Honestly, it’s been a wild morning for anyone watching their 401(k) or brokerage app. If you’ve been tracking what is the s&p 500 doing today, January 12, 2026, you likely saw the index hit another record close, landing at 6,977.27. That is its third record high just in the first two weeks of the year.
It didn't start pretty. The market opened deep in the red.
Why? Because the Justice Department just opened a criminal investigation into Federal Reserve Chair Jerome Powell. That sent a shockwave through the financial sector. At one point, the S&P 500 was down nearly 1% as traders panicked about Fed independence and the potential for a "10% cap" on credit card interest rates—a policy move being floated by the administration that has banks like JPMorgan and American Express sweating.
But then, tech saved the day. Specifically, Alphabet (the parent company of Google).
What is the S&P 500 Doing and Why is it Rebounding?
The index managed to claw back those early losses to finish up 0.16%. It’s a slim margin, sure, but in the world of the S&P 500, a win is a win, especially when it results in a new all-time high.
The heavy lifting came from a massive rally in Alphabet shares. The company finally crossed the $4 trillion market cap milestone today. That is a mind-boggling amount of money. To put it in perspective, that’s larger than the entire GDP of many developed nations.
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Investors are piling into Alphabet because of three major deals that went public today:
- Apple and Siri: Apple officially chose Alphabet’s Gemini AI models to power the next generation of Siri.
- The Walmart Partnership: Alphabet’s Wing subsidiary is massively expanding drone deliveries for Walmart.
- AI Shopping: New integrations with Wayfair and Shopify mean Gemini is basically becoming a personal AI shopping assistant.
While tech is soaring, the rest of the market looks a bit more "kinda messy." While the S&P 500 is up, the "Magnificent Seven" dominance is starting to face some real-world friction. Financial stocks took a beating today due to the Powell probe. When the head of the Fed is under investigation, the people who lend money get nervous.
The Real Story Behind the Numbers
You’ve probably heard people say the market is "overvalued." They might be right. The S&P 500 is currently trading at a forward price-to-earnings (P/E) ratio of about 22x. That’s high. It's essentially the same peak we saw in 2021, and we're getting uncomfortably close to the 24x levels seen right before the dot-com bubble burst in 2000.
But here’s the thing: earnings are actually showing up. Goldman Sachs is forecasting a 12% total return for the S&P 500 for the full year of 2026. They’re betting on "healthy economic growth" and a productivity boost from AI that isn't just hype anymore—it’s actually starting to show up in the bottom line of these companies.
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However, there is a weird "divergence" happening. The unemployment rate actually dropped to 4.4% in December, which sounds great. But the U.S. only added 50,000 jobs. That’s the slowest pace of hiring we’ve seen outside of a recession in over 20 years.
What Most People Get Wrong About the S&P 500 Right Now
Most people think a rising S&P 500 means the whole economy is healthy. It doesn't.
Right now, we are seeing a "winner-takes-all" dynamic. While Alphabet is hitting $4 trillion, companies like General Motors are taking $6 billion hits on their EV businesses. We’re also seeing a huge rotation into "Real Assets." Because of the volatility around the Fed, gold just hit a record high of $4,640 an ounce. Silver is up nearly 8% today alone.
If you're wondering what is the s&p 500 doing in terms of your specific portfolio, you have to look at the concentration. The index is more top-heavy than it has ever been.
The Policy Factor: OBBBA and Tariffs
We can't talk about the market in 2026 without mentioning the "One Big Beautiful Bill Act" (OBBBA). This massive fiscal stimulus is currently pumping a lot of "hot" money into the system. While it's keeping the S&P 500 afloat, it's also making inflation "sticky."
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There’s also the looming threat of tariff-related bonus checks. If the administration decides to send out "tariff rebates" to voters, we could see another spike in consumer spending, which would likely push the S&P 500 higher but force the Fed to keep interest rates higher for longer. It’s a tug-of-war.
Actionable Steps for Your Portfolio
If you’re looking at these record highs and wondering if you should jump in or run for the hills, here is what the experts are actually doing:
Rebalance into "Value": The gap between high-priced tech and "boring" value stocks is massive. Strategists at Morgan Stanley are suggesting that 2026 might finally be the year that value stocks (like utilities and healthcare) catch up as the AI hype cycle stabilizes.
Watch the $4.20% Treasury Yield: The 10-year Treasury yield is hovering around 4.19% today. If it breaks above 4.35%, it could start to suck money out of the stock market and into "safer" bonds. Keep a close eye on that number.
Check Your Tech Concentration: If you own an S&P 500 index fund, you are essentially an Alphabet and Nvidia investor. Make sure you’re okay with that. If not, consider an "equal-weighted" S&P 500 fund (ticker: RSP) which gives every company the same weight, regardless of size.
Ignore the Daily Noise, Watch the Trend: Today’s DOJ probe into Jerome Powell is dramatic, but the market's ability to "shake it off" and finish at a record high suggests that the underlying momentum is still bullish. The trend is your friend until it isn't.
The S&P 500 is currently up about 1.9% for the year-to-date. It's a strong start, but with geopolitical tensions in places like Venezuela and Greenland—and a Fed chair in the crosshairs of a criminal probe—the "record high" headline doesn't tell the whole story.
Start by auditing your current holdings to see how much of your wealth is tied to the top five tech companies. If it's more than 25%, you might want to look at diversifying into mid-cap stocks or international markets, where valuations are significantly lower than the S&P 500's current 22x multiple.