NEW YORK, Jan 28, 2026, 17:10 EST — After-hours
Microsoft dropped nearly 4% in after-hours Wednesday as its AI-driven push sent quarterly capital spending soaring 66% on data centers and chips. IBM jumped roughly 6% after beating fourth-quarter revenue forecasts. Meta climbed close to 4% following its forecast of $115 billion to $135 billion in capex for 2026. Tesla gained about 2%, announcing a roughly $2 billion investment in Elon Musk’s xAI. 1
The Dow Jones Industrial Average edged up 12.55 points, or 0.03%, to close at 49,015.96. The S&P 500 ended almost flat, while the Nasdaq Composite rose 0.17%. Markets remained quiet after the Federal Reserve held rates steady and gave little indication on when borrowing costs might drop again. Focus quickly turned to earnings from the “Magnificent Seven,” the megacap tech stocks driving much of the recent rally. “Whether you were bullish or bearish going into the press conference you walked away feeling about the same,” said Michael James, an equity sales trader at Rosenblatt Securities. 2
The S&P briefly topped 7,000 for the first time, buoyed by hopes around AI and a strong batch of Big Tech earnings, along with expectations for easier monetary policy ahead. “You could definitely have a continuation on the rally in equities if the earnings season shows that AI expenditure is bringing in revenues,” said Jeff Leschen, managing director at Bramshill Investments. With tech stocks making up nearly half of the S&P 500, the wider market remains tightly linked to a few key earnings reports. 3
The Fed held its benchmark rate steady at 3.50%-3.75% in a 10-2 vote, with Chair Jerome Powell adopting a cautious stance. “The economy has once again surprised us with its strength,” Powell noted. Following the decision, interest-rate futures moved to price in a potential cut at the June 16-17 meeting, while Treasury yields inched higher. 4
The Dow barely moved after a sharp split the day before, when it dropped 409 points weighed down by UnitedHealth’s 19.6% slide. “There’s a little bit of a bifurcated market,” said Phil Blancato, chief market strategist at Osaic Wealth, citing the Medicare-related pressure even as investors brace for a heavy earnings week. 5
UnitedHealth’s shares took a hit after it projected a drop in revenue for 2026 — a rare decline not seen in decades — driven by a government proposal for lower Medicare reimbursements in 2027. Morningstar analyst Julie Utterback noted that “investors hoping for a quick turnaround may have to wait longer than hoped.” 6
Big Tech’s focus has shifted from whether to invest in AI to how quickly those investments pay off. Microsoft, Meta, and Amazon are poised to boost AI spending by roughly 30%, pushing the total beyond $500 billion this year, Reuters reported. “Like in the internet boom, the first-mover advantage doesn’t always win the marathon,” noted David Wagner, head of equities at Aptus Capital Advisors. 7
Matthias Scheiber, head of the multi-asset team at Allspring Global Investments, warned that the AI-driven surge in stocks might also keep inflation stubborn, making rate cuts harder to come by. The Fed continues to signal persistent inflation, while markets eye June for a possible easing. Investors are now turning their focus to Apple’s earnings report due Thursday. 8
