Honestly, if you looked at the S&P 500 yesterday and thought everything was fine because the index barely moved, you’re missing the actual story. The US stocks market today is undergoing a massive, somewhat violent internal restructuring that most casual investors aren't seeing. For years, we’ve been told that "Big Tech" is the only place to hide when the world gets weird. Well, that script just got flipped.
The "Magnificent Seven" aren't so magnificent right now. In fact, they’re basically acting as a literal anchor on the broader market. While the S&P 500 has managed a modest $1.4%$ gain so far in 2026, the tech giants are bleeding. Apple and Meta have both tanked about $6%$ just in the first few weeks of January. Microsoft isn't far behind, slumping nearly $5%$. It’s weird to see, right? The very companies that carried us through the AI gold rush of 2024 and 2025 are suddenly the ones everyone is selling to buy... toothpaste and cereal companies.
The Great Rotation: Out with the New, In with the Old
We are witnessing what analysts call a "broadening rally," which is just fancy talk for "people are finally buying things other than Nvidia."
Small-cap stocks, which have been the punching bag of Wall Street for ages, are finally having their moment. The Russell 2000 is outpacing the big guys, and defensive sectors like consumer staples are suddenly the "cool kids" on the trading floor. This past week, consumer staples rallied $3.7%$, making it the second-best performing sector. Why? Because when people get nervous about the Federal Reserve’s independence or the Justice Department launching probes into Fed Chairmen, they buy things people need, not just things people download.
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Take a look at the Invesco Equal Weight S&P 500 ETF (RSP). It’s up nearly $4%$ this year. Compare that to the tech-heavy Nasdaq, which is basically flat. This is a huge signal. It means the "average" stock is doing way better than the "famous" stocks. It’s a healthy sign for the long-term market, even if it feels gross to watch your Apple shares dwindle.
US Stocks Market Today: The Trump, Davos, and Fed Chaos
You can't talk about the markets right now without mentioning the political circus in D.C. and the upcoming World Economic Forum in Davos. President Trump is heading to Switzerland this week, and the market is already bracing for his speech on Wednesday. Rumors are flying about major housing reform and more talk about capping credit card interest rates at $10%$.
Financial stocks are already feeling the heat from that last one. If you saw JPMorgan (JPM) or Bank of America (BAC) sliding lately, that’s why. Investors hate uncertainty, and a government-mandated cap on interest rates is the definition of a wild card.
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Then there’s the Fed. The Justice Department just launched a criminal probe into Fed Chair Jerome Powell, which is... a lot. It has sent Treasury yields to a four-month high, with the 10-year Treasury sitting around $4.23%$. When yields go up, tech stocks usually go down because their "future" earnings become less valuable in today's dollars. It’s a classic math problem that’s currently wrecking Silicon Valley’s valuations.
Chips are still the exception (sorta)
Even with the tech slump, semiconductors are still the outliers. People are still obsessed with the AI data center build-out.
- Micron (MU) surged $8%$ recently after an insider bought $$8$ million worth of shares.
- Taiwan Semiconductor (TSM) is still upping its revenue forecasts.
- The iShares Semiconductor ETF (SOXX) is actually up over $13%$ this year.
But there’s a widening gap. Chip makers are making bank, while software companies like Palantir and Workday are getting hammered. Investors are starting to fear that while the AI "hardware" is a sure bet, the "software" might just get replaced by some AI-native startup that doesn't even exist yet.
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What to Watch This Week
Since tomorrow is Martin Luther King Jr. Day, the markets are closed, giving everyone a 24-hour breather. But Tuesday is going to be a sprint. We’ve got Netflix and Intel reporting earnings. These are "vibe-check" companies. If Netflix shows that consumers are cutting back on subscriptions, or if Intel’s guidance is weak, the rotation out of tech could accelerate into a full-on stampede.
Also, keep an eye on the delayed PCE inflation data. If inflation stays sticky around that $3%$ mark, don't expect the Fed to give us more than two or three rate cuts this year. The dream of "free money" returning is pretty much dead for 2026.
Actionable Steps for Your Portfolio
- Check your concentration. If $40%$ of your portfolio is in three tech stocks, you’re feeling a lot of pain right now that the rest of the market isn't. Look at equal-weight ETFs to balance things out.
- Watch the $10%$ cap news. If you hold regional banks or major credit card issuers, stay glued to the news out of Davos. Policy changes there will move these stocks more than earnings will.
- Don't ignore the "Boring" stuff. Consumer staples and utilities are acting like the new "safety" trade. It’s not flashy, but $5%$ gains in a month beats a $6%$ loss in Big Tech any day.
- Prepare for Volatility. We are in "Year 2" of the presidential cycle. Historically, this is the most volatile year for stocks. Expect more "check-backs" where the market drops $3-5%$ for no apparent reason other than it's Tuesday.
Keep your head on a swivel. The US stocks market today isn't broken, it’s just changing its mind about who the winners are.