U.S. stock markets closed mixed on Wednesday as sector rotation by market participants continued. Investors remained concerned about the significantly overstretched valuation of technology stocks, especially artificial intelligence (AI)-centric stocks. Growth-oriented S&P 500 and Nasdaq Composite ended in negative territory, while the value-oriented Dow finished in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.5% or 260.31 points to close at 49,501.30. Notably, 23 components of the 30-stock index ended in positive territory and seven in negative territory. The tech-heavy Nasdaq Composite finished at 22,904.58, sliding 1.5% or 350.61 points on the weak performance of AI-powered semiconductor bigwigs.
The S&P 500 fell 0.5% to finish at 6,882.72. Six out of the11 broad-sectors of the broad-market index ended in negative territory while five ended in positive territory. The Technology Select Sector SPDR (XLK), the Communication Select Sector SPDR (XLC) and the Health Care Select Sector SPDR (XLV) tumbled 2.2%, 1.6% and 1%, respectively.
On the other hand, the Energy Select Sector SPDR (XLE), the Materials Select Sector SPDR (XLB), the Consumer Staples Select Sector SPDR (XLP) and the Utilities Select Sector SPDR (XLU) advanced 3.2%, 2.1%, 1.6% and 1.5%, respectively.
The fear gauge, the CBOE Volatility Index (VIX) was up 3.6% to 18.64. A total of 24.60 billion shares were traded on Wednesday, higher than the last 20-session average of 19.90 billion. The S&P 500 recorded 93 new 52-week highs and 23 new 52-week lows. The Nasdaq Composite registered 218 new 52-week highs and 318 new 52-week lows.
Sector Churn Continues
Advanced Micro Devices Inc. AMD reported fourth-quarter 2025 non-GAAP earnings of $1.53 per share, which beat the Zacks Consensus Estimate of $1.32 per share. The figure jumped 40.4% year over year and 27.5% sequentially. Revenues of $10.27 billion beat the Zacks Consensus Estimate by 6.24%. The topline increased 34.1% year over year and 11.1% sequentially.
Management expects first-quarter 2026 revenues of $9.8 billion (+/-$300 million). At the mid-point of the revenue range, this represents year-over-year growth of approximately 32% and a sequential decline of approximately 5%.
However, investors’ expectations were sky-high buoyed by the company’s innovative AI chip portfolio. As a result, the stock price plummeted 17.3%. Advanced Micro Devices currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amgen Inc. AMGN reported fourth-quarter 2025 adjusted earnings of $5.29 per share, which beat the Zacks Consensus Estimate of $4.76 per share. Earnings were relatively flat year over year as higher revenues were partially offset by higher operating costs. Total revenues of $9.9 billion beat the Zacks Consensus Estimate of $9.5 billion. Total revenues rose 9% year over year. The stock price jumped 8.2% after the result. Amgen currently carries a Zacks Rank #3 (Hold).
Economic Data
Payrolls processing firm Automatic Data Processing Inc. ADP reported that private payrolls increased by 22,000 in January, following a downwardly revised 35,000 jobs in December. The consensus estimate was 45,000. Wage rate for those staying in their existing jobs increased 4.5% year-over-year in January.
Institute of Supply Management (ISM) reported that service sector PMI (purchasing managers’ index) came in at 53.8%, marginally below the consensus estimate of 54%. December’s metric was revised downward to 53.8% from 54.4% reported earlier. Any reading above 50% indicates an expansion in service activities.
The U.S. Energy Information Administration (EIA) reported that for the week ended Jan. 30, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.5 million barrels from the previous week.
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Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report Amgen Inc. (AMGN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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