Strategist sees S&P 500 hitting 7,300 (but also a market pullback); Intel stock pops on new AI chip

Key Concepts

• Market Correction/Drawdown: A temporary decline in the stock market, typically 10-20%, after a period of gains.
• Basis Points: A unit of measurement used in finance to describe the percentage change in an interest rate or yield (1 basis point = 0.01%).
• Intraday Price Action: The movement of a stock's price during a single trading day.
• Secular Uptrend: A long-term, sustained increase in the price of an asset.
• AI (Artificial Intelligence): The simulation of human intelligence processes by computer systems.
• XLV & XLU: Ticker symbols for Healthcare Select Sector SPDR Fund and Utilities Select Sector SPDR Fund respectively, used to represent sector performance.
• 18A & 18P: Intel's latest manufacturing processes for its chips.
• IQ10: Qualcomm's new robotics platform.
• Digital Chassis: The suite of technologies powering the connected and intelligent features of modern vehicles.

Market Overview & Sector Performance (January 26, 2026)

The market closed mixed on January 26, 2026, with the S&P 500 pulling back from recent record highs. The Dow Jones Industrial Average fell 439 points, or just under 1%, while the NASDAQ Composite showed strength, spending most of the day in positive territory. The Russell 2000 (small-cap index) was down 3/10 of 1%.

Key Indices:

• Dow Jones Industrial Average: Down 439 points (-0.98%)
• NASDAQ Composite: Slightly positive, off its daily highs.
• S&P 500: Down approximately 0.25%.
• Russell 2000: Down 0.3%.

Bond Market: The 10-year Treasury yield decreased by four basis points to 4.14%, the largest move in weeks. The 30-year yield fell five basis points to 4.82%. The US Dollar Index saw a slight increase.

Sector Performance: Healthcare (XLV) and Consumer Discretionary were the only sectors in positive territory, with Healthcare up 0.8% and reaching its first intraday record high of the year. Utilities (XLU) were the worst performers, down 2.7%, followed by Industrials, Materials, Financials, Energy, and Real Estate, all down 1% or more.

Tech Sector Analysis

While the overall market was mixed, the tech sector showed a divergence. Mega-cap tech stocks within the NASDAQ 100 generally performed well, reversing a three-day trend.

• Alphabet: Up over 2%.
• Microsoft: Up over 1%.
• Tesla: In the green.
• Meta: Down 1.8%.
• Apple: Down 0.5%.

Semiconductors: The semiconductor sector was mixed, with Intel up 5%, but most other stocks were down.

Software: The software sector was particularly strong, with:

• Palo Alto Networks (PANW): Up almost 5%.
• CrowdStrike: Up over 5%.
• Datadog: Up over 3%.
• Zscaler: Up over 3%.

Transportation & Industrials

Both the Dow Jones Transportation Average and the Dow Jones Industrial Average had recently hit record highs, but experienced a reversal.

• Caterpillar: Down 4%.
• Goldman Sachs: Down 2%.
• Chevron: Down 1%.
• Uber: Up.
• UPS: Slightly up.
• Southwest Airlines: Up.

2026 Market Outlook – Fundstrat’s Mark Newton

Mark Newton, Managing Director and Global Head of Technical Strategy at Fundstrat Global Advisors, anticipates a choppy market in 2026 with a potential 15-20% drawdown before finishing the year higher. He maintains a year-end S&P 500 target of 7,300.

Key Signals for a Potential Drawdown:

• Consolidation in Technology: Newton believes a pullback in technology stocks, particularly those that have been overbought, could trigger broader market consolidation. He specifically mentioned Nvidia (sideways movement since July) and Microsoft (under pressure for six months) as stocks to watch.
• Weakening Sentiment: A rise in investor sentiment to “frothy” levels would be a warning sign.

Positive Signals:

• Broadening Market Breadth: Recent improvements in market breadth, with more sectors participating in the rally (Industrials, Financials, Discretionary), are encouraging.
• Strong Economic Data: Positive labor market data (rising quits rate, falling layoff rates) and strong earnings support a bullish near-term outlook.
• Breakouts in Key Indices: Breakouts in the Dow Jones Transportation Average, Dow Jones Industrial Average, and S&P Midcaps are positive indicators.

Newton’s Quote: “I think it's important to differentiate between the short-term prognosis and really what I see for the course of the year… I am positive for this year. I have an S&P target of 7,300, but I do expect it's going to be a year of consolidation and choppiness.”

Stock Specifics:

• Apple & Tesla: Both have been weakening despite the S&P 500’s gains, but Newton likes owning both.
• Commodities: Constructive on oil and gold, but expects near-term pullbacks. He anticipates oil outperforming this year due to supply imbalances and increasing demand. He predicts gold reaching $5,000 and silver reaching $90, but notes they are overextended.

Intel’s AI Developments at CES

Intel shares jumped 6% after unveiling its Core Ultra Series 3 chips at CES. These chips are the first manufactured using Intel’s 18A process, representing a significant technological achievement.

Key Points:

• 18A Process: The successful implementation of the 18A process is crucial, as it demonstrates Intel’s ability to deliver on its manufacturing roadmap.
• Panther Lake Chips: The chips are now in production and available for order.
• Importance of Manufacturing: Newton highlighted the importance of Intel regaining its edge in manufacturing to compete with AMD and ARM.

Qualcomm’s Expansion Beyond Smartphones

Qualcomm announced advancements in robotics and automotive technology at CES. The company is diversifying beyond its core smartphone business.

Key Announcements:

• Robotics Platform (IQ10): Qualcomm unveiled its IQ10 platform, combining AI processing and motion control for robots. This platform allows robots to perceive, reason, and act in a coordinated manner.
• Hyundai Partnership: Qualcomm is expanding its partnership with Hyundai to further develop automotive technologies.
• Digital Chassis: Qualcomm’s “digital chassis” is gaining traction in the automotive industry, providing connectivity, cockpit features, and autonomous driving capabilities.

Qualcomm CFO Akash Hollywalka’s Quote: “We're incredibly excited… this has been one of the most interesting CESS for us and we're very excited about the announcement we've done on robotics.”

Trending Tickers

• Cal-Maine Foods: Down 1.5% due to a revenue miss in its second-quarter report, driven by falling egg prices.
• GameStop: CEO Ryan Cohen granted a performance-based stock option award tied to achieving a $100 billion market cap and $10 billion in cumulative EBITDA.
• Crocs: Downgraded to Neutral by Bayard, citing recent stock outperformance and concerns about the 2026 outlook.

Conclusion

The market is currently navigating a period of mixed signals. While economic data remains relatively strong and certain sectors show promise, the potential for a mid-year correction remains a key concern. Technological advancements, particularly in AI and manufacturing (Intel, Qualcomm), are driving innovation and shaping the future of several industries. Investors should remain vigilant, monitor key indicators, and be prepared for potential volatility in the coming months.