Luke Kawa1/16/25

Most US stocks rise, but megacap tech drags major indexes down

The S&P 500 inched lower on Thursday, the Nasdaq 100 had an ugly close to end down 0.7% at its low of the day, and the Russell 2000 eked out a small advance.

Today was the first time the S&P 500’s advance-decline line was above 250, but the benchmark index suffered a drop of 0.2% since July 11, which marked the start of a meaningful drawdown for megacap tech stocks.

Most S&P 500 sectors moved higher, but tech, communication services, and consumer discretionary — the sectors home to the Magnificent 7 cohort — all retreated. Every member of that group fell.

Apple had an awful day amid reports that it’s losing market share in China, its worst underperformance of the broad market since March. Tesla also stumbled, giving back a chunk of yesterday’s big gains.

UnitedHealth was the worst performer in the S&P 500 after posting disappointing earnings that saw net income drop significantly year on year.

Southwest Airlines slumped on the heels of a lawsuit from the Department of Transportation alleging that it “chronically delayed” flights.

On the bright side, TSMC jumped after posting robust earnings and a bright outlook for the year ahead.

Rivian jumped following a report that the electric-vehicle maker is set to receive billions in financing from the Biden administration. Uber also had a strong showing following some positive commentary from Wall Street analysts.

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Max Knoblauch5h

American Eagle posts stronger-than-expected Q4 earnings and revenue

If American Eagle has seen farther, it is by standing on the shoulders of Sydney Sweeney.

The jeans seller posted adjusted earnings of $0.84 per share, ahead of the $0.71 expected by analysts polled by FactSet. It booked $1.76 billion in fourth-quarter revenue, versus the $1.74 billion consensus.

Shares initially climbed more than 5% after-hours before paring gains to about 2%.

“Compelling new product collections, supported by fresh marketing campaigns, led to higher demand trends in the quarter,” said CEO Jay Schottenstein.

American Eagle said it’s expecting same-store sales to grow by high single digits in the first quarter.

Marketing controversy has proved to be a powerful mover of denim for AE. In its third-quarter earnings call in December, AE said its partnership with Sydney Sweeney — together with a Travis Kelce partnership — had garnered more than 44 billion impressions. The retailer hit meme stock status last July when it initially launched its “Sydney Sweeney has great jeans” campaign.

As of Wednesday’s close, American Eagle shares had climbed 120% since the Sweeney ad first landed.

Broadcom posts modest Q1 sales and earnings beats

The custom chip specialist just reported Q1 results.

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Rigetti Computing posts Q4 sales that fall short of expectations

The quantum computing firm just posted Q4 results.

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Tasha Matsumoto

Stocks rebound as investors’ risk appetite resumes

Investors shifted their focus from the war in Iran, resuming a risk-on mood amid surprise economic data.

Josh Giddey #3 of the Chicago Bulls grabs a rebound during the second half against the Detroit Pistons on October 22, 2025 at the United Center in Chicago, Illinois.

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Investors are itching to buy the dip in memory stocks

The intense drubbing in South Korean stocks, with the benchmark Korean index (KOSPI) falling nearly 20% in its first two trading days of the week following a Monday holiday, represented a serious threat to the hottest AI trade: memory stocks.

South Korea’s market is dominated by two high-bandwidth memory giants: SK Hynix and Samsung.

After Tuesday’s tumble, US investors seemingly said enough is enough: it’s a buy-the-dip opportunity.

US memory stocks like Micron, Sandisk, Western Digital, and Seagate Technology Holdings are posting massive gains on the day. The advance comes amid positive commentary at a Morgan Stanley conference on demand for memory chips.

Even more interestingly, the iShares MSCI South Korea ETF is up big today despite the KOSPI falling 12% overnight, its largest drop on record. The ETF’s outperformance of the South Korean equity gauge is the largest since 2008, as the global financial crisis raged.

The daily performance of these two can differ materially since they trade at different times and don’t track precisely the same things. US investors are making the bet that a potential break in this momentum trade and the potential for an unwind of retail leverage in South Korean markets be damned, big drops in memory stocks are meant to be bought.

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