On Tuesday, the S&P 500 closed at an all-time high.
The Nasdaq climbed nearly 1%. Tech stocks were flying.
And the Dow Jones? It dropped over 400 points.

Same market. Same day. Completely opposite stories.

The culprit: UnitedHealth, which crashed almost 20% after the Trump administration proposed keeping Medicare Advantage payment rates essentially flat for 2027.

We're talking a 0.09% increase. Wall Street was expecting 4-6%.

Dr. Mehmet Oz (yes, that Dr. Oz) now runs CMS and signed off on this proposal.

The agency is also targeting "upcoding," where insurers pull extra diagnoses from patient charts to inflate their reimbursement.

Translation: Washington wants to stop paying for risk that doesn't exist.

Here's the thing about the Dow: it's price-weighted, not market-cap-weighted like the S&P 500.

That means a stock's influence on the index depends on its share price, not how big the company actually is.

UnitedHealth was the highest-priced stock in the Dow. So when it cratered, it dragged the entire index down by itself — roughly 330 points worth.

Meanwhile, the S&P 500 barely flinched because UnitedHealth's market cap is only a fraction of the mega-cap tech names that dominate that index.

One stock. One outdated index methodology. One very confusing headline.

The Medicare rate news landed on the same day UnitedHealth reported Q4 earnings.

The company also guided for its first revenue decline since 1989 as it sheds unprofitable Medicare and ACA members.

Medical costs are still running hot at around 10%, and the proposed rates don't cover that gap.

Historically, insurers have lobbied CMS to bump rates between the January proposal and the April final rule. Last year, they got a 3-point increase after industry pressure.

But with Dr. Oz running the show and "efficiency" as the new mandate…

…this time might actually be different.

Energy stocks — have you heard what’s happening in 2026?
It’s outstanding. And one top technician thinks there's more to come.

What is Nancy Pelosi buying now? $50 million here. $10.5 million there.
Some long-dated call options on the same megacaps she just trimmed.

A small-cap telecom under Spectral Capital just hit its revenue target way ahead of schedule. Where is the company headed now?

On the same day the S&P 500 closed at an all-time high, American consumers reported feeling the worst they've felt about the economy in over a decade.

The Conference Board's consumer confidence index dropped 7 points in January to 84.5. The lowest reading since 2014.

The expectations index, which tracks how people feel about the near-term outlook for jobs and business conditions, fell even harder: down 9.5 points to 65.1.

That number matters. Readings below 80 on the expectations index typically flash a recession warning.

Inflation is back in the conversation. Respondents flagged rising prices on gas and groceries as top concerns.

Mentions of tariffs and trade policy also ticked up, along with references to healthcare costs and general political uncertainty.

And they're pulling back. Plans for big-ticket purchases weakened, and so did spending intentions on services over the next six months.

This is happening while the stock market keeps climbing, tech earnings are rolling in strong, and the Fed is expected to hold rates steady.

The contrast jumps out at you.

Consumer spending drives roughly 2/3 of US GDP.
When people get nervous, they stop buying.
And when they stop buying, corporate earnings eventually feel it.

For now, markets are shrugging it off. Tech is flying. AI optimism is high.
Risk appetite, according to Goldman Sachs, is at its highest level since 2021.

But confidence data tends to lead. It doesn't predict crashes, but it does signal when the mood is shifting underneath the surface.

The S&P 500 might be partying at record highs.

But consumers? They're already looking for the exit.

This week, Microsoft and Meta report earnings.

For the first time, the question isn't "how much are you spending on AI?"

It's "what are you getting for it?"

The numbers are staggering.

$383 billion is the capital spending from Meta, Alphabet, Amazon, Apple, and Microsoft in 2025.

Analysts expect that figure to jump another $100 billion this year, pushing total AI-related investment close to $500 billion.

That's a lot of data centers. A lot of chips. A lot of faith.

Here's the uncomfortable part.

Over half of the 4,454 CEOs surveyed by PwC said they've seen no revenue gains and no cost savings from their AI investments. None.

At Davos, Microsoft CEO Satya Nadella acknowledged that avoiding a bubble "by definition" requires benefits to be more evenly distributed.

Translation: right now, they're not.

And yet the spending keeps accelerating.

Bridgewater's co-CIOs laid it out plainly: "game-theoretic" forces are driving this.

If your competitor is pouring billions into AI infrastructure and you're not, you risk falling behind permanently.

Even if short-term returns are unclear, sitting out isn't an option.

So everyone keeps spending.

Not because they know it'll pay off, but because they can't afford to find out what happens if they don't.

Options markets are pricing in a 6% move for Meta, up or down.

Investors want to see if Azure's cloud growth can justify Microsoft's record capex. And everyone's watching 2026 spending guidance.

Also on deck: ASML, the Dutch company whose lithography machines are the bottleneck for producing advanced AI chips.

If ASML's outlook wobbles, so does the entire AI supply chain.

The AI trade has been running on momentum and promises.

This week, it runs into earnings.

Source: Stock Analysis