S&P 500 closes little changed Tuesday as declines in software shares weigh on index: Live updates

The S&P 500 has traded sideways since first topping 6,800 in October, with some parts of the market showing strength while others are showing severe weakness. Energy, materials, staples and industrials are rallying, while financials, discretionary and tech has slid.

That level of extreme dispersion usually results in broad weakness, as the stronger parts of the market catch down to the weaker ones, according to BTIG. However, the new leaders have yet to correct, the firm observed. Krinsky said semiconductors is a key sector to watch to see which way the market will go.

"For most participants this is not a new revelation, but does continue to highlight how much dispersion there is below the surface," Jonathan Krinsky wrote on Monday. "The million-dollar question is which way does the bifurcation resolve?"

— Sarah Min

Investors are loading up on stocks at a high enough level to trigger a contrarian sell signal, according to the latest Bank of America Fund Manager Survey.

Portfolios are holding their biggest overweight position on stocks since December 2024 and their most underweight on bonds since September 2022, BofA investment strategist Michael Hartnett said. One caveat: Wall Street professionals are rotating out of U.S. offerings and into emerging markets and EU, though shying away from Japan.

The bullish move has triggered the BofA Bull & Bear Indicator, a measure of stock market sentiment that is now sending a "sell" signal with a reading of 8.2. On a global scale, Hartnett said bullishness was last this strong in June 2021. High levels of market optimism can mean stocks are overvalued and should be sold.

Hartnett recommends investors reduce risk in the first quarter and implement a number of pair trades that include going long bonds and short gold, long the U.S. dollar and short emerging markets and long tech stocks and short banks.

In other developments, Wall Street also has taken its most overweight commodities position since May 2022 and has edged up cash holdings to 3.4% of portfolios, just 0.2 percentage point off the record low. Investors are betting on a "run it hot" economy, with the most optimism on growth since February 2022, Hartnett said.

— Jeff Cox

Gemini Space Station fell about 14% after clearing out part of its c-suite. 

The crypto exchange let go of its chief operating officer, chief financial officer and chief legal officer, according to its disclosure filed Tuesday with the US Securities and Exchange Commission. 

The elimination of the roles comes less than two weeks after Gemini said it would lay off 25% of its workforce. 

The company first went public last September.

— Liz Napolitano

Investor Jenny Harrington believes that buying hard asset, low obsolescence dividend stocks could be a good hedge against growing artificial intelligence threats.

"They're stocks that, assuming humanity survives AI, we're going to be using these products throughout in the next 10, 15, 20 years," the CEO of Gilman Hill Asset Management said on CNBC's "Halftime Report" on Tuesday afternoon. "Nothing too exciting, just slow and steady."

To that end, Harrington listed stocks such as Amcor, Kimberly-Clark, Bristol-Myers Squibb and Dominion Energy as ones that fit the bill. She added that these dividend names all have "decent earnings growth ahead" and yields of between 4% and 6%.

— Lisa Kailai Han

Economic data is pointing the way toward more interest rate cuts this year, according to Citigroup economists.

Even with a stronger than expected employment report and core inflation still above target, "details point to a clear path for further rate cuts," Citi economist Andrew Hollenhorst said in a note. Hollenhorst said that same sentiment is likely to be reflected in minutes from the Federal Reserve's January meeting that will be released Wednesday.

"Markets have appropriately recognized the residual seasonality in jobs data and cooling trend in inflation," he added. "That means policy rates are likely to fall further this year. It also means pricing of Fed rate cuts is free to increase further as part of the general risk-off in markets."

Chicago Fed President Austan Goolsbee told CNBC on Tuesday that he expects additional rate cuts this year so long as the inflation data cooperates.

— Jeff Cox

General Mills shares headed for their worst day in nearly six years on Tuesday after the Lucky Charms and Progresso parent lowered its 2026 outlook.

