On Wednesday, a notable surge in the U.S. stock market reflected an improved investor outlook, primarily driven by President Donald Trump's unexpected retraction of new tariff threats against the European Union. Despite this positive movement, the CNN Money Fear and Greed Index indicated that overall market sentiment remained in a 'Neutral' state. Key corporate announcements and mixed economic data also contributed to the day's financial landscape.
S&P 500 Rises Amidst Shifting Trade Policy and Corporate Announcements
On a significant Wednesday, January 22, 2026, the S&P 500 index experienced a robust increase of over 1%, closing at 6,875.62. This positive shift was largely attributed to a crucial development in international trade: President Donald Trump's announcement that planned tariffs on European Union countries would not be implemented. This decision followed what he described as a "very productive" meeting with NATO Secretary General Mark Rutte, significantly easing trade tensions.
Adding to the day's financial narratives, Johnson & Johnson (NYSE: JNJ) revealed fourth-quarter earnings that surpassed market expectations, contributing positively to investor confidence. Conversely, Netflix Inc. (NASDAQ: NFLX) shares saw a decline of approximately 2% after the company's fourth-quarter financial results and first-quarter guidance fell below analysts' estimates. Intel Corp (NASDAQ: INTC), Abbott Laboratories (NYSE: ABT), and Procter & Gamble Co (NYSE: PG) were also closely watched as investors anticipated their upcoming earnings reports.
Economic indicators presented a mixed picture. U.S. pending home sales for December unexpectedly dropped by 9.3% month-over-month, starkly contrasting November's 3.3% gain and market predictions of a minor 0.3% decline. However, U.S. construction spending showed resilience, rising by 0.5% in October, following a 0.6% increase in September and exceeding market forecasts of a 0.1% gain.
Across the S&P 500, all sectors closed positively, with energy, materials, and healthcare stocks leading the charge in gains. The Dow Jones Industrial Average also climbed by roughly 589 points, reaching 49,077.23, while the Nasdaq Composite advanced by 1.18% to 23,224.82.
The CNN Money Fear and Greed Index, a key measure of market sentiment, registered a reading of 50.4, staying within the "Neutral" zone, a slight improvement from its prior reading of 46.4. This index, calculated from seven equally weighted indicators, gauges market emotions, with higher fear typically correlating with lower stock prices and vice versa.
This day underscores the profound impact of geopolitical decisions on financial markets and the ongoing dance between corporate performance and macroeconomic trends. The sudden shift in tariff policy provided a much-needed boost to investor spirits, temporarily overshadowing some mixed economic data and individual company results.
The market's immediate positive reaction to the withdrawal of tariff threats highlights the sensitivity of global trade policies on investor confidence. It serves as a potent reminder that while fundamental economic data and corporate earnings are crucial, geopolitical developments can swiftly alter market trajectories. This event should prompt investors to consider the broader geopolitical landscape in their strategic planning, emphasizing the need for agility and a diversified approach in an interconnected global economy. Furthermore, the persistent 'Neutral' reading of the Fear and Greed Index, despite significant market movement, suggests underlying caution remains, indicating that while optimism can be sparked, deep-seated concerns may still linger. This provides an opportunity for introspection into the factors that truly drive sustained market confidence beyond momentary uplifts.