S&P 500 edges to record as earnings disappoint and dollar weakens

Wall Street reached a new all-time high on Tuesday despite mixed corporate earnings and a sliding U.S. dollar that hit its lowest point since 2022, reflecting divergent signals about the economic outlook. The S&P 500 rose 0.4% to 6,978.60, edging past its previous record set weeks earlier, while the Dow Jones Industrial Average fell 0.8% and the Nasdaq composite climbed 0.9%.

The record came as major companies delivered disappointing financial guidance, investors retreated from U.S. assets due to tariff concerns, and consumer confidence fell to its lowest level since 2014—a combination that highlights the disconnect between record stock prices and underlying economic weakness.

Wall Street’s record march continued Tuesday despite gathering clouds over the economic outlook, with the S&P 500 edging to an all-time high as corporate earnings proved mixed and a selling wave hit the U.S. dollar.

The broad market index rose 0.4% to 6,978.60, surpassing its previous record set weeks earlier, according to market data. The Nasdaq composite climbed 0.9% to 23,817.1, bolstered by gains in major technology stocks. The Dow Jones Industrial Average, however, fell 408 points or 0.8%, reflecting weakness among industrials and financial companies.

The market’s internal divisions mirrored broader tensions in the economy. While record equity prices typically signal confidence, multiple signals suggested investor unease about the underlying economic foundation. The U.S. dollar weakened sharply, sliding more than 1% against the euro, Japanese yen, and Australian dollar as investors retreated from dollar-denominated assets. An index measuring the dollar’s strength against its peers sank to its lowest level since 2022, a shift analysts attributed partly to tariff threats and concerns about the government’s heavy debt load.

President Donald Trump’s threatened tariffs against European countries opposed to his taking control of Greenland have accelerated the retreat from U.S. assets—a move market participants have labeled “Sell America.”

Winners and Losers in Mixed Earnings Season

Corning led the market higher, climbing 15.6% after announcing a deal with Meta Platforms worth up to $6 billion to supply optical fiber and cable for data center buildouts. The company said it would expand its optical-fiber manufacturing facility in Hickory, North Carolina.

General Motors rose 8.7% and HCA Healthcare rallied 7.1% after both delivered fourth-quarter profits exceeding Wall Street’s expectations. Each company approved billions of dollars in stock buyback programs, a common use of cash when company leadership lacks expansion opportunities.

UnitedHealth Group sank 19.6%, however, despite posting a profit that slightly beat analyst expectations. The decline reflected investor focus on the company’s weaker-than-expected revenue guidance for 2026, which is projected to fall short of 2025 levels.

Healthcare stocks broadly faced pressure from a projected Medicare Advantage rate increase from the U.S. government that fell well short of what investors had anticipated. Humana skidded 21.1%, Elevance Health dropped 14.3%, and CVS Health sank 14.2%.

UPS added 0.2% after reporting stronger profits and forecasting 2026 revenue that beat expectations, though the gain came alongside an announcement of 30,000 job eliminations. American Airlines fell 7% after fourth-quarter earnings that failed to meet analyst expectations.

Among the tech giants, Microsoft rose 2.2% and Apple climbed 1.1%, with Meta Platforms, Microsoft, and Tesla scheduled to report earnings on Wednesday and Apple on Thursday.

The Valuation Question

The pressure on companies to demonstrate strong profit growth is intensifying as stock prices hit consecutive records. Over the long term, stock prices tend to follow the path of corporate profits, and earnings must rise to quiet mounting criticism that equities have become expensive relative to fundamentals.

One way stock prices can appear less expensive to investors is through falling interest rates, though the Federal Reserve faces a difficult balancing act. The central bank is scheduled to announce its next interest rate decision Wednesday, with market expectations centered on holding rates steady for now. Inflation remains stubbornly above the Fed’s 2% target, and additional rate cuts could exacerbate consumer price pressures even as they provide economic stimulus.

The yield on the 10-year Treasury rose to 4.24% from 4.22% the previous evening, little changed ahead of the Fed announcement. Market participants expect the central bank to resume rate cuts later in 2026 as inflation moderates.

Consumer Confidence Weakens

A growing economic concern surfaced Tuesday when the Conference Board reported that consumer confidence dropped to its lowest level since 2014—a decline steeper than what occurred during the COVID-19 pandemic. The reading surprised economists who had expected a slight improvement.

This divergence between record-high stock prices and deteriorating consumer sentiment underscores the gap between financial markets and the lived experience of everyday Americans, particularly those outside investor classes.

Global Markets and Trade Developments

Indexes across Europe and Asia posted gains despite the broader uncertainty. India’s Sensex added 0.4% after Prime Minister Narendra Modi announced that India had reached agreement on a free trade deal with the European Union. The accord, which touches 2 billion people, culminated nearly two decades of negotiations and stands as one of the largest bilateral commerce engagements in recent years. The timing comes as the Trump administration targets both India and the European Union with steep import tariffs.

South Korea’s Kospi jumped 2.7%, and Hong Kong’s Hang Seng rallied 1.4%, among the world’s larger single-day gains.