Investopedia Markets News (all except PF)

The Nasdaq opened near a record high on Wednesday ahead of earnings reports form Microsoft and Meta.

BING FUNG / Getty Images

Key Takeaways

• The Nasdaq Composite approached a fresh record high Wednesday as semiconductor stocks rallied following strong results from chip manufacturing equipment supplier ASML Holdings.
• The Nasdaq last closed at a record in late October, right before Big Tech earnings reports fueled debate on Wall Street about an AI bubble.
• Investors will be hoping to see evidence that massive AI investments are paying off when Microsoft and Meta report results after the bell Wednesday.

The Nasdaq Composite came within a hair’s breadth of a new high on Wednesday when several earnings reports suggested the AI infrastructure boom isn’t slowing down anytime soon—and with several more big ones right around the corner.

The Nasdaq jumped 0.7% at the open to trade at 23,986, its highest price since early November. (The index was about flat in recent trading.) Its last record closing high—23,958.47—came on Oct. 29, right before earnings reports from tech giants amplified the debate on Wall Street about an AI bubble, dragging on tech stocks. 

Why are we back here? Because this year, investors have put those concerns aside to focus on the booming businesses of the companies supplying the technology that enables AI.

Why This Is Important

The AI rally lifted the major indexes to a series of record highs last year before concerns about overspending on AI infrastructure dragged on tech stocks in the final months of the year. The Nasdaq has almost recovered from those losses, but earnings reports on Wednesday evening could revive AI bubble worries.

A shortage of memory and data storage technology has boosted the earnings and shares of chip makers like Micron (MU) and storage device makers like Sandisk (SNDK) and Western Digital (WDC). That shortage—plus seemingly insatiable demand for advanced semiconductors—has also lifted the stocks of chip manufacturing equipment suppliers like Lam Research (LRCX) and Applied Materials (AMAT). 

Chip stocks were buoyed earlier this month when Taiwan Semiconductor Manufacturing (TSM), the world’s largest contract chip manufacturer, reported record quarterly revenue and earnings and said it was dramatically increasing its infrastructure investments to meet booming demand. The rally gained momentum Wednesday after ASML Holdings (ASML), a supplier of chipmaking equipment, reported record quarterly orders as customers like TSMC ramped up their investments. 

It isn’t just chipmakers that are reaping the benefits of the AI boom. Shares of Corning (GLW) soared 16% on Tuesday after the specialty glass maker struck a $6 billion deal to supply Meta (META) with fiber optic technology for its data centers. 

A few of Wednesday’s earnings reports hint at one of the biggest risks facing the AI rally this earnings season: high expectations.

Shares of GE Vernova (GEV) swung between gains and losses on Wednesday despite the energy tech company raising its 2026 and 2028 sales outlooks following a surge in orders last quarter. Amphenol (APH) was the worst-performing stock in the S&P 500 even though the supplier of data center technology easily topped estimates with its results and guidance. Both stocks were flying high into Wednesday’s session, with Amphenol stock up 140% in the past year and GE Vernova rising more than 90%. 

The AI rally’s next big test will come tonight. Microsoft and Meta report quarterly results after the bell, and both companies said in their October earnings reports that they planned to significantly increase their AI infrastructure investments this year. Investors will be eyeing capital expenditures for confirmation of that. Most vital to the AI trade, however, may be whether Big Tech can convince investors their data center spending is paying off.

The latest layoffs come after Amazon cut 14,000 roles in October

Matthias Balk / Picture Alliance / Getty Images

Key Takeaways

• Amazon said Wednesday it is laying off another 16,000 corporate employees, after cutting 14,000 jobs in October.
• Many of Amazon's big tech peers have also laid off workers recently.

Amazon's corporate ranks are about to get smaller.

The tech giant said Wednesday that it is laying off another 16,000 corporate employees, after cutting 14,000 jobs in October.

Amazon Senior Vice President of People Experience and Technology Beth Galetti said in a statement that the move is part of the company's ongoing efforts to "strengthen our organization by reducing layers, increasing ownership, and removing bureaucracy."

The timing of the cuts aren't meant to reflect a "new rhythm" of reductions every few months, according to Galetti, but she didn't rule out the possibility of future layoffs. "Just as we always have, every team will continue to evaluate the ownership, speed, and capacity to invent for customers, and make adjustments as appropriate," Galetti wrote.

