Everything feels a bit upside down lately. If you looked at your portfolio this morning, you probably saw a sea of red, but not the "panic and sell everything" kind of red. It’s more of a slow, rhythmic exhale after a year that frankly defied every law of financial gravity.
The stock market today is grappling with some heavy baggage. The Dow Jones today closed down about 83 points, landing at 49,359.33. That’s a 0.17% slip. It’s a tiny move in the grand scheme of things, but it tells a story of a market that is suddenly very, very tired of guessing what the Federal Reserve is going to do next.
The Dow Jones Today and the "Hassett Head Fake"
Wall Street spent the better part of the week obsessing over who is going to sit in Jerome Powell’s chair come May. For a minute there, everyone was convinced Kevin Hassett was the guy. The logic was simple: Hassett is close to President Trump, and the market figured he’d be the one to slash rates aggressively.
Then, the script flipped.
Reports started swirling that Trump might keep Hassett right where he is as an advisor instead of handing him the Fed gavel. Suddenly, Kevin Warsh is the name on everyone’s lips. The uncertainty hit the bond market like a jolt of electricity. You saw the 10-year Treasury yield climb up to 4.23%, which is the highest we’ve seen since last September.
When yields go up, the Dow usually feels the gravity.
It wasn't a total wash, though. IBM and American Express actually had a decent Friday, gaining over 2% each. But they couldn't carry the whole team. Salesforce and UnitedHealth dragged things down, losing 2.7% and 2.3% respectively. Honestly, it's just one of those days where the big blue-chip names are playing defense.
Why the Stock Market Today is Obsessed with Tariffs
If 2025 was the year of "talking" about tariffs, 2026 is becoming the year of "feeling" them. We’ve seen the S&P 500 jump 16% since the inauguration last year, but that growth has come with some serious whiplash. The average tariff rate is now sitting around 12%, a massive jump from the 2% we were used to for years.
Investors are currently staring at the Supreme Court. There’s a huge case coming up that will decide if the President can keep slapping these duties on imports without a green light from Congress.
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If the court says "no," we might see the biggest relief rally in a decade. If they say "yes," well, get ready for more of what we saw today: volatility and "dip buying" that feels increasingly like a nervous habit.
Sector Winners and Losers
- Regional Banks: PNC Financial was a rare bright spot, hitting a four-year high after crushing their earnings. People are actually spending money and taking out loans again.
- Semiconductors: This group is still the MVP. Between the new U.S.-Taiwan trade deal and Nvidia’s relentless climb, the "chips" are basically keeping the Nasdaq from falling into a black hole.
- Software: This is where the pain is. Companies like Palantir and Workday are getting hammered as investors worry that the AI "hardware" phase is eating the "software" phase's lunch.
What Most People Get Wrong About This Market
There’s this idea that because we’re near 50,000 on the Dow, everything is perfect. It’s not. Under the surface, the "equal-weight" S&P 500 is actually outperforming the standard index. This is actually a good thing. It means the rally isn't just three tech giants in a trench coat pretending to be an economy; it means mid-sized companies are finally joining the party.
But there’s a catch. The labor market is getting weird. We’re seeing "jobless growth" where companies are making more money but hiring fewer people. The San Francisco Fed recently pointed out that job growth has basically flatlined outside of healthcare and education.
Actionable Steps for the Long Weekend
Since the markets are closed this Monday for Martin Luther King Jr. Day, you’ve got a little breathing room. Don't spend it staring at 1-minute charts.
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Watch the PCE Data: Next week, we get the Personal Consumption Expenditures (PCE) report. This is the Fed's favorite "cheat sheet" for inflation. If that number comes in hot, expect the Dow Jones today to look like a bargain compared to where it might be next Friday.
Check Your Tech Weighting: If 80% of your portfolio is in "Magnificent Seven" stocks, you're basically gambling on a single outcome. The trend right now is a rotation into Industrials and Energy. Look at companies that actually make physical things—bulldozers, electrical grids, and copper.
Revisit Your Cash: With the 2-year Treasury yield at 3.60%, sitting on some cash isn't the "trash" move it used to be. It’s dry powder for when the next political headline causes a 3% dip.
The stock market today is a tug-of-war between incredible corporate earnings and a total lack of clarity on government policy. It’s okay to feel a little confused. Even the experts are mostly just watching the prediction markets and hoping for the best.
Stay diversified, keep an eye on the bond yields, and maybe turn off the ticker for the weekend. The 50,000 mark for the Dow is coming, but it’s going to be a bumpy ride getting there.
Next Steps for Investors:
- Review your exposure to software stocks versus semiconductor hardware.
- Monitor the 10-year Treasury yield; if it breaks 4.30%, expect further pressure on the Dow.
- Prepare for a heavy earnings week starting Tuesday, featuring United Airlines and Intel.