Daily Wrap-Up: Tumultuous Tuesday | January 25, 2022

After Monday’s stunning reversal from the low and the market’s willingness to give some back during premarket trading, investors entered the regular session confused at best. While on the one hand, it is tempting to “buy the dip”, the previous day’s lows in many issues seemed too far away for potential long-entries.

Early in the session, the S&P 500 index futures smashed through the premarket low (4319) and bids were scarce. The index eventually found support well ahead of Monday’s low (4212.75), only reaching 4276.50 and the rally was on. The last leg of the intraday rally from 2:00 PM to 3:00 PM that approached the premarket high perhaps resulted from the announcement from President Biden that the US had no desire to place US military troops in Ukraine.

The final hour of the session was ugly. With many major earnings reports looming after the close and over the next few days, some investors did not want to wait around for the outcomes. As a result, the index shed 60 handles and had a slight bump on the close. For the session, the index declined 53.75 handles to close at 4349.

It should be noted that the Street did not take a liking to Microsoft Inc.’s (NASDAQ: MSFT) Q4 report and the index got crushed, falling another 42.75 handles to end the after-hours session at 4306.25. That adds further significance to the importance of the close for Wednesday’s premarket trading.

By far the biggest winner of the top components was Johnson & Johnson (NYSE: JNJ) following a Q4 beat. For the session, the issue added $4.63 or 2.86% to close at $167.63.

That was a polar opposite to the cash index’s decline of 1.22%.

Nvidia Corp (NASDAQ: NVDA) was the biggest loser of the top components. The issue was lower for the sixth session in a row declining $10.48 or 4.5% to close at $223.24. The fallout from the Microsoft report had the issue trading much lower at $216 as of 5:20 PM EST.