Dow ends lower after topsy-turvy week, as Intel’s outlook weighs on market sentiment

NEW YORK - The Dow Jones Industrial Average finished down on Jan 23, while the S&P 500 ended largely unchanged, as investors’ risk appetite was dimmed at the end of a topsy-turvy week by Intel’s plunge on a downbeat outlook.

All three Wall Street benchmarks had rebounded in the past two sessions following a Jan 20 sharp selloff triggered by US President Donald Trump’s threats to impose tariffs on European allies, an effort to pressure them to accept his claims to Greenland.

On Jan 23, the Dow Jones Industrial Average fell 285.30 points, or 0.58 per cent, to 49,098.71. The S&P 500 edged up 2.26 points, or 0.03 per cent, to 6,915.61, and the Nasdaq Composite gained 65.23 points, or 0.28 per cent, to 23,501.24.

Even the Nasdaq’s Jan 23 gains were not enough to rescue the benchmarks from having a down week, with the S&P 500 off by 0.36 per cent, the Dow lower by 0.53 per cent and the Nasdaq slipping by 0.06 per cent.

Despite the week’s limited pullback, investors appeared to remain confident that while geopolitical-induced volatility is a present danger, the overall state of the American economy continues to be robust.

“When we think about what it means from an investor’s standpoint, we feel pretty good about where we are today,” said Mr Jason Blackwell, chief investment strategist at Focus Partners Wealth.

He noted that volatility was expected this year, given the midterms later in 2026. However, corporate earnings are expected to continue to come in strong, and the economy is going along fine.

“We’re feeling pretty good, but mindful we might have some significant twists and turns throughout the rest of the year,” Mr Blackwell added.

‘Show me’ season

One twist on Jan 23, which weighed on market sentiment, was chipmaker Intel. Its shares sank 17 per cent after the company forecast quarterly revenue and profit below market estimates, saying it struggled to satisfy demand for its server chips used in AI data centres.

With many technology and semiconductor companies still trading at sky-high valuations, 2026 is viewed by many as the year where the huge excitement for the artificial intelligence trend, and the huge amounts of capital expenditure to attain it, need to start showing up as corporate revenue.

Mr Julian McManus, portfolio manager on the Global Alpha Equity team at Janus Henderson, noted how last week’s earnings from TSMC , the world’s main producer of advanced AI chips, could portend well for the latest earnings from the space.

“Going into results, we’re going to be in a ‘show-me’ period, where you have to actually put up the revenue growth to justify the run-up in stocks,” he said. “It’s going to be a period of the haves versus the have-nots, and I personally don’t see Intel being in the haves.”

MAG 7 earnings test

This show-me point will be particularly pertinent for investors next week, with earnings on deck from many of the so-called Magnificent Seven stocks, including Apple, Tesla and Microsoft.

On Jan 23, most of the megacaps rose, with Microsoft, Meta and Amazon up between 1.7 per cent and 3.3 per cent. Nvidia gained 1.5 per cent after Bloomberg News reported Chinese officials have told Alibaba, Tencent and ByteDance they can prepare orders for Nvidia’s H200 AI chips.

Of the S&P sub-sectors, seven ended in positive territory, led by the 0.9 per cent increase in materials.

The energy index rose 0.6 per cent on Jan 23, to its third successive record closing high. It was also the top performing sub-index for the week, while its 10.1 per cent advance so far in 2026 is unmatched.

The number of shares changing hands on US exchanges on Jan 23 was 17.34 billion shares, compared with the 17.07 billion average over the last 20 trading days. REUTERS