• Wall Street rebounded Tuesday, snapping a two-day losing streak as Big Tech took the lead. The Nasdaq rallied 1.4%, with the S&P 500 and Dow adding 0.7% and 0.3%, respectively, as investors turned their attention to strong earnings and a dose of AI-fueled optimism.
• Traders also digested weaker-than-expected jobs data, which hinted at a cooling labor market. With China’s tariff retaliation in the background, the market steadied as Wall Street weighed the Fed’s next moves on interest rates and inflation.

Winners & Losers

What’s up 📈

• Spotify soared 13.24% after reporting its first full year of profitability, posting 1.14 billion euros in net income and a fourth-quarter revenue beat. ($SPOT)
• Palantir Technologies jumped 23.99% after reporting stronger-than-expected fourth-quarter results, attributing the earnings beat to its artificial intelligence platform gaining traction. ($PLTR)
• Grab surged 12.56% after reports surfaced that the Southeast Asian ride-hailing and food delivery app was in merger talks with rival GoTo. ($GRAB)
• Ferrari gained 7.08% after reporting a 21% increase in net profit for 2024 and forecasting at least 5% revenue growth in 2025. ($RACE)
• Super Micro Computer climbed 8.60% amid hopes that its upcoming second-quarter business update will bring positive news. ($SMCI)
• SiriusXM rose 2.58% after Berkshire Hathaway increased its stake in the streaming company to 35%. ($SIRI)

What’s down 📉

• Estée Lauder plummeted 16.07% after issuing weak earnings guidance, announcing over $1 billion in pretax charges, and revealing plans to cut 7,000 jobs. ($EL)
• PayPal sank 13.17% despite reporting a fourth-quarter earnings and revenue beat, as concerns over a slowdown in payment volume weighed on shares. ($PYPL)
• Merck dropped 9.07% after issuing disappointing full-year earnings and revenue guidance, falling below analysts’ expectations. ($MRK)
• Clorox slipped 7.24% despite posting a fiscal second-quarter earnings and revenue beat, as the company lifted full-year earnings guidance. ($CLX)
• PepsiCo declined 4.51% after missing revenue guidance for the third consecutive quarter, citing weaker demand for snacks and beverages in North America. ($PEP)
• Illumina lost 5.26% after also being added to China’s "unreliable entity" list, raising concerns over potential business restrictions. ($ILMN)
• GEO Group and CoreCivic dropped 7.78% and 5.65%, respectively, after El Salvador offered to jail U.S. criminals and undocumented migrants, raising concerns about reduced demand for private prisons. ($GEO, $CXW)
• Vaccine stocks stumbled after Robert F. Kennedy Jr’s nomination as Health and Human Services secretary advanced to a Senate vote, with Moderna falling 6.51% and BioNTech declining 2.24%. ($MRNA, $BNTX)

Alphabet Slides After Cloud Sales Fall Short of Expectations

Alphabet just reminded investors that even tech giants can trip. The company’s fourth-quarter revenue landed at $96.5 billion—just shy of expectations—but the real disappointment came from Google Cloud. The division pulled in $12 billion, missing forecasts and raising concerns about whether AI-driven cloud growth is slowing down. Investors didn’t take it well. Shares tumbled over 9% in after-hours trading, wiping out much of this year’s gains.

Big AI Bets, Bigger Bills

While cloud struggled, Alphabet is doubling down on AI. The company announced a jaw-dropping $75 billion in capital expenditures for 2025, blowing past Wall Street’s $58 billion estimate. That cash will fund data centers and infrastructure to power AI ambitions, giving a nice boost to chip supplier Broadcom, whose shares popped 6%. But with rivals like OpenAI and DeepSeek proving they can build AI models for far less, Alphabet’s spending spree is raising eyebrows.

Search Still Reigns, But Challenges Mount

Despite the cloud miss, Google’s core business held strong. Search advertising raked in $54 billion, edging past estimates, while YouTube brought in $10.5 billion—helped by a surge in election-year podcast ads. Meanwhile, Waymo and other experimental projects in Alphabet’s “Other Bets” segment fell flat, reporting just $400 million in revenue, well below expectations. Investors are increasingly questioning whether these moonshot ventures are worth the money.

Beyond earnings, Alphabet is facing growing regulatory headaches. U.S. and Chinese regulators are circling, with lawsuits targeting its search dominance and ad practices. At the same time, AI challengers are nipping at Google’s heels, with OpenAI now embedding real-time search capabilities into ChatGPT. For now, Alphabet is stuck balancing massive AI investments, legal fights, and investor jitters. Whether all that spending translates into long-term dominance—or just thinner margins—remains the trillion-dollar question.

