New York, January 27, 2026, 15:18 EST — Regular session
Adobe shares dropped roughly 2.7% on Tuesday, underperforming the wider tech sector as caution lingered around application software. The Photoshop creator’s stock fell $8.21 to close at $296.51, hitting a session low of $292.97 earlier on.
The decline is significant as U.S. stocks push toward new highs, yet leadership is tightening and investors prepare for the Federal Reserve’s decision alongside a busy earnings calendar. Software stocks often react sharply to rate moves since their valuations depend heavily on long-term growth projections.
The S&P 500 hit a fresh record, with the Nasdaq also climbing, while the Dow slipped, weighed down by a sharp drop in health insurers after a Medicare-related proposal. “There’s a little bit of a bifurcated market today,” said Phil Blancato, chief market strategist at Osaic Wealth, speaking to Reuters. He noted the market is “waiting for a big week of earnings.” Charlie Ripley, senior investment strategist at Allianz Investment Management, said he was focused on “who the dissenters might be” to gauge the unity among policymakers. (Reuters)
Software lagged within tech. The iShares Expanded Tech-Software Sector ETF, which targets software stocks, slipped roughly 1.3%, while the Technology Select Sector SPDR Fund climbed around 1.5%. Oracle tumbled about 4.4%, and ServiceNow slid 3.4%.
Adobe’s next major event is its first-quarter earnings report on March 12. Investors want to see if the new AI features are driving pricing power and customer retention, and how demand is faring for its creative and marketing products amid a volatile software sector. (Adobe)
The company’s most recent major update arrived in December, with Adobe projecting fiscal 2026 revenue between $25.90 billion and $26.10 billion, alongside adjusted EPS of $23.30 to $23.50—just above Wall Street’s expectations. The firm highlighted strong demand for its design suite and growing revenue from its AI products. (Reuters)
Macro factors continue to drive the mood. The Fed kicked off its two-day meeting Tuesday, with a policy announcement scheduled for Wednesday at 2:00 p.m. ET, followed by a 2:30 p.m. press conference, per the central bank’s calendar. (Federal Reserve)
On Monday, Adobe revealed a minor partnership, supporting a free branding curriculum with BUILD.org aimed at grades 7–12. The program weaves Adobe Express into a classroom business simulation. “Through our partnership with BUILD, we’re proud to help bring branding and design skills into classrooms in a way that’s engaging, accessible, and relevant,” said Amy White, Adobe’s global head of corporate social responsibility and social impact communications, in the release. (BUILD)
The setup works both ways. If the Fed turns more hawkish or mega-cap tech earnings take a hit, high-multiple software stocks could slide once more. Adobe might end up reflecting the sector’s overall sentiment instead of its own news.
Traders are zeroed in on the Fed’s decision Wednesday. After that, eyes turn to Adobe’s earnings on March 12. The stock’s next move hinges on whether Fed signals and the earnings season can sustain appetite for software risk. (Federal Reserve)
