors: Resilience Amid Fee Cap Fears

President Trump's proposed 10% cap on credit card interest rates continued weighing on financial stocks. JPMorgan fell 4.2%, American Express dropped 5.1%, and Capital One declined 6.2% following the January 9 announcement.

Payment processors showed more resilience. Mastercard delivered strong Q4 results on January 29: revenue of $8.81 billion (+17.6% YoY) and EPS of $4.76 versus $4.20 expected—a 13% beat. Shares rose nearly 3%. The company announced a 4% workforce reduction while guiding for revenue growth at the "high end of low double-digits." Cross-border volume surged in double digits.

Visa reported Q1 fiscal 2026 revenue of $10.9 billion (+15% YoY), processing nearly $4 trillion in payments volume. Shares slipped after hours despite the beat as the credit cap overhang weighed on sentiment.

Berkshire Hathaway

Berkshire Hathaway traded around $473, consolidating after Warren Buffett's retirement as CEO on December 31, 2025. Greg Abel now leads the company. Berkshire sits on a record $381.7 billion in cash.

Consumer Goods and Healthcare

UnitedHealth: Worst Week in Decades

UnitedHealth Group reported on January 27 and shocked the market. Q4 EPS of $2.11 met estimates, but 2026 guidance delivered the blow: revenue is expected to exceed $439 billion, a 2% decline year-over-year. This marks the first annual revenue decline in more than three decades.

CFO Wayne DeVeydt pointed to three factors: divestitures including UK and South American operations, a "fairly sizable" membership decline of more than 3 million in 2026, and a $6 billion hit from Medicare's new V28 coding system. The medical care ratio rose to 88.9%, up 340 basis points year-over-year.

The stock plummeted roughly 20% for the week. Making matters worse, CMS proposed nearly flat 0.09% Medicare Advantage rate increases for 2027—far below the 4-6% analysts expected. Humana fell 21% and CVS dropped 14% on the same news.

Johnson & Johnson: A Bright Spot

Johnson & Johnson hit a 52-week high during the week. Q4 revenue of $24.6 billion rose 9.1% year-over-year. The company guided 2026 revenue of $99.5-100.5 billion versus the $98.9 billion Street estimate. Morgan Stanley upgraded the stock to Overweight.

Starbucks: Turnaround Signs

Starbucks reported mixed results on January 28. While earnings missed estimates, traffic grew for the first time in two years. CEO Brian Niccol said the "Back to Starbucks" strategy is working and "ahead of schedule." Same-store sales grew 4% in the U.S. and 5% internationally. Shares rose 7% on the turnaround optimism. The company projected fiscal 2026 adjusted EPS of $2.15-$2.40, below the $2.35 consensus but investors focused on the improving fundamentals.

Energy and Industrials

Exxon Mobil: New Highs

Exxon Mobil hit a new 52-week high of $142.34 on January 29 as oil prices surged on Iran tensions and dollar weakness. Q4 adjusted EPS of $1.71 beat the $1.68 estimate. Revenue of $82.31 billion exceeded the $81.43 billion consensus. Production reached 4.7 million barrels of oil equivalent per day—the highest in over 40 years.

Shares slipped 2% in premarket trading on January 30 despite the beat.

Chevron

Chevron posted fourth-quarter earnings that topped expectations thanks to record oil production. Adjusted earnings of $1.52 per share beat the $1.45 LSEG consensus. Shares rose more than 1%.

Travel & Leisure

Royal Caribbean jumped 18% on January 29 after guidance beat expectations. The cruise operator expects Q1 adjusted earnings of $3.18-$3.28 per share, topping the $2.91 analyst estimate. Carnival rose 9% and Norwegian Cruise Line added nearly 10% in sympathy.

Southwest Airlines surged 19% on January 29 after forecasting solid 2026 profits that topped analyst expectations.

Key Earnings Summary

Week Ahead

Earnings season continues with Alphabet (February 4), Amazon (February 5), and Eli Lilly (February 4) still to report. The market's message this week was clear: beating estimates is no longer enough. Investors now demand proof that AI spending translates to bottom-line results—immediately.

The Fed's pause leaves markets in wait-and-see mode. Gold's violent reversal and the healthcare sector's collapse suggest positioning remains fragile despite the S&P 500 milestone. The next FOMC meeting is scheduled for March 17-18.

President Trump's nomination of Kevin Warsh as Fed chair adds uncertainty. Senate confirmation hearings will be closely watched for signals about monetary policy direction under new leadership.

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Baked with love,

Anna Eisenberg ❤️