US stocks were mixed on Tuesday as gains in large technology companies lifted the broader market, while sharp losses in health insurers weighed heavily on the Dow Jones Industrial Average.
Investors also positioned cautiously ahead of a heavy slate of corporate earnings and the Federal Reserve’s first policy decision of the year, due on Wednesday.
The S&P 500 rose 0.2%, supported by advances in several of its largest constituents.
The Nasdaq Composite outperformed, climbing 0.6% as investors leaned into growth stocks ahead of key earnings reports.
In contrast, the Dow fell 300 points, or 0.6%, dragged down primarily by a steep decline in UnitedHealth shares.
The Dow’s underperformance was driven by sharp losses in health insurance stocks after the Centers for Medicare & Medicaid Services proposed a modest increase in payments to Medicare Advantage insurers.
The agency outlined a net average payment increase of just 0.09% for 2027, a figure that fell well short of industry expectations.
Big Tech supports broader market
Large-cap technology stocks provided a tailwind for equities as traders looked ahead to earnings from some of the sector’s biggest names.
Apple gained 1.9%, while Microsoft advanced 1.6%. The strength in Big Tech helped offset weakness elsewhere in the market.
More than 90 companies in the S&P 500 are scheduled to report quarterly results this week, making it one of the busiest stretches of the earnings season so far.
Meta Platforms, Microsoft and Tesla are all due to report on Wednesday, while Apple will release its results on Thursday.
Investors are closely watching these reports for insights into demand trends, margins and capital spending, particularly related to artificial intelligence.
The positive momentum in technology stocks reflects optimism that earnings from the sector could continue to underpin the broader market, even as other areas face pressure from policy and regulatory developments.
Focus turns to the Federal Reserve
Beyond earnings, investors are closely watching the Federal Reserve, which is set to conclude its first policy meeting of the year on Wednesday.
Despite escalating political pressure from President Donald Trump, the central bank is widely expected to keep interest rates unchanged.
Futures market pricing implies almost no chance of a rate cut at this meeting, according to the CME Group’s FedWatch tool.
Policymakers are weighing a labour market that has shown signs of softening, persistent inflation pressures and an uncertain geopolitical backdrop.
Should the Fed pause as expected, Trump is likely to intensify his criticism of the central bank.
The president has repeatedly argued that interest rates are too high and that restrictive monetary policy puts the U.S. economy at a disadvantage relative to countries with lower borrowing costs.
Trump sharpened his attacks on Federal Reserve Chair Jerome Powell last week while attending the World Economic Forum in Davos, Switzerland.
The president said he had narrowed his shortlist of candidates to succeed Powell “down to maybe one,” fueling speculation that he is preparing to nominate a more dovish successor.
The president has said inflation has been “defeated” and has argued that maintaining an elevated federal funds rate makes it harder for businesses and consumers to borrow.
He has repeatedly called for more aggressive rate cuts, positioning himself in direct opposition to the Fed’s cautious approach.
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