New York, Jan 18, 2026, 13:25 (EST) — Market closed
- Communication Services Select Sector SPDR Fund (XLC) dropped 0.9% at Friday’s close, weighed down by losses in Alphabet and Disney.
- U.S. markets will be closed Monday in observance of Martin Luther King Jr. Day, with trading resuming Tuesday.
- Look for Netflix’s upcoming earnings call and news on Warner Bros deals to drive the sector’s moves.
Communication services stocks closed lower on Friday, pushing the sector’s primary U.S. exchange-traded fund down as Wall Street heads into a long weekend. Investors are already shifting focus to a busy Tuesday ahead despite the subdued trading session.
The stock market will remain closed Monday in observance of Martin Luther King Jr. Day. Investors get an extra day to weigh deal risks and upcoming earnings reports before trading picks up again Tuesday. 1
Communication services hinge on a small cluster of major players, and this week’s schedule zeroes in on them — spanning streaming giants to telecom firms.
The State Street Communication Services Select Sector SPDR Fund (XLC) — an ETF that bundles stocks but trades like a single share — closed Friday down 0.9% at $115.17. Alphabet dropped 0.9%, Walt Disney slipped 1.9%, while Meta Platforms and Netflix saw little movement. Verizon and AT&T both ended lower, with Warner Bros Discovery inching up.
The shifts are logical considering the fund’s concentration. Meta alone represents around 19% of XLC, while Alphabet’s two share classes combined add up to about 20%. Netflix, Disney, and Verizon also rank among the biggest holdings, according to data from State Street Global Advisors. 2
Netflix’s upcoming quarterly report is set to be the next key event, though investors are currently fixated on its chase for Warner Bros’ streaming and studio assets, along with Paramount Skydance’s competing bid. “The earnings will be overshadowed by what Netflix says about the deal … what’s next and the questions around it,” said PP Foresight analyst Paolo Pescatore. 3
Political risk is now part of the equation. President Donald Trump purchased up to $2 million in Netflix and Warner Bros Discovery bonds just weeks after the merger announcement, according to financial disclosures reported by Reuters. He’s also indicated he will weigh in on whether Netflix can move forward — a clear signal this deal faces scrutiny far outside Hollywood. 4
Telecom is providing its own catalyst. Frontier’s merger with Verizon is set to finalize before markets open on Jan. 20. Nasdaq announced that Frontier shares will be halted following Friday’s after-hours session, with the pause continuing through the close and the stock remaining suspended on Jan. 21. 5
The broader market mood remains uneasy but stable. U.S. stocks ended Friday almost unchanged ahead of the holiday, with earnings season just getting underway. “One of the other reasons markets have been flat-lining is we’re at the start of the earnings season,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial. 6
This sector’s setup is a double-edged sword. One headline about the Warner contest or a misstep in Netflix’s guidance could jolt the group, given that the ETF leans heavily on just a handful of firms. Plus, the deal remains under regulatory watch and caught in a protracted bidding battle.
Tuesday’s trading will zero in on Netflix’s earnings and any insight into the integration of the Warner assets, plus the timeline the company expects. Investors are also tracking Frontier’s merger details and fresh cues from regulators regarding the media deal.
