NEW YORK, January 25, 2026, 12:07 ET — The market is now closed.
- Intel dropped roughly 17% on Friday, weighed down by supply issues and a weak earnings forecast.
- The S&P 500 closed Friday mostly flat, while major U.S. indexes wrapped up the week in the red.
- Traders are gearing up for the Federal Reserve’s January 28 decision alongside key tech earnings reports.
Intel shares fell roughly 17% on Friday, closing near $45.07, following the company’s warning that it is having trouble keeping up with demand for server chips used in AI data centers.
The timing couldn’t be more awkward for investors. Chip stocks have essentially become a straight bet on whether the AI buildout will generate profits rather than just costs.
The week kicks off Monday, bringing a flood of earnings reports alongside a Federal Reserve meeting that could reshape expectations for rate cuts and influence risk appetite.
On Friday, the Dow dropped 0.58%, while the S&P 500 held steady and the Nasdaq climbed 0.28%. Still, all three indexes wrapped up the week in the red. Jason Blackwell, chief investment strategist at Focus Partners Wealth, said investors were “pretty good” with the current environment but braced for more “twists and turns.” Janus Henderson portfolio manager Julian McManus labeled the upcoming earnings season a “show-me” moment for stretched winners. (Reuters)
Intel’s shares fell after it forecast first-quarter revenue between $11.7 billion and $12.7 billion, with adjusted earnings per share expected to break even—both figures falling short of market expectations. CEO Lip-Bu Tan expressed disappointment that the company couldn’t fully meet demand. Meanwhile, CFO David Zinsner said cloud customers were surprised by the sudden surge and are rushing to upgrade their outdated equipment. (Reuters)
The move also hit a crowded turnaround trade. Intel’s stock had surged ahead of earnings, fueled by high-profile endorsements and hopes of snagging customers beyond its foundry business. TD Cowen analysts called the rally a bet on “the dream” rather than near-term fundamentals, while Bernstein argued the company had misread the server cycle and its capacity needs. Separately, Jefferies and Oppenheimer noted that supply constraints should ease by the second quarter. (Reuters)
Next week’s calendar is packed, even without Intel’s recent slip. Roughly 20% of the S&P 500 companies will report earnings, including heavyweights like Apple, Microsoft, Meta Platforms, and Tesla. Investors will also weigh the Federal Reserve’s first policy move of the year, with expectations firmly set on a pause in rate hikes. The S&P 500 is currently trading above 22 times projected earnings, a level above its historical average. Franklin Templeton strategist Chris Galipeau cautioned that “the earnings bar had better be met.” (Reuters)
The Fed will release its policy statement on Wednesday, January 28, at 2:00 p.m. ET, with Chair Jerome Powell holding a news conference half an hour later at 2:30 p.m. ET, according to the Federal Reserve’s calendar. (Federal Reserve)
There are obvious risks here. If Intel’s supply constraints persist beyond expectations, it could miss out on lucrative data center sales just as rivals ramp up pressure. On top of that, any renewed tariff threats or a shift toward a more cautious Fed stance might quickly change the risk landscape.
When markets reopen, all eyes will be on whether Intel’s warning drags down other semiconductor stocks and if Big Tech’s earnings and forecasts back up the notion that AI spending is beginning to yield returns. Still, the main event this week is Wednesday’s Fed decision and Powell’s comments.
