​EBC Markets Briefing | Wall St sharply lower; 3M missed estimates

All three major Wall Street indexes ended Tuesday with their biggest one-day drops in three months. The ‍CBOE Volatility Index spiked to 20.09 points, its highest close since November 24.

Earnings season is also kicking into higher gear, with the gap between the Magnificent Seven and the rest of US stocks is narrowing. Those tech companies are in the crosshairs of EU retaliation.

Profits for the Magnificent Seven are expected to climb about 18% in 2026, the slowest pace since 2022, compared to the 13% rise projected for the other firms in the S&P 500, according to Bloomberg Intelligence.

The US economy this year will get a boost from tax cuts, real wage gains and rising wealth, while inflation will moderate, economists at Goldman Sachs said earlier this month.

Similarly, the IMF estimated the growth for 2026 at 2.4%, due in part to a big push from massive investment in AI infrastructure including data centres, powerful chips and power.

US factory production unexpectedly increased in December amid a surge in primary metals output, but activity contracted in Q4 against the backdrop of challenges from import tariffs.

The Nasdaq 100 breached both 50 SMA and upward trendline, but bottomed out around 25,00. If it remains above the psychological level, the rally may have more room to run.

Asset recap

As of market close on 20 January, among EBC products, US natural gas still led gains. A big winter storm is forecast to sweep across the southern Rockies, the Plains and the South by Friday.

‍3M forecast annual profit slightly below Wall Street's expectation, pointing ‍to a challenging ‍and uneven demand ‍backdrop, even as it tightens costs to shield margins.

European shares touched their lowest in nearly two weeks, as mounting unease over Trump's tariff threat over Greenland hurt optimism from earlier in the month.

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