Big Tech kept the broader market leaning bullish, but a Medicare-payment shockwave turned health insurers into a trapdoor.
With the Fed mid-meeting and Washington flirting (again) with tariffs and shutdown math, investors got a reminder that “record highs” and “risk-free” are not synonyms.
I’ve seen plenty of “mixed days” on Wall Street, but Tuesday’s tape had a particularly sharp personality: the market flirted with new highs… while health care got pushed down a flight of stairs.
Large-cap tech did what it’s done so often lately, kept the surface calm and the headline pretty. The S&P 500 finished up about 0.5% at 6,950.23, while the Dow lagged as health insurers cratered.
The Fed: The Meeting Everyone Pretends Isn’t a Catalyst
The Federal Reserve kicked off its two-day meeting, with markets broadly expecting rates to be left unchanged and the statement to offer only minor tweaks.
Meanwhile, the shape of rates keeps telling a story: the U.S. curve has been steepening, with longer-term yields pushing higher relative to the front end, partly reflecting expectations for lower policy rates later this year, and partly a growing term-premium demand tied to debt supply and trade-policy uncertainty.
Washington Risk: Tariffs, Trade, and the Return of Shutdown Roulette
On the geopolitical side, President Trump threatened to raise tariffs on South Korean imports to 25%, tying the move to unmet trade commitments, then quickly pivoted to “we’ll work something out,” which is diplomatic code for “everyone panic a little less.”
Canada also stayed in the crosshairs after Trump floated a 100% tariff threat in the context of Canada’s trade posture toward China.
And because 2026 apparently refuses to be boring, the U.S. is again staring at a funding deadline, one Reuters report even flagged operational risks in the judiciary if funding lapses persist.
The Consumer: Confidence Cracked
The most sobering macro datapoint: Conference Board consumer confidence slid hard in January to the lowest level since May 2014. Reuters put the index at 84.5 (a big miss versus expectations), with inflation, jobs, and tariff/political anxiety dominating the mood.
Housing, however, kept drifting higher: home prices in major U.S. cities rose again in November, per the Case-Shiller style data referenced in today’s coverage.
The Corporate Scorecard: Winners, Warnings, and One Brutal Sector Reset
Health Insurers: The Floor Opened Up
This was the day’s real drama. A proposal to keep 2027 Medicare Advantage payment growth roughly flat (far below what many expected) hit the group like a surprise margin call.
UnitedHealth (UNH | -19.61%) collapsed after the policy headline and a downbeat outlook narrative in the day’s flow.
Humana (HUM | -21.13%) joined the rout.
CVS Health (CVS | -14.15%) got dragged into the same gravity well.
The message from the market was blunt: if reimbursement visibility gets cloudy, the multiple gets repriced immediately, no committee meeting required.
Big Tech: The Market’s Favorite Life Jacket
While health care sank, megacap tech did what it does: buoyed the index and soaked up the incremental risk appetite ahead of a packed earnings calendar.
The session’s setup had Microsoft (MSFT | +2.19%), Amazon (AMZN | +2.63%), and Apple (AAPL | +1.12%) supporting the tape, with more heavyweight reports queued up next.
Looking ahead, Meta Platforms (META | +0.09%), Microsoft, and Tesla (TSLA | -0.99%) are on deck, with Apple expected shortly after.
Industrials & Transports: Real Earnings, Real Adjustments
Boeing (BA | -1.56%) reported a return to quarterly profit, but the fine print mattered: results included a sizable gain tied to closing its Digital Aviation Solutions transaction.
American Airlines (AAL | -7.00%) posted a much lower quarterly profit and still tried to sound constructive on 2026, investors weren’t in the mood to pay for optimism alone.
General Motors (GM | +8.75%) ripped higher despite ugly-looking headline losses, as the market looked through EV-related charges and focused on forward guidance and the company’s willingness to take the medicine.
And UPS (UPS | +0.22%) delivered the kind of “good earnings / tough strategy” combo I expect we’ll see more of in 2026: better-than-expected results alongside plans to cut up to 30,000 jobs as it continues shrinking low-margin Amazon volume.
Semis: A Small Miss, A Big Theme
Texas Instruments (TXN | +7.05% pre-market) printed slightly light results but emphasized data-center driven demand for analog chips and issued Q1 guidance that came in stronger than expected.
My Take: The Market’s Mood Is Strong, Its Patience Is Not
Tuesday was a classic lesson in modern index math: if Big Tech is green, the headline looks fine, even when an entire sector is having an existential day. But beneath the surface, investors are getting more selective, more policy-sensitive, and frankly quicker to punish uncertainty.
With the Fed decision looming, tariffs back in the conversation, and consumer confidence sliding, I’m treating “calm” as temporary, not structural.
Kristoff - ChartMill
