Wall Street Brief (January 27): Major US stock indexes closed higher, small-cap stocks fell against the trend, market sentiment cautiously optimistic; Apple's rise drove a recovery in large-cap tech stocks, gold broke through $5,100

[Summary] US stocks closed slightly higher on Monday, with the Dow Jones Industrial Average up 0.64%, slightly leading the pack, the S&P 500 Index up 0.50%, the Nasdaq Composite Index up 0.43%, and the Russell 2000 Small-Cap Index down 0.36% against the trend. Overall market sentiment remained stable, leaning slightly towards cautious optimism. Apple surged nearly 3%, as investment banks were bullish about the prospects of iPhone 17 ahead of earnings reports, driving a recovery in sentiment for large-cap technology stocks; Tesla weakened due to news related to FSD price hikes, weighing on the performance of the discretionary consumption sector. In terms of major asset classes, gold broke through $5,100 during trading and hit a new all-time high. Risk aversion sentiment rose amid Trump’s threat to impose a 100% tariff on Canada and concerns over the Federal Reserve's independence; Bitcoin rose 1.93%, the US Dollar Index fell 0.45%, and crude oil edged down 0.43%.

I. Major Events

1. Ahead of the Fed's FOMC meeting, Powell faces multiple pressures

The Federal Reserve’s January 27-28 meeting is expected to keep rates unchanged at 3.50%-3.75%, but market focus before the meeting has gone beyond interest rates themselves. Powell’s term will expire on May 15, and speculation over his successor continues to grow – candidates include NEC Director Hassett (with odds at 43%), Fed Governor Waller, and former Governor Warsh. Meanwhile, the renovation project of the Federal Reserve headquarters has also come under intense scrutiny: the Department of Justice issued a grand jury subpoena regarding the matter, and Republican Senator Tillis announced he would block all Federal Reserve nominations. Amid these intertwined factors, markets are looking forward to Powell's press conference on Wednesday, expecting clearer guidance on the issue of 'independence'.

2. Trump threatens to impose 100% tariffs on Canada

Trump criticized Canada for reaching an EV tariff agreement with China, providing a 'backdoor' entry for Chinese goods, and threatened to impose 100% tariffs on all Canadian products. The agreement involves Canada lowering tariffs on 49,000 Chinese electric vehicles in exchange for China easing restrictions on canola and lobster imports. Canadian Prime Minister Carney urgently clarified that there was no intention to sign a free trade agreement with China. Prior to this, Trump had raised South Korean tariffs from 15% to 25%. As tariff issues repeatedly heat up, market concerns about escalating trade frictions have further deepened.

3. Gold breaks through $5,100 to hit a record high

Gold prices hit a record high of $5,110.50 per ounce on Monday. Following a cumulative increase of 64% in 2025, gold’s momentum has carried over into the start of this year, with a rise of approximately 17% so far in 2026. The main driver behind gold's rally remains risk-averse funds repricing uncertainty: On one hand, Trump sent stronger tariff signals, prompting markets to reassess the global trade environment; on the other hand, controversies surrounding the Federal Reserve's independence have also heightened policy uncertainty. Additionally, central banks' continued gold purchases provide firmer medium- to long-term support for gold. Goldman Sachs previously raised its year-end target to $5,400.

II. Major Trends

1. Value style continues to outperform

Over a three-month horizon, the value stock ETF (SPYV) rose by 3.06%, while the growth stock ETF (SPYG) fell by 0.30%, creating a gap of more than three percentage points. Industrial stocks (DIA) rose 4.22% during the same period, significantly outperforming tech stocks (QQQ), which dropped 0.44%. High-valuation growth stocks are still under pressure, and capital is more inclined to shift toward lower-valuation, more defensive options.

2. Small-cap stocks extend their medium- to long-term strength

Although the Russell 2000 fell 0.36% on the day, showing the weakest performance, over three months IWM gained 6.17%, significantly outpacing the S&P 500's 1.23%. Market breadth indicators are also improving — the equal-weight SPY (RSP) rose 3.67% over three months, outperforming the market-cap-weighted SPY, indicating that the rally isn't solely driven by a few large-cap companies.