Market Movements

• 📉 Tariff Uncertainty Puts the Fed in a Bind: The Federal Reserve faces a dilemma as Trump's tariffs threaten to both raise inflation and slow GDP growth. Economists project tariffs could shave 1.2% off growth while adding 0.7% to core inflation, potentially forcing the Fed to delay rate cuts or pivot later in the year ($SPX).
• 📉 U.S. Job Openings Drop Sharply in December: Job openings fell to 7.6 million, the lowest level since September and below expectations of 8 million. The decline was driven by drops in professional services, education, and finance, though hiring and quit rates held steady. The Fed is watching the labor market closely for signs of cooling ($SPX).
• 🚘 GM Slashes 50% of Cruise Staff After Robotaxi Exit: General Motors is laying off half of Cruise’s workforce following its decision to shut down the robotaxi business. The move comes after GM spent over $10 billion on Cruise, which faced regulatory scrutiny and leadership failures before halting operations ($GM).
• 📱 Apple Launches 'Invites' App to Take on Partiful: Apple introduced a new event-planning app called 'Apple Invites,' allowing users to create and manage RSVPs. The app requires an iCloud subscription, integrating AI features for automated invitations. The move expands Apple’s services strategy amid growing subscription revenue ($AAPL).
• 🚗 Tesla’s Market Share Plummets in Scandinavia: Tesla lost ground in Sweden and Norway, with January registrations dropping 44% and 38% year-over-year despite overall auto sales rising. Public sentiment toward the brand soured following Elon Musk’s political remarks, cutting Tesla’s market share in Sweden to 2.1% and in Norway to 7.4% ($TSLA).
• 📉 Vanguard Slashes Fees, Pressuring Rivals: Vanguard is cutting fees on 87 U.S. funds by an average of 20%, saving investors $350 million this year. The move, its largest-ever fee reduction, ramps up pressure on competitors like BlackRock and Fidelity ($BLK).
• 🕶️ Meta Nears $100 Billion in VR Investments: Meta is set to surpass $100 billion in total spending on VR and smart glasses, allocating another $20 billion to Reality Labs this year. Despite generating $2.1 billion in 2024 revenue, the unit posted a staggering $17.7 billion operating loss. Meta is now shifting its focus toward AI-powered Ray-Ban smart glasses over its metaverse ambitions ($META).
• 💊 Novo Nordisk Faces Investor Scrutiny Over Obesity Drug: Novo Nordisk investors are pressing for more details on CagriSema after disappointing trial results in December erased $125 billion from the company’s market cap. The firm may provide updates during its Q4 earnings call on February 5, with a new study set to begin by June ($NVO).
• 🏈 Super Bowl 59 to Stream for Free on Tubi: Fox is making history by streaming this year’s Super Bowl on its ad-supported platform, Tubi. The move is aimed at expanding Tubi’s audience, which recently reached 97 million monthly users ($FOXA).
• 📈 Deel Eyes IPO After Strong Revenue Growth: HR software firm Deel hit an $800 million annual revenue run rate, up 70% year-over-year, and is preparing for an IPO as early as 2026. The company’s valuation jumped to $12.6 billion after a $300 million secondary share sale, though it remains embroiled in a money laundering lawsuit.
• 🔧 Microsoft Drops VPN Feature from 365: Microsoft is removing the built-in VPN feature from Microsoft 365 on February 28, citing low usage. The decision follows a recent subscription price hike of $3 per month to include AI features ($MSFT).

Echelon Of Earnings From AMD, Chipotle, Snapchat

AMD’s Data Center Miss Overshadows Strong Earnings

AMD delivered a solid earnings beat, but investors were fixated on a shortfall in its data center business. The chipmaker posted $7.66 billion in revenue, surpassing expectations, yet its crucial data center unit fell short, reporting $3.86 billion instead of the projected $4.14 billion. Despite a 69% year-over-year jump in data center sales—driven by AI chip demand—Wall Street wanted more. Shares dropped 5% in extended trading. CEO Lisa Su remains optimistic, forecasting strong double-digit growth in 2025 as AMD scales its AI chip business, but for now, the market isn’t buying in.

