New York, January 29, 2026, 10:01 EST — Regular session
- In early trading, the Dow edged up roughly 0.1%, hovering close to 49,000
- Big Tech earnings spotlight AI investments and margin pressures
- Traders are focused on Apple’s earnings report due Thursday, with inflation figures set for Friday.
The Dow Jones Industrial Average edged higher by 47.89 points, or 0.10%, reaching 49,063.49 by 9:45 a.m. ET, after fluctuating between 48,938.27 and 49,292.81. The S&P 500 dropped 0.35%, while the Nasdaq slid 0.93%. 1
The tension is clear: investors tolerate hefty capital spending—“capex,” the funds companies funnel into chips, data centers, and gear—only if sales keep pace. “The market appears to be questioning whether these massive capital expenditure hikes will generate sufficient returns,” said Jesse Cohen, senior analyst at Investing.com. 2
Wednesday saw the Dow finish almost unchanged after the Federal Reserve kept its benchmark rate steady at 3.50%-3.75%, offering scant hints on when borrowing costs might drop next. “Whether you were bullish or bearish … you walked away feeling about the same,” said Michael James, an equity sales trader at Rosenblatt Securities. 3
Dow components diverged after the close. Microsoft shares fell in after-hours trading following a warning about record AI-related expenses. Meanwhile, IBM surged after beating quarterly estimates, thanks to strong demand for AI-driven software. “One big obvious issue is that revenues are up 17% and the cost of revenues are up 19%,” noted Eric Clark, portfolio manager of the LOGO ETF, which includes Microsoft. 4
New labor figures kept the tone “steady but not great.” Initial jobless claims dropped to 209,000 last week, though the previous week’s numbers were revised higher. Continuing claims slid to 1.827 million, suggesting hiring still holds firm. With a January 30 funding deadline approaching, there’s growing concern about further delays in U.S. economic data, including next week’s employment report, Reuters said. 5
The macro backdrop showed cracks. The U.S. trade deficit nearly doubled in November, jumping 94.6% to $56.8 billion as imports spiked. Capital goods like computers and semiconductors drove the surge, a trend tied to the AI investment boom, the report noted. Economists cautioned this could lead to cuts in fourth-quarter growth forecasts. 6
The Dow is price-weighted, so stocks with higher prices have a bigger impact on the index than their market caps might imply. This setup can make the benchmark react sharply to earnings moves in just a few components.
The risk remains tangible. Should AI spending outpace profit growth, investors might continue to push valuations higher — particularly if interest rates linger at elevated levels and economic data trickle in sporadically or with delay.
Apple is set to report after the close, with analysts forecasting its strongest iPhone sales growth in over four years. Total revenue is expected to hit a record $138.43 billion. Investors will be paying close attention to any remarks on costs and supply issues amid tightening memory chip markets. Gerrit Smit, manager of the Stonehage Fleming Global Best Ideas Equity fund, noted, “Apple can probably generate a positive return on very little AI investment, thanks to its distribution.” 7
Friday at 8:30 a.m. ET brings the December producer price index, a key gauge for pipeline inflation. Traders will watch closely to see if it hints at the Federal Reserve’s next steps this year. 8
