Wall Street Ends a Downward Week Eyeing Fed Actions and Big Tech Earnings
By Álvaro Estévez, Bolsamania
January 25, 2026
Wall Street concluded a volatile week with mixed results, reflecting investor uncertainty amid geopolitical tensions and anticipation around upcoming Federal Reserve decisions and major technology company earnings. The indices finished Friday with the Dow Jones Industrial Average falling 0.58%, the S&P 500 marginally rising 0.03%, and the Nasdaq gaining 0.28%. However, over the full week, all three showed declines, with the Dow down 0.53%, the S&P 500 off 0.36%, and the Nasdaq slightly lower by 0.06%.
Geopolitical Tensions Fuel Market Volatility
This week’s market fluctuations were heavily influenced by political developments surrounding the U.S. administration’s controversial move regarding Greenland, prompting heightened tensions with the European Union. After U.S. President Donald Trump’s change in stance about his Greenland strategy and related trade tariffs, the markets experienced brief relief rallies. Yet, uncertainty remains as key details of the agreements between the U.S. and NATO remain undisclosed.
Groenland’s Prime Minister Jens-Frederik Nielsen expressed uncertainty over the agreement’s content and stressed that any deal must respect Greenland’s sovereignty. Meanwhile, Denmark’s Prime Minister Mette Frederiksen affirmed that the sovereignty of Greenland was not compromised but declined to comment on Europe’s confidence in U.S. commitments under the Trump administration.
According to Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, “President Trump’s actions have introduced unpredictability that overshadowed brief market rallies. The possibility of sudden and aggressive new tariffs adds significant risk to market stability going forward.”
Corporate Spotlight: Intel’s Sharp Decline
One of the most notable corporate moves this week was Intel’s stock plummeting by 17%, marking its largest single-day drop since August 2024. This decline followed the release of Intel’s latest quarterly earnings. Although the company exceeded expected revenues and adjusted earnings per share (EPS) of $0.15 (beating estimates), its future outlook disappointed investors.
Intel forecasted first-quarter revenues between $11.7 billion and $12.7 billion and an adjusted EPS of zero, falling short of analyst expectations that predicted $0.05 EPS and sales of $12.51 billion. CFO David Zinsner indicated that Intel expects its product availability to be at its lowest in Q1 before recovering in the following quarter. Despite solid demand fundamentals driven by rapid artificial intelligence (AI) adoption reinforcing the relevance of Intel’s x86 architecture, uncertainty remains about when the AI investment wave will fully benefit the company.
AI and Semiconductor Sector: A Mixed Picture
Adding to the AI-driven semiconductor narrative, NVIDIA shares gained ground after China allowed major tech firms like Alibaba, Tencent, and ByteDance to begin ordering NVIDIA’s new AI chips, the H200. CEO Jensen Huang warned at the Davos forum that widespread AI adoption will require trillions in new investments, underscoring the sector’s growth potential.
This environment has favored "boring technology" manufacturers — specifically memory chip producers such as SanDisk, Western Digital, and Micron — whose share prices have skyrocketed amid a global memory chip shortage and soaring prices caused by AI infrastructure demand. Ozkardeskaya notes that this sector may be experiencing a structural shift, with valuations reaching potentially bubble-like extremes. She cautions that a correction could be imminent given the historically cyclical nature of memory chip markets and current high price levels.
Macroeconomic Context and Fed Outlook
The U.S. economy showed resilience, with GDP growth revised slightly upward to 4.4% for Q3 2025, outperforming preliminary estimates and the previous quarter’s 3.8% growth. However, inflationary pressures persist, as the Fed’s preferred inflation measure, the PCE price index, rose to 2.8%, matching both headline and core inflation expectations.
These data points suggest the Federal Reserve is unlikely to cut interest rates in the near future. The CME FedWatch tool indicates only a 15% chance of a rate reduction in March, and markets currently price in two rate cuts over the course of the year. Analysts warn that ongoing political pressure from the Trump administration could influence the Fed’s pace, potentially prompting a more cautious approach to monetary easing.
Friday also saw positive momentum in business activity indicators, with S&P Global’s composite, manufacturing, and services Purchasing Managers’ Indices (PMIs) signaling sustained growth into January, alongside improving consumer sentiment.
As Wall Street braces for major tech earnings reports in the coming weeks and monitors Federal Reserve signals, investors remain cautious amidst geopolitical complexities and mixed economic signals. The interplay of these factors will likely continue shaping market dynamics in the near term.