January 29th Market Overview

Happy Thursday

Alrighty, I had to do this a bit earlier then usual today… so if anything freaky deaky happens in the last market hour please forgive me.

Gold and Silver really looked like they were going to panic this AM but had a strong bounce and really turned into a nothing burger.

The real story here is money flew out of software names after Microsoft earnings showed little revenue attributed to AI spend. Meta did well because ol’ Zuckerberg showed his AI investments paying off in ad revenue right now.


Let’s dig in...

Today's Big Picture

Software Stocks Enter Bear Market

The IGV software ETF dropped into bear market territory today. ServiceNow fell despite beating earnings. Salesforce is having its worst month since 2008. The fear is "vibe coding"—AI tools that write software—makes traditional subscriptions obsolete faster than anyone expected.

Commodities Are Signaling

Gold hit a record near $5,600 before pulling back hard. Copper hit all-time highs. Oil moved up on reports Trump is weighing strikes on Iran. Gold, copper, and oil all move together, but the fed doesn’t seem concerned about inflation.

Microsoft Gets Punished, Meta Gets Rewarded

Both companies are pouring money into AI infrastructure. Microsoft's stock had its worst day since March 2020 while Meta rose. The difference is simple, Meta can point to ad revenue growth that justifies the spending. Wall Street wants receipts now, not promises.

Market Overview

Index Performance

Stock Spotlight

Microsoft $MSFT ( ▲ 0.39% ) 
had its worst session since March 2020. Azure cloud growth came in lighter than expected while capital spending ran hot. The company also noted that allocating GPU servers to internal R&D rather than Azure hurt the numbers.

Tesla $TSLA ( ▲ 1.02% ) 
confirmed it will end production of the Model S and X. Those lines will make Optimus robots instead. Musk says he'll unveil Optimus 3 in a few months and sees no real competition outside China.

ServiceNow $NOW ( ▲ 3.55% ) 
fell even after beating on earnings and revenue. The market doesn't care about this quarter. It cares about whether AI replaces the subscription model entirely.

Big Name Updates

IBM $IBM ( ▲ 1.27% ) 
moved higher after beating revenue expectations. Management says businesses are finally moving from testing AI to actually paying for it.

Caterpillar $CAT ( ▲ 2.86% ) 
beat earnings thanks to power and energy sales. Tariffs added roughly $800 million to production costs last quarter. They expect that number to grow in 2026.

Meta Platforms $META ( ▼ 0.09% ) 
rose after guiding for Q1 revenue between $53.5 and $56.5 billion, well above estimates. They plan to spend up to $135 billion on AI infrastructure this year. The ad business is covering it..

Other Notable Company News

Honeywell $HON ( ▲ 0.66% ) 
missed revenue estimates during its restructuring. Earnings beat.

Whirlpool $WHR ( ▼ 1.9% ) 
fell after missing on earnings. Management blamed aggressive Black Friday discounting that ran hotter than expected.

Lockheed Martin $LMT ( ▲ 2.53% ) 
signed a framework deal with the Pentagon to quadruple Thaad interceptor production over seven years.

Southwest Airlines $LUV ( ▲ 0.59% ) 
rose after forecasting profits to quadruple this year as assigned seating takes hol

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Sector Watch

Bond Market

The Fed held rates at 3.5%-3.75% yesterday. Two committee members dissented, wanting another cut. Trump called Powell "Too Late" again this morning, arguing U.S. rates should be the lowest in the world. Yields barely moved. Markets still pricing in two cuts by year end.

Policy Watch

Fed

Powell's press conference was a snoozer. He dodged political questions five times with some version of "I have nothing for you on that." His advice for whoever replaces him: "Stay out of elected politics."

Government Shutdown

Shutdown deadline hits Saturday at 12:01 AM ET. Senate voting on funding bills today. Two U.S. citizens killed by immigration agents last week derailed what looked like a done deal.

Geopolitics

Reuters, Al Jazeera, and the New York Times all confirm Trump is weighing military strikes on Iran. The reported options: IRGC leadership, ballistic missile sites, nuclear facilities, and possibly top commanders.

The USS Abraham Lincoln carrier strike group moved into the Middle East this week. Bigger deployment than Venezuela got.

• Citi estimates $3-4/barrel of risk premium priced in currently

• BloombergNEF says oil could hit $91/barrel in Q4 if Iran exports get cut off

• Goldman says Strait of Hormuz closure sends oil to $120+

Market is skeptical because Trump has bluffed before. Traders positioned for "tariffs not bombs." If they're wrong, they're aggressively wrong.

Trade

Trade deficit nearly doubled in November to $56.8 billion. A third of that came from the EU.

What to Watch

Apple Earnings Tonight

Reports after the bell. With Microsoft struggling, the market needs a win here to stabilize tech sentiment. Watch iPhone guidance and services growth. Anything weak accelerates the rotation.

Shutdown Deadline

Senate voting activity today and Friday determines if we get a weekend shutdown. If DHS funding gets split out, we probably avoid it.

Iran Escalation Risk

This is real, not posturing. Multiple sources confirm active military planning. The market has barely priced it in—> only $3-4/barrel of risk premium on oil that's already at 4-6 month highs. Watch for shipping insurance spikes in the Arabian Sea, that's usually the earliest warning.

Bitcoin at a Key Level

Dropped to lowest since early December. Now negative for the year. If risk-off continues, crypto stays vulnerable.

Thanks for reading - you are now the more informed 🙂

- John

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