Lead: U.S. equities moved higher on Tuesday as the Dow Jones Industrial Average notched another milestone and software names recovered after last week’s sell-off. The 30-stock Dow gained roughly 239 points (about 0.5%), with an intraday peak near 50,398, while the S&P 500 and Nasdaq both rose modestly. Investors rotated into software and select value sectors even as December retail sales came in flat and traders awaited this week’s jobs and inflation reports. Market participants described the session as selective rather than broad-based, driven by company-specific news and ahead-looking macro data.
Key takeaways
- The Dow rose about 239 points (0.5%), reaching an intraday high near 50,398.00; the S&P 500 and Nasdaq climbed roughly 0.3% and 0.2%, respectively.
- Software stocks led the rebound: Datadog jumped about 15%, ServiceNow rose 4%, and Unity climbed roughly 5% after an Oppenheimer upgrade.
- Retailers Costco and Walmart slipped about 1% as Commerce Department data showed December retail sales were flat versus a 0.4% consensus gain; November had risen 0.6%.
- TSMC reported record January revenue of 401.3 billion New Taiwan dollars, lifting its shares about 3% in premarket trading.
- Coca‑Cola’s adjusted revenue missed estimates by nearly 2%—its largest top-line shortfall since July 2014—and its North America concentrate sales rose only 1%.
- CVS reiterated 2026 revenue guidance of at least $400 billion but trimmed cash‑from‑operations guidance to at least $9 billion, sending its stock down about 3% premarket.
- After‑hours movers included ON Semiconductor (Q4 revenue $1.53bn, shares down ~6%) and Upwork (active clients fell to 785,000; shares tumbled ~22%).
Background
The Dow’s move to fresh highs follows a volatile stretch that began with a notable tech-led sell-off last week. Many megacap and software names lost ground in that episode, prompting traders to question whether weakness would spread to broader indexes; this week’s gains suggest some stabilization as the S&P 500 recovered above its 50‑ and 100‑day moving averages. Market attention is concentrated on incoming U.S. macro data—including the February jobs report due Wednesday and the consumer price index on Friday—which will influence Federal Reserve expectations and risk appetite.
Corporate earnings and guidance are again shaping sector rotations: strong results or optimistic outlooks have lifted selected names while disappointing top lines or tighter cash forecasts have punished others. The November and December retail-season data highlighted uneven consumer activity—weather disruptions and persistent price pressure have complicated holiday spending patterns. Large multinationals with differing geographic exposures, such as Coca‑Cola and Marriott, illustrated how regional dynamics can diverge from global trends.
Main event
Trading on Tuesday saw buying skewed toward software and some value-oriented financials and entertainment stocks. Datadog surged about 15% and ServiceNow added roughly 4% as investors pared back last week’s rapid sector sell-off. Unity rose near 5% following an Oppenheimer upgrade that projected stronger revenue growth and margin expansion this year. At the same time, traditional retail names lagged: Costco and Walmart each fell around 1% amid the flat December retail-sales print.
The Dow’s advance was supported by gains in several blue chips: entertainment giant Disney and financials such as American Express and Goldman Sachs contributed to the roughly 239‑point rise. Intraday, the Dow reached a high near 50,398.00, marking another psychological milestone after the index first crossed the 50,000 threshold last week. The S&P 500 and Nasdaq posted smaller gains, reflecting the selective nature of the rally.
In premarket movers, Taiwan Semiconductor Manufacturing’s January revenue record—401.3 billion New Taiwan dollars, up 37% year‑over‑year—helped lift chip and supplier stocks. Dupont beat expectations on adjusted Q4 earnings (46 cents vs. 43 expected) and saw shares rise about 2%. CVS’s reaffirmed revenue outlook but lowered cash‑flow guidance put pressure on its shares despite a Q4 beat on the top and bottom lines.
Analysis & implications
The session underscores a bifurcated market where headline indexes can climb even as internal breadth remains uneven. A concentrated rebound in software and a handful of large-cap names can lift the S&P and Dow while many mid- and small-cap stocks lag. That pattern raises questions about the durability of the advance: if gains are narrow, the market could be more vulnerable to shocks or disappointing macro prints later in the week.
Macro releases this week—particularly the February jobs report and Friday’s consumer price index—are likely to be the proximate drivers of volatility. Strong labor-market data could bolster risk assets if it’s interpreted as consistent with a resilient economy; conversely, hotter inflation could rekindle Fed-tightening concerns and weigh on equities. Traders are therefore treating current gains as conditional and preparing for choppier sessions if data deviates materially from expectations.
On the corporate front, the mixed batch of earnings and guidance highlights dispersion across sectors and geographies. Companies with clearer secular growth stories or industry-specific tailwinds (for example, chipmakers benefiting from demand cycles) attracted capital, while firms facing near‑term demand softness or cash‑flow downgrades underperformed. The divergence suggests active stock selection will matter more than passive exposure in the near term.
Comparison & data
| Series | Move |
|---|---|
| Dow Jones Industrial Average | +≈239 points (intraday high ~50,398.00) |
| S&P 500 | +≈0.3% |
| Nasdaq Composite | +≈0.2% |
| December retail sales (m/m) | 0.0% (consensus +0.4%; Nov +0.6%) |
The table above frames the session: headline indexes higher, but retail activity that underwhelmed consensus. The retail‑sales miss matters because consumption accounts for roughly two‑thirds of U.S. GDP; a flat December reading reduces near‑term upside for consumer‑facing retailers and raises the bar for companies that had banked on stronger holiday demand. Meanwhile, TSMC’s record monthly revenue points to continued strength in certain tech supply chains even as demand patterns vary by segment.
Reactions & quotes
Market strategists and company statements were mixed on the sustainability of gains and on regional performance.
“We don’t think that it’s going to be a clean trade. It will be choppy, you have to be selective, but there will be winners through this.”
Sonali Basak, chief investment strategist, iCapital
“Highest monthly revenue ever,”
TSMC (official statement on January revenue)
Unconfirmed
- Whether the current rotation into software and value names signals a sustained regime change rather than a short-lived rebound remains unconfirmed.
- Attribution that poor December retail sales were mainly due to weather and inflation is plausible but not definitively established by the data alone.
- Analyst price‑target projections and upgrades (e.g., Palantir or individual software upgrades) reflect forecasts, not guaranteed outcomes.
Bottom line
The market’s advance on Tuesday was characterized by concentrated gains that lifted major indexes even as many names and sectors lagged. Key macro reports this week—jobs and CPI—will likely dictate whether the rally broadens or fades. Investors should treat current strength as conditional, emphasize stock selection, and monitor earnings and guidance for signs of durable demand improvement.
For traders, volatility is likely to remain elevated in the near term; for longer‑term investors, the episode reinforces the value of diversification across sectors and geographies given uneven company‑level performance. Watch next week’s economic prints and major corporate guidance updates for clearer signals on whether the Dow’s record is the start of a sustained advance or a technical high amid narrow breadth.