3. Short-term adjustment in tech giants

The MAGS ETF fell 4.13% over two weeks, but disparities within M7 are widening — Apple rose 2.97%, Meta increased by 2.06%, while Tesla dropped 3.09%. As earnings season approaches, expectation gaps are becoming the core source of individual stock volatility.

III. Market Sentiment

Market sentiment overall remains stable, leaning slightly towards cautious optimism. The VIX fear index closed at 16.15, up 0.37%, still at a relatively low level. Despite rising concerns about trade wars and the Federal Reserve's independence, volatility hasn’t significantly increased, suggesting short-term funds haven’t shifted into 'defensive mode.' The CNN Fear & Greed Index edged up from 54 to 55, staying in the 'neutral' zone but slightly skewed towards greed. Compared to last week’s unease following small-cap pullbacks, market risk appetite has somewhat recovered.

In terms of market breadth, the equal-weight RSP index outperformed the market-cap-weighted SPY over three months (3.67% vs. 1.23%), reflecting a relatively healthy upward structure. Regarding fund flows, Bitcoin ETFs (BlackRock/Fidelity) saw inflows of $11 billion last week, and MicroStrategy purchased an additional 13,627 BTC, indicating alternative assets continue to attract allocation demand.

IV. Market Scan

1. Index ETFs

The Dow ETF (DIA) led with a 0.64% gain, boosted by heavyweight stocks like Apple; the Russell 2000 ETF (IWM) lagged with a 0.31% decline as small-cap stocks continued to consolidate after last week's sharp drop. Large-cap stocks showed more signs of recovery, with the Dow outperforming both the Nasdaq and Russell on the day.

However, from a three-month perspective, there has been no fundamental reversal in style rotation — IWM is up 6.17%, while SPY has risen only 1.23%, indicating that small caps still hold a relative performance edge.

2. Industry Sectors

Utilities (XLU) led with a 0.73% gain as defensive sectors benefited from rising risk aversion and expectations of stable interest rates. Consumer Discretionary (XLY) lagged with a 0.66% decline, pressured mainly by Tesla: as the largest component of XLY, its 3.09% drop directly weighed on the sector.

Overall, sector divergence was not severe, with most sectors' gains or losses remaining within a 1% range.

3. Seven Major Tech Stocks

Apple led M7 with a 2.97% rise. JPMorgan raised its price target to $315, optimistic about iPhone 17 sales; Morgan Stanley forecast Q1 revenue of $139.5 billion, surpassing guidance. Reports also surfaced that Apple struck a multi-year partnership with Alphabet to power Siri using Gemini.

Meta rose 2.06%, driven by the global expansion of Threads ads and AI-powered advertising tools generating over $60 billion in annualized revenue. Tesla fell 3.09%, pressured by Musk’s announcement of an FSD price hike and the elimination of the one-time purchase option starting February 14; meanwhile, the market digested concerns over a projected 9% decline in 2025 deliveries, potentially allowing BYD to overtake it.

4. Chinese概念股

Chinese ADRs remained under pressure. Baidu led declines with a 3.32% drop as profit-taking followed a surge driven by the release of Ernie 5.0, compounded by weak A-share performance (Shanghai Composite -0.09%, Shenzhen Composite -0.85%). Futu held up relatively well with a 0.84% gain, benefiting from increased trading activity spurred by Bitcoin's rise.

Tariff threats further amplified market speculation around trade frictions, making it harder for Chinese ADR risk appetite to recover quickly.

5. Cryptocurrencies and related stocks

Bitcoin rose 1.93%, continuing its mild uptrend fueled by institutional buying. Institutional moves persist — MicroStrategy added 13,627 BTC earlier this month, while BlackRock/Fidelity ETFs saw inflows of $1.1 billion last week. The key resistance level stands at $99,000 (short-term holder cost basis).

Mining stock Riot Platforms (RIOT) plummeted 6.08%. Following a recent rally driven by AMD data center partnership news, the stock saw significant profit-taking, exacerbated by growing concerns over high operational leverage among mining companies, amplifying the pullback.

$NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $Bitcoin (BTC.CC)$ $BTC/USD (BTCUSD.CC)$ $Ethereum (ETH.CC)$ $ETH/USD (ETHUSD.CC)$ $iShares Ethereum Trust ETF (ETHA.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

426K Views