Why This News is Important

Many of Amazon's big tech peers including Microsoft (MSFT) and Google parent Alphabet (GOOGL) have also laid off workers in recent months. Some experts have said the industry could still be correcting for overhiring during the pandemic, while others have pointed to the industry's growing spending on AI and the need to cut costs elsewhere to sustain profits.

Executives could face questions about the cuts when the company reports fourth-quarter earnings after the closing bell next Thursday. Analysts at Bank of America told clients this week that they're expecting Amazon (AMZN) to post strong results, though they warned its capital expenditures forecast could top consensus projections as the company invests heavily in its AI buildout.

Amazon shares were little changed in recent trading, and are up just 2% over the last 12 months.

Starbucks shares rose Wednesday after its latest financial results landed.

David Paul Morris / Bloomberg via Getty Images

Key Takeaways

• Starbucks earlier today reported comparable-store and transaction growth in the last quarter of 2025 that signaled continued progress in its turnaround effort.
• The company said an Investor Day event set for tomorrow will detail its long-term growth plan.

People are going, if you'll forgive the joke, back to Starbucks.

The phrase is doing triple duty there: It's the name of the coffee giant's turnaround plan, but it's also what was visible in the company's latest financial results, reported earlier today. And it's what investors are doing—today, but also this year—with the stock, too.

Why This Matters to Investors

Investor caution around Starbucks' shares appears to be cooling. The stock, lifted by the accumulation of signs that its turnaround is getting people back into its cafes, has handily beaten the S&P 500 this year and continues to climb today.

Starbucks (SBUX) earlier today reported fiscal first-quarter (ended Dec. 28) global and North American comparable-store sales that rose 4% year-over-year, as well as a 3% rise in transactions. That served as further signal that the company's "Back to Starbucks" effort to get people into its cafes again is working.

The results are helping shares of Starbucks on Wednesday: They were recently up more than 2%, rising on a broadly quiet day for stocks ahead of a Federal Reserve interest-rate decision and highly anticipated earnings reports from major tech companies.

The move has Starbucks shares well into market-beating territory for 2026 and in the neighborhood of flat for the past 12 months—which may not sound like much, but today's highs above $100 look pretty good compared to 12-month lows in the $70s.

"We are clear on our long-term vision," CEO Brian Niccol said on a conference call Wednesday, a transcript of which was made available by AlphaSense. "We will be the world's greatest customer service company. We will offer the best job in retail. We will be the community coffee house. Our brand will be visible, relevant and loved everywhere and we will accelerate growth around the world. And finally, we will deliver on our commitments to create shareholder value."

The company has another chance to impress tomorrow morning, when an Investor Day is scheduled. The company in a statement said it will use the event to "unveil its long-term growth strategy."

Meta is set to report earnings after the closing bell Wednesday, when it could offer more details about its subscription plans.

Ismail Aslandag / Anadolu / Getty Images

Key Takeaways

• Meta is looking to trial new paid subscription plans for premium experiences on Instagram, Facebook, and WhatsApp, according to a report from TechCrunch.
• The report, confirmed by a Meta spokesperson, said the plans could be rolled out in the coming months and offer access to special AI features.

You're likely one of the billions who use social media. But would you pay for the privilege?

More changes to do so may soon come your way. Meta Platforms (META), parent company of Instagram, Facebook and WhatsApp, is looking to test new subscription plans for premium experiences on the trio of apps, according to a TechCrunch report later confirmed to Investopedia by a Meta spokesperson.

The report said the plans would give users access to features that could include AI capabilities, as well as more control over their actions on the platform; it has fueled speculation that some tools and features that are currently free could move behind a paywall.

Many of Meta’s social media peers already have ‘freemium’ models, with paid subscriptions offering premium versions of products that are also offered free of charge. Elon Musk’s X, formerly known as Twitter, has long offered paid premium subscription options. So has Microsoft's (MSFT) LinkedIn and Snap's (SNAP) Snapchat. 

Why This Is Signficiant

Rolling out new premium subscription options could help Meta raise revenues. At a time when many Americans are cutting back on nonessentials, however, the company may have a harder time convincing users to pay.

Several of those plans, which can range in