New York, January 24, 2026, 12:59 (EST) — The market has closed.
The Communication Services Select Sector SPDR Fund (XLC) closed Friday at $116.96, gaining roughly 0.6% after a choppy week that kept investors on edge over media, telecom, and internet stocks. With U.S. markets closed for the weekend, focus now turns to the upcoming Federal Reserve meeting and fresh regulatory developments weighing on sector leader Meta Platforms.
The sector is dominated by a few big names. Meta makes up roughly 19.7% of XLC, with Alphabet’s two share classes combining for about another 20%, according to State Street’s holdings data. That concentration means one earnings report or regulatory notice can swing the entire sector.
That focus is key next week as investors wrestle with interest-rate risks alongside a crowded schedule of megacap earnings. Traders want to see if AI investments are actually boosting profits. “It’s been a little bit of a short but steep roller-coaster ride over the past several days,” said Yung-Yu Ma, chief investment strategist at PNC Financial Services Group. Reuters
Friday saw the Dow drop 0.58%, with the S&P 500 holding steady and the Nasdaq inching up 0.28%. Intel’s 17% tumble on a gloomy forecast sparked fresh skepticism over the valuations of expensive tech stocks.
Data from S&P Dow Jones Indices showed the S&P 500 Communication Services sector index climbed 0.14% on the day.
The sector found support earlier this week as Wall Street bounced back after President Donald Trump stepped back from tariff threats linked to the Greenland dispute, lifting a macro shadow weighing on risk assets. Meta surged 5.7% on Thursday, topping the megacap winners that day.
Heading into the weekend, Meta faces renewed scrutiny abroad. UK regulator Ofcom has launched an investigation into whether Meta met its legal obligations concerning information requests tied to WhatsApp for Business. The watchdog noted that “the available evidence suggests” some of the data supplied “may not have been complete and accurate.” www.ofcom.org.uk
Meta’s stock climbed 1.72% Friday, closing at $658.76, providing some support to the communication services sector. At the same time, Alphabet’s Class C shares dipped 0.73%.
Spotify grabbed headlines when Goldman Sachs upgraded its stock to “Buy.” Analyst Eric Sheridan cited the recent dip in share price as a key factor in the revised rating. The company is set to release its quarterly earnings on Feb. 10, according to Barron’s.
Telecom saw subdued action Friday. Verizon, AT&T and T-Mobile eked out modest gains, while tower operator SBA Communications climbed 1.0% — a quiet pattern typical of investors shifting to defense heading into the weekend.
Inflation and rates headlines linger as context. January’s PMI, a key monthly gauge of U.S. business activity, came in steady. But price pressures remain high, driven largely by tariff-related costs. Chris Williamson, chief business economist at S&P Global Market Intelligence, pointed to “increased costs, widely blamed on tariffs” as a main factor pushing prices up. Reuters
The sector’s calm might shatter quickly. A sign that inflation remains stubborn—or that regulators clamp down harder on the top platforms—could slam ad-driven, growth-heavy stocks initially, then ripple through the wider communication services group.
Wednesday marks a key date as the Fed concludes its Jan. 27-28 meeting, with Chair Jerome Powell scheduled for a press conference. U.S. stocks will resume trading Monday, and investors in communication services will be focused on whether the sector’s megacaps hold steady without new policy or regulatory surprises.
