Big Tech rises on earnings hopes, but value stocks see sentiment sour [New York Market Briefing]

Major indexes on Wall Street finished mixed. Big Tech shares rose on optimism ahead of earnings releases, but investor sentiment toward traditional large-cap stocks deteriorated sharply, led by insurers.

On the 27th (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 408.99 points (0.83%) from the previous session to close at 49,003.41. By contrast, the S&P 500 gained 28.37 points (0.41%) to 6,978.60, and the Nasdaq Composite added 215.74 points (0.91%) to end at 23,817.10.

A rout in insurance stocks dragged the Dow lower. The Dow Jones U.S. Health Care Index (DJ US Health Care) tumbled 11.03% on the day. The move came after the Donald Trump administration effectively pegged the increase in reimbursement rates for Medicare programs offered by private insurers at 0.09%. The market had been expecting an increase of around 4-6%.

Shares of UnitedHealth, the largest private insurer in the U.S., plunged 19.61%. Humana (-21.13%) and CVS Health (-14.15%) also sold off sharply. As insurance shares sank, investor sentiment deteriorated across most Dow components other than tech.

Big Tech, meanwhile, rose ahead of earnings. Among mega-cap tech companies with market capitalizations above $1 trillion, all advanced except Tesla.

Microsoft, Amazon and Broadcom posted gains in the 2% range, while Nvidia and Apple rose more than 1%. The Philadelphia Semiconductor Index also climbed 2.40%.

General Motors (GM) surged 8.75% after its fourth-quarter results topped market expectations. Investor sentiment was also likely supported by President Donald Trump’s comment that he would raise tariffs on South Korean-made cars back to 25%.

U.S. aircraft maker Boeing fell 1.56% despite reporting strong fourth-quarter results.

By sector, health care fell 1.66% and financials slipped 0.74%, while all other sectors rose.

Utilities and technology gained more than 1%.

According to the CME FedWatch tool, the federal funds futures market priced in a 97.2% probability that rates will be left unchanged in January.

The Cboe Volatility Index (VIX) rose 0.20 point (1.24%) from the previous session to 16.35.

Han Kyung-woo, Hankyung.com reporter case@hankyung.com