US sharemarkets were mixed on Tuesday, with the S&P 500 setting a fresh record and the Nasdaq posting strong gains, while the Dow Jones Industrial Average fell sharply. The S&P 500 rose 0.41 per cent to close at 6,978.60, after touching an even higher intraday peak. The Nasdaq Composite climbed 0.91 per cent to 23,817.10, driven by renewed strength in large technology stocks.
By contrast, the Dow fell 409 points, or 0.83 per cent, to 49,003.41, weighed down by heavy selling in health care. Information technology was the strongest-performing sector on the S&P 500, while health care was the weakest.
Big Tech in focus ahead of earnings
Gains in major technology names underpinned the broader market. Apple added more than 1 per cent, while Microsoft rose more than 2 per cent. Investor attention is firmly on upcoming earnings, with more than 90 S&P 500 companies due to report by the end of the week.
Results from Meta Platforms, Microsoft and Tesla are scheduled for Wednesday US time, followed by Apple on Thursday US time. The reporting season is being closely watched for signals on spending and revenue tied to artificial intelligence, after concerns late last year that valuations in the sector had become stretched.
Health insurers tumble on policy changes
Health care stocks were the clear laggards. Shares of UnitedHealth plunged nearly 20 per cent, dragging the Dow lower, after the Trump administration proposed holding Medicare Advantage payment rates effectively flat. UnitedHealth also forecast that revenue in 2026 will fall for the first time in more than three decades, according to Bloomberg.
Other insurers were hit hard. Humana dropped 21 per cent and CVS Health lost 14 per cent following the proposed changes.
Federal Reserve decision looms
Markets are also looking ahead to the US Federal Reserve’s first policy decision of the year. Policymakers began their January meeting overnight, with the statement due at 6am AEDT on Thursday, followed by a press conference from Chair Jerome Powell. The Fed is widely expected to keep interest rates unchanged, but investors will be alert to any guidance on the timing of future rate cuts.
Australian market outlook
Australian shares are set to open higher, with ASX 200 futures up 38 points, or 0.4 per cent, to 8,937, extending Tuesday’s rally.
The Australian dollar has continued to strengthen as the US dollar weakens, putting the US70¢ level within reach. Quarterly results are due on Wednesday from Woodside Energy, Ampol and Boss Energy, while global attention remains on a heavy slate of US tech earnings later in the week.
