Market Recap - Tuesday, January 13, 2026
Stocks Slide as Earnings Season Kicks Off and Geopolitical Risks Resurface
Stocks slipped today, with the Dow down 0.80%, the S&P 500 falling 0.19%, and the Nasdaq dipping 0.10%. The Russell 2000 also edged lower by 0.10%. The market opened higher but faded throughout the day as investors digested the unofficial start of Q4 earnings season, renewed geopolitical tensions, and another rotation out of software and cloud stocks. Big banks and airlines weighed on the tape after disappointing earnings and guidance, while tech was mixed — semis and AI infrastructure names held up better, but software and cloud stocks saw heavier selling. Energy, homebuilders, metals, and machinery outperformed, along with select names in healthcare and retail.
Investors were processing a noisy but slightly cooler-than-expected CPI print. Core inflation rose just 0.2% month-over-month, below the 0.3% forecast, while headline CPI came in at 0.3% as expected. The report confirmed sticky shelter inflation and rising airfare and food prices, likely impacted by tariffs. Used car prices and appliances saw notable declines. Despite the slight improvement, traders largely shrugged off the report, with the market still not pricing in a rate cut until midyear. Meanwhile, a strong 30-year Treasury auction helped keep yields slightly lower on the day. In FX, the dollar gained and the yen slid after reports of a potential snap election in Japan. Oil jumped nearly 3% on rising Iran tensions, while Bitcoin rose over 3% to a two-month high.
Earnings were front and center, with JPMorgan shares down despite a beat on EPS, as investment banking fees missed expectations. Visa and Mastercard fell again, this time on pressure from Trump supporting legislation to cap swipe fees. Delta Airlines slumped on weaker 2026 guidance. On the bright side, Intel, AMD, and Reddit all rose following bullish analyst upgrades, while Cardinal Health and Revvity gained on upbeat guidance. Travere Therapeutics was the day’s worst decliner after the FDA requested more info on one of its treatments. Headlines also pointed to Meta planning more layoffs in its Reality Labs unit and Netflix exploring an all-cash bid for Warner Bros. Discovery.
Here’s Our Take:
Today’s action reinforced the ongoing rotation under the surface of the market. Investors continue shifting from software-heavy tech to semiconductors and “AI enablers,” while also leaning into more cyclical and value-oriented sectors like energy, machinery, and industrials. Big tech is holding up okay, but the recent selling in cloud and software names suggests investor enthusiasm is cooling in parts of the AI trade. At the same time, cooler inflation data failed to lift sentiment, possibly because investors are now more focused on earnings quality and macro risks like geopolitics, tariffs, and Fed policy uncertainty.
While Q4 earnings are just getting started, today’s reports highlighted a key theme: expectations are high, and even decent results may not be enough. JPMorgan’s strong consumer commentary wasn’t enough to offset investment banking weakness, while Delta and other cyclicals are dealing with cost pressures and slowing guidance. As we head into more earnings later this week, we’re keeping a close eye on consumer strength, margin trends, and whether the semis/software divergence continues. With markets still hovering near highs, the bar for positive surprises is rising.
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