Wall Street Brief (January 29): The S&P 500 surpassed 7,000 points intraday for the first time, with semiconductor stocks rallying across the board; the Federal Reserve kept rates unchanged, and gold surged 4.57%, continuing to set new all-time highs

[Summary] U.S. equities closed mixed on Wednesday, with the S&P 500 Index briefly surpassing the 7,000-point mark before retreating to close down 0.01%. The Nasdaq Composite was boosted by strong earnings from chipmakers and edged up 0.17%, while the Dow Jones Industrial Average remained flat, rising just 0.02%. The Russell 2000 small-cap index fell 0.49%. As expected, the Federal Reserve maintained its benchmark rate, with Powell stating that the economic outlook has improved and tariff-driven inflation is likely to peak in the middle of the year. However, he did not provide clear signals about future rate cuts, causing the S&P to retreat after hitting 7,000 points. Chip stocks were the biggest highlight, with Intel leading semiconductor gains, surging 11%. In major asset classes, gold soared 4.57% to a new all-time high, crude oil climbed 1.49% to $63.5 amid tensions over Iran and winter storms, while Bitcoin remained volatile.

I. Major Events

1. The Federal Reserve kept interest rates unchanged, pausing the rate-cutting cycle.

The FOMC voted 10-2 to maintain the federal funds rate within the range of 3.5%-3.75%, concluding three consecutive rate cuts. Governors Miran and Waller dissented. During the press conference, Powell stated that the economic outlook has significantly improved, and inflation driven by tariffs is expected to peak by mid-year. However, he refrained from offering clearer guidance on subsequent rate cuts, which caused the S&P to quickly cool off after reaching 7,000 points. With only two meetings left in Powell’s term, the market expects no more than two rate cuts throughout the year.

2. Chip stocks performed strongly across the board, with Intel reportedly securing a manufacturing partnership with Apple.

Reports indicate that Apple plans to use Intel's 18A process technology to produce low-end Mac/iPad chips starting in 2027, causing Intel's stock price to soar by 11.04%. Meanwhile, Reuters reported that China has approved the sale of Nvidia's H200 chips, allowing ByteDance, Alibaba, and Tencent to purchase over 400,000 units. This news significantly warmed sentiment in the semiconductor sector, with related stocks generally strengthening. Seagate rose 19%, TI surged 9.9%, and Micron climbed 6.1%.

Trump warns Iran as crude oil hits a near four-month high

Trump warned Iran that 'a large fleet is on its way,' with the U.S. aircraft carrier strike group already arriving in the Middle East. There were also disruptions on the supply side: EIA data showed a decline of 2.3 million barrels in U.S. crude oil inventories, while winter storms reduced production by approximately 2 million barrels per day. Amid these compounding factors, WTI crude rose to $63.5, and Brent crude climbed to $68.40.

II. Major Trends

Small-cap stocks continue to outperform large-cap stocks

Over a three-month period, the Russell 2000 (IWM) gained 11.24%, significantly outperforming the S&P 500 (SPY) at 3.48%, with a two-week gain reaching 4.46%, accelerating the upward trend. Despite a 0.49% pullback in small-cap stocks on the day, the relative strength remained intact.

Value style continues to dominate

Over a three-month horizon, SPYV rose 4.99%, outpacing SPYG’s 2.23%, while industrial stocks (DIA) climbed 6.40% over the same period, surpassing tech stocks (QQQ) at 2.65%. Capital continued rotating from growth stocks into value stocks.

Tech giants face short-term pressure

The Mag 7 ETF (MAGS) fell 1.44% over two weeks, indicating leading tech stocks are still digesting earlier gains. However, positive earnings reports and favorable news in semiconductors temporarily supported sentiment in the tech sector.

III. Market Sentiment

Market sentiment remains in the greed zone, with investor confidence holding steady overall after the S&P touched 7000 points. The VIX fear index closed at 16.35, unchanged and at a relatively low level. Despite uncertainties from the Fed decision and Iran tensions, volatility did not rise significantly, showing that market pricing of short-term risks remains restrained. The CNN Fear & Greed Index stood at 63 (previous reading 65), slightly retreating but still within the 'greed' range. A pullback in the S&P brought some cooling, though overall sentiment remains optimistic.

The Put/Call ratio was around 0.56, a relatively low level, indicating continued strong interest in call options and no significant weakening in risk appetite. Market breadth remained healthy, with the equal-weighted S&P 500 (RSP) gaining 5.59% over three months, outperforming the market-cap weighted SPY at 3.48%, suggesting the rally was not solely driven by a few heavyweight stocks, with broader participation evident.

IV. Market Scan

1. Index ETFs

The Nasdaq ETF (QQQ) led gains with a 0.33% rise, primarily driven by strong performances in semiconductor stocks, including an 11% surge in Intel, a 19% jump in Seagate, and a 9.9% increase in TI. The Russell 2000 ETF (IWM) led declines with a 0.54% drop as funds flowed more into large-cap technology stocks. Over a three-month horizon, small-cap stocks remain dominant: IWM gained 11.24% over the past three months, far outpacing SPY's 3.48%.

2. Industry Sectors

The Technology Sector (XLK) led gains with a 0.80% increase. Improved sentiment in the sector was fueled by positive news on semiconductors and better-than-expected earnings reports: Intel surged 11% on rumors of foundry partnerships, Nvidia rose 1.59% following reports on H200 chip sales, while Seagate, TI, and Micron also showed strong performance.

Consumer Staples (XLP) led declines with a 1.01% drop as funds flowed back into technology amid waning interest in defensive sectors. Meanwhile, the weight of the technology sector reached a record high of 34.6%, further diminishing the presence of defensive sectors like consumer staples.

3. Seven Major Tech Stocks

Nvidia (NVDA) rose 1.59%. Market attention focused on developments related to H200 chip sales, with reports indicating that ByteDance, Alibaba, and Tencent were allowed to purchase over 400,000 AI processors, interpreted as a significant shift in China’s chip access policy. Netflix (NFLX) fell 1.10%. Amid cautious anticipation ahead of earnings season, rotation within tech stocks became more pronounced, with some funds shifting from 'content/streaming' plays toward semiconductors and hard tech themes.

4. Chinese概念股

Chinese stocks showed mixed performance. Bilibili (BILI) rose 3.58%, driven by market expectations of policy-driven consumption stimulus. Futu Holdings Ltd (FUTU) gained 3.24%, benefiting from improved market activity. PDD Holdings (PDD) fell 3.84% after reports indicated Chinese authorities expanded investigations into over 100 cases involving tax compliance and fraudulent delivery practices, reigniting regulatory uncertainty and weighing on the stock.

5. Cryptocurrencies and related stocks

Bitcoin hovered around $90,000, maintaining a volatile but mostly stable trend. Circle (CRCL) rose 4.12%, with stablecoin-related stocks gaining attention amid relatively calm conditions in the cryptocurrency market. Palantir (PLTR) dropped 5.04% as concerns about valuation and institutional selling intensified. With a forward P/E ratio of 167x, institutional holdings continued to decline, with JPMorgan cutting its position by 32% and T. Rowe Price reducing its stake by 24%. The stock has fallen over 20% from its November 2025 peak.

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

386K Views