Chipotle’s Forecast Sours Otherwise Strong Earnings

Chipotle kept the burritos rolling with solid Q4 earnings, but its outlook left investors with indigestion. The company posted $2.85 billion in revenue, matching estimates, while earnings per share came in slightly ahead. Traffic remained strong, up 4% year over year, and the brand continued outpacing the broader restaurant industry. However, a lukewarm 2025 same-store sales forecast of low- to mid-single-digit growth disappointed Wall Street, leading to a 3% drop in after-hours trading. Chipotle remains bullish on expansion, planning to open up to 345 new locations—most featuring drive-thru “Chipotlanes”—but investors were hoping for a bigger growth story.

Snap Pops on Earnings Beat, But Guidance Disappoints

Snap’s stock jumped after the social media company reported a rare earnings win, with revenue climbing 14% to $1.56 billion and daily active users hitting 453 million—both ahead of expectations. The company even turned a profit, a major turnaround from last year’s loss. However, the celebration was short-lived as Snap’s Q1 guidance underwhelmed, with projected earnings below analyst expectations. The company cited increased investment spending, legal costs, and a seasonal marketing shift as key factors. While its Snapchat subscription service continues to gain traction, adding 2 million subscribers in Q4, Snap still faces regulatory scrutiny and heavy competition from Meta and TikTok.

Trump Signs Order to Create U.S. Sovereign-Wealth Fund

President Trump is making big moves again—this time by signing an executive order to create a U.S. sovereign wealth fund. The goal? Monetize America’s balance sheet, invest in national projects, and, according to Trump, maybe even play a role in securing a deal for TikTok.

At an Oval Office ceremony, Trump framed the fund as a game-changer for U.S. economic strategy, promising it would be “one of the biggest.” Treasury Secretary Scott Bessent backed up the urgency, pledging to “stand this thing up within the next 12 months.”

How Would It Work?

Sovereign wealth funds aren’t new—Norway, China, and Saudi Arabia have been running them for years, leveraging oil profits and trade surpluses to bankroll investments. The U.S., however, has a slight problem: no surplus.

The government’s balance sheet is heavy on real estate and student loans but light on liquid assets, making funding a massive investment vehicle tricky. Trump floated the idea of using tariff revenue to fund the venture—though that assumes the recently delayed tariffs actually go into effect and generate enough cash.

A New Player in Global Markets?

If it gets off the ground, the fund would join a crowded field of government-backed investors influencing everything from infrastructure to AI. Trump’s team has hinted that it could be used to invest in manufacturing, defense, and critical supply chains, with Commerce Secretary nominee Howard Lutnick suggesting the U.S. should get equity stakes in companies it does business with—think vaccine makers and defense contractors.

TikTok’s Wild Card Role

Trump also hinted that the fund could somehow facilitate TikTok’s U.S. future, though the details remain murky. The president has been pushing for an American-owned TikTok spin-off and previously suggested the government itself should take a 50% stake. Whether the fund plays a role in that deal—or if it’s just Trump thinking out loud—remains to be seen.

The executive order gives officials 90 days to draft a plan detailing investment strategies, governance, and legal considerations. But without a clear funding source, it’s unclear how this fund would compete with the trillion-dollar giants already dominating the space.

On The Horizon

Tomorrow

Tomorrow brings another check-up on the labor market with the ADP private payroll report, offering insights into hiring trends nationwide. December saw 122,000 new jobs added—solid, but a step down from November’s 146,000. Economists are cautiously optimistic about January’s numbers, with seasonal hiring expected to lend a boost.

On the earnings front, a packed slate awaits. Uber ($UBER), Arm Holdings ($ARM), MicroStrategy ($MSTR), Qualcomm ($QCOM), GSK ($GSK), Ford ($F), Toyota ($TM), Boston Scientific ($BSX), Allstate ($ALL), The New York Times ($NYT), and Harley Davidson ($HOG) are all set to unveil their latest results.

Before Market Open: 

• Disney’s streaming journey has been a rocky road, but the recent merger of Fubo and Hulu Live TV is a major win. The deal adds over 1.6 million subscribers in one swoop and clears some legal headaches. Now, the focus shifts to keeping customers hooked, turning a profit, and dealing with slowing revenue at its Asian theme parks. Consensus: $1.43 EPS, $24.7 billion in revenue. ($DIS)
• Novo Nordisk recently stumbled with the failure of its new weight-loss drug, CagriSema, a rare setback for the pharma giant. Shares have taken a hit over the past year, but strong sales from current blockbusters like Wegovy and Ozempic could offer a silver lining. For patient investors, this dip might present a chance to buy in at a more attractive valuation. Consensus: $0.85 EPS, $11.34 billion in revenue. ($NVO)