General Mills said organic net sales would slide between 1.5% and 2% after previously forecasting between a loss of 1% to a gain of 1%. The company said operating profit and adjusted earnings per share would plunge between 16% and 20% despite an earlier prediction of 10% to 15% down.

Shares dropped more than 7% in afternoon trading. If that holds through Tuesday's closing bell, it would mark the stock's biggest one-day retreat since a slide of more than 11% in March 2020.

— Alex Harring

On Tuesday, 37 stocks in the S&P 500 traded at new 52-week highs.

Tickers that hit this milestone included:

• Ross Stores trading at all-time high levels since its IPO in August 1985
• Dollar General trading at levels not seen since April 2024
• Diamondback Energy trading at levels not seen since January 2025
• FedEx trading at all-time high levels back to its IPO in April 1978
• Welltower trading at all-time high levels back to its incorporation as Health Care REIT in 1985
• NextEra Energy trading at all-time high levels back through our history to February 1986
• NiSource trading at all-time highs back through our history to 1984
• PulteGroup trading at levels not seen since October 2024
• Walmart Stores trading at all-time high levels back to when it first began trading on the NYSE in August 1972

The nine stocks trading at new 52-week lows were:

• Trade Desk trading at lows not seen since April 2020
• Booking Holdings trading at lows not seen since September 2024
• Domino's Pizza trading at lows not seen since November 2023
• Factset Research Systems trading at lows not seen since December 2018
• GoDaddy trading at lows not seen since November 2023
• Intuit trading at lows not seen since January 2023
• Roper trading at lows not seen since April 2020
• Workday trading at lows not seen since November 2022
• CoStar Group trading at lows not seen since February 2019

— Lisa Kailai Han, Christopher Hayes

Amazon entered its 9th day of consecutive losses on Friday. If red by market close, the stock will tie for its longest losing streak ever. Amazon first saw 10 days of consecutive losses in 1997, nearly three decades ago. Its forward price-to-earnings ratio is also the lowest since 2008. So far, the stock has shed nearly $450 billion from its market valuation. 

The streak began after Amazon revealed it plans to spend $200 billion in capital expenditures this year. The company plans to invest in AI by scaling its data centers and servers.

"Every single customer is seeing more and more demand for moving their workloads to the cloud, putting their data on AWS and then layering AI on top of that to get value for their business," AWS CEO Matt Garman said in an interview with CNBC.

The news comes after investors have expressed concerns about hyperscalers like Amazon overspending on AI. "It's an indication of how bullish we are about the future and growth of AWS," Garman said of the investment.

Amazon is down 12% year to date.

— Itzel Franco

Rothschild & Co. Redburn upgraded Dollar Tree to buy on Tuesday, pointing to its attractive valuation, earnings growth and potential upside from the acceleration of its multi-price roll-out.

Since it sold Family Dollar last July, Dollar Tree has refocused on its core operations for the first time in a decade, analyst Sam Hudson said in a note to clients.

"Following the Family Dollar divestment, we argue that Dollar Tree is a higher-quality, higher-return, more cash-generative opportunity than it has been for the past decade, warranting a higher valuation than recent history," he wrote.

Hudson's price target of $165 implies nearly 31% upside from Friday's close.

— Michelle Fox

Federal Reserve Governor Michael Barr said Tuesday he sees risks to both employment and inflation and sees keeping interest as they are the best policy for now.

On the labor market, Barr said he sees a "tentative balance" between both low hiring and low firing rates but says the picture is "delicate" and "especially vulnerable to negative shocks." On inflation, he noted that the Fed's preferred gauge is still stuck around 3% with a "significant" risk that it sticks there, Barr said in a speech to the New York Association for Business Economics.

"Based on current conditions and the data in hand, it will likely be appropriate to hold rates steady for some time as we assess incoming data, the evolving outlook, and the balance of risks," Barr said.

As a governor, Barr is a permanent voting member of the rate-setting Federal Open Market Committee.

— Jeff Cox

Japanese equities just had one of their best 2-week relative returns compared to the rest of the world ever, according to Goldman Sachs. And the firm sees more strength ahead.

Goldman moved its rating on the country's equities in a Monday note to overweight from neutral. 

It comes after the Nikkei 225's nearly 5% jump last week after incumbent Prime Minister Sanae Takaichi's Liberal Democratic Party romped to victory in the country's national elections. Analyst Andrea Ferrario said in the note that the moves after the election are consistent with months-long developments in the market. 

"Markets started pricing higher growth in Japan in September, and growth pricing increased further at the start of 2026, catching up with EM and outpacing both Europe and US," Ferrario wrote. "Japan equities re-rated vs. the World and the long-end of the JGB yield curve flattened, driven by lower uncertainty and investors' increased confidence in the Government and the BOJ's ability to resolve the 'bad' fiscal tail."

Goldman recommends owning defense companies, shipbuilding stocks and names with exposure to corporate governance reforms in Japan. The firm added that despite the expectation for room to expand, implied volatility in Japanese equities is elevated. 

— Davis Giangiulio

Trivariate Research has adopted a more bearish stance on U.S. equities this year, citing an increased level of volatility in the market due to a higher number of companies potentially disrupted by artificial intelligence.

This list includes industries that caught some investors off guard, wrote Trivariate Research co-founder Adam Parker, such as those that could be disrupted by AI tools automating financial work flows and the introduction of AI freight tools.

"While several of these stocks bounced higher late last week, we remain concerned that these stocks are 'guilty until proven innocent,' meaning they are more likely to have multiple contraction than expansion for the foreseeable future. We think a useful exercise for investors is to imagine that they are the CEO of a company and focus on businesses that are making a high margin off of them," Parker wrote. "This likely means certain data companies, and other expensive service companies are vulnerable."

Outside of AI, other industries could also see higher volatility introduced by the Trump administration, such as companies affected by metals tariff rollbacks and credit card fee caps. As such, Parker sees a greater likelihood of multiple contraction this year.

"The bottom line is this: when there is uncertainty, we should pay a lower multiple for equities than when there is certainty. We reiterate the view laid out in our 2026 year-ahead outlook that the probability of multiple contraction for the U.S. equity market this year is greater than the probability of multiple expansion," he wrote. "That makes us more bearish than consensus."

— Lisa Kailai Han

Chicago Federal Reserve President Austan Goolsbee told CNBC on Tuesday that further interest rate cuts are possible if inflation shows more progress lower.

Taking a cautious view on last week's consumer price index report, which showed headline inflation down to 2.4%, Goolsbee said he remains wary that the easing in prices will continue and wants to see what the longer-term impact from tariffs will be.

"If this proves to be transitory, and we can show that we're on the path back to 2% inflation, I still think there's several more rate cuts that can happen in 2026," he said. "But we've got to see it."

Goolsbee does not vote this year on the rate-setting Federal Open Market Committee but will vote in 2027.

— Jeff Cox

The S&P 500 began Tuesday's session in negative territory.

The broad-based index fell 0.2% shortly after the opening bell, while the Nasdaq Composite dropped 0.7%. The Dow Jones Industrial Average added 140 points, or 0.3%.

— Sean Conlon

Check out the companies making headlines before the bell:

• Warner Bros. Discovery, Paramount Skydance — Shares of the two media and entertainment companies rose after Netflix granted Warner Bros. Discovery a seven-day waiver to hold deal talks with Paramount Skydance. Warner Bros. Discovery gained 2.4%, while Paramount jumped nearly 4%.
• Masimo, Danaher — Shares of health tech giant Masimo rallied more than 33% after The Wall Street Journal and Financial Times reported, citing sources, that the company was nearing a deal with Danaher to be acquired for $180 per share, or $10 billion, in cash. Shares of Danaher slid more than 7%.
• Norwegian Cruise Line Holdings — The cruise operator moved 7.5% higher following a Wall Street Journal report, citing people familiar, that Elliott Investment Management has built a more than 10% stake in Norwegian. The activist investor plans to press for changes to turn around the company's performance. Norwegian's stock has lagged behind its competitors, Royal Caribbean and Carnival.

Read the full list here.

— Sarah Min

The CBOE Volatility Index, or VIX, was above the 20 level on Tuesday, hitting 22.50.

The index — otherwise known as Wall Street's "fear gauge" — was trading around 17 at the beginning of last week's trading period.

— Sean Conlon

Silver and gold fell in early premarket trading on Tuesday as investors awaited delayed economic data, with little geopolitical news during the holiday-shortened week.

Spot silver was last seen down 2% to trade at around $74.85 per ounce, while silver futures fell 4% to trade at $74.7 dollars per ounce.

Hecla Mining, which owns one of the biggest silver mines in the world, Green Creek Mine in Alaska, was down 3% before the market opened. Meanwhile, Endeavour Silver shed 3.5%, First Majestic Silver was down nearly 4%, Coeur Mining lost nearly 3.4%, Teck Resources and Silvercorp Metals were roughly 3% lower, and Wheaton Precious Metals was down over 2%. Read more.

— Sawdah Bhaimiya

JPMorgan sees shares of AeroVironment rising as demand for drones and space capabilities swell.

The bank initiated the aerospace and defense stock with an overweight rating. Analyst Seth Seifman's $320 price target implies that shares of AeroVironment could rally 31% from here.

"AeroVironment (also known as AV) looks well-positioned to deliver mid-teens growth thanks to its exposure to fast-growing areas within defense, both domestically and internationally, including drones, counter-drone systems, and space," Seifman wrote. "AVAV is also one of the more experienced defense companies that could benefit from DoD efforts to expand the industrial base and adopt a more commercial approach."

CNBC Pro subscribers can read more here.

— Lisa Kailai Han

Warner Bros. Discovery on Tuesday said it will reopen deal talks with Paramount Skydance under a seven-day waiver from Netflix to explore "deficiencies" in Paramount's offer to buy the entirety of WBD.

The legacy media company has a pending transaction with Netflix for its streaming and studio businesses. Paramount launched a hostile tender offer straight to WBD shareholders at $30 per share after losing out to Netflix in a bidding war.

"Netflix has provided WBD a limited waiver under the terms of WBD's merger agreement with Netflix, permitting WBD to engage in discussions with Paramount Skydance ("PSKY") (NASDAQ: PSKY) for a seven-day period ending on February 23, 2026 to seek clarity for WBD stockholders and provide PSKY the ability to make its best and final offer," Warner Bros. Discovery said in a release. Read more.

— Sara Salinas

Shares of health tech giant Masimo rallied more than 33% after The Wall Street Journal and Financial Times reported, citing sources, that the company was nearing a deal with Danaher to be acquired for $180 per share, or $10 billion, in cash.

— Fred Imbert

Tech stocks began the week on the back foot, adding to their struggles from the past month.

The State Street Technology Select Sector SPDR ETF (XLK) dropped nearly 1% in the premarket, led by declines in Autodesk and Teledyne. Both stocks lost more than 3% each. Nvidia also pulled back around 1%.

Tech-related names such as Meta Platforms and Amazon declined 1.1% and 0.2%, respectively.

— Fred Imbert

Stocks aren't coming into the holiday-shortened trading week with momentum.

The Dow and S&P 500 each finished last week down more than 1%. Each index notched its fourth losing week of the last five, while the S&P 500 also recorded two negative weeks in a row.

The Nasdaq Composite slid more than 2%. That marked the technology-heavy index's fifth straight losing down week, its first losing streak of that length since 2022.

— Alex Harring, Christopher Hayes

Stock futures are little changed shortly after 6 p.m. ET.

Dow and S&P 500 futures rose 0.2% and 0.1%, respectively. Nasdaq 100 futures slipped 0.2%.

— Alex Harring