S&P 500 Inches Toward 7,000 as AI Winners Counter Intel Rout; Fed Steadies 2026 Outlook

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January 25, 2026 | 11:30 AM ET

If you wanted a snapshot of today’s market mood, picture two very different forces pulling on opposite ends of the rope. On one side: investors piling into AI and mega-cap tech. On the other: a bruising post-earnings collapse from Intel. By the closing bell, the tech side won barely.

A Quick Read on the Day

  • Tech vs. Chips: Strength in AI-linked giants lifted the Nasdaq, while Intel’s rough earnings report weighed on the Dow.
  • Fed Pause Mode: Jay Powell signaled the central bank is comfortable staying put for now, keeping rates at 3.5%–3.75%.
  • Inflation Still Sticky: December CPI sat at 2.7%, enough to keep the Fed cautious about cutting again too quickly.
  • Safe Havens Shine: Gold pushed past $4,600/oz as investors hedged against geopolitical and tariff uncertainty.

Equities: AI Keeps the Party Going Intel Doesn’t

Stocks chopped around for most of the session, but the narrative hasn’t changed much from the past few months: the “AI trade” continues to be the pillar keeping the market glued together.

The S&P 500 gained just 0.03% to end the week at 6,915.61, practically staring down the psychological 7,000 mark.

Who Carried the Market:

  • Microsoft (MSFT) +3.45%
  • Nvidia (NVDA) +1.60%
  • Meta (META) +1.72%
  • Fortinet (FTNT) gained over 5% after upbeat cybersecurity commentary.

Who Didn’t:

  • Intel (INTC) plunged 17.15%, largely due to a weak Q1 outlook tied to inventory tightness and supply constraints.

Tech and Communications outperformed, while Industrials and Semiconductors lagged.

Federal Reserve: The Bar Just Got Higher

The Fed has cut rates three meetings in a row, but don’t expect a fourth on January 29.

Powell described the current policy stance as “neutral,” and the latest economic projections point to just one more cut for all of 2026. Translation: the Fed doesn’t feel rushed anymore.

The 10-year Treasury yield sat around 4.10%, reflecting doubt that the Fed will achieve its 3% terminal rate target this year.

Economic Data: Not Too Hot, Not Too Cold (But Still Warm)

The macro picture remains the classic “soft landing” just slightly hotter than the Fed prefers.

  • Inflation: December CPI at 2.7% reinforces that goods inflation cooled, while services remain sticky.
  • Growth: The Atlanta Fed’s GDPNow model estimated Q4 2025 GDP at 5.4%, powered by domestic investment.

Currencies: Dollar Takes a Breather

After shedding roughly 10% from last year’s highs, the U.S. Dollar Index (DXY) hovered near 98.20, stabilizing as traders reassessed outflow narratives.

  • EUR/USD traded around 1.18
  • USD/JPY held near 152, sensitive to Bank of Japan commentary

Commodities: The Hard-Asset Boom

Commodities are suddenly the new comfort blanket in early 2026.

  • Gold surged past $4,600/oz, helped by tensions involving Venezuela and Iran.
  • Silver gained more than 16%, trading above $84/oz.
  • Oil (Brent & WTI) saw a ~7% spike recently, aided by geopolitical risk and short-covering.

Crypto: Bitcoin Cools, Ethereum Holds Its Ground

Crypto markets remain decoupled:

  • Bitcoin (BTC) traded near $89,195, down roughly 30% from October highs.
  • Ethereum (ETH) hovered near $3,000, with BlackRock reiterating its bullish stance on real-world asset tokenization.

What Investors Should Watch

Catalysts Ahead:

  • Earnings: Apple, Microsoft, and Amazon report this week.
  • FOMC Meeting: January 29 is expected to deliver a “hold,” with Powell’s tone doing most of the work.

Risks on the Radar:

  • Tariffs: Legal rulings on reciprocal tariffs could shake the U.S. Dollar.
  • Fed Leadership: Powell’s chair term expires May 2026, and succession speculation could affect rate expectations.

Quick Macro Glossary

  • Fed Funds Rate: The overnight lending rate between banks; the Fed uses it to cool or stimulate the economy.
  • CPI: Consumer Price Index, the most widely watched U.S. inflation measurement.
  • Neutral Rate: The interest rate level that neither restricts nor accelerates economic growth.

Sources (Institutional & Data Providers)

The following institutions are commonly used for U.S. market, macroeconomic, and policy verification:

  • Federal Reserve Board — Monetary policy statements, rate decisions, projections
  • Federal Open Market Committee (FOMC) — Meeting minutes & policy outlook
  • Bureau of Labor Statistics (BLS) — CPI, PPI, unemployment data
  • Bureau of Economic Analysis (BEA) — GDP growth data & national accounts
  • U.S. Treasury Department — Yield curve & bond market data
  • Atlanta Fed GDPNow — Real-time GDP forecasting model
  • CME FedWatch Tool — Market-implied rate expectations
  • Public U.S. Company Filings (SEC) — Earnings results & forward guidance
  • CryptoQuant / Glassnode — On-chain crypto metrics
  • Market Data Providers: Bloomberg, Reuters, Trading Economics, FactSet for price movements

(Note: This article contains forward-looking statements and hypothetical 2026 data for narrative use.)

Financial Disclaimer

This content is provided solely for informational and educational purposes and should not be interpreted as financial, investment, tax, or legal advice. Market commentary reflects opinions at the time of writing and may not be updated. All investments involve risk, including possible loss of principal. Past performance does not guarantee future results. Readers should conduct their own research or consult a licensed financial professional before making investment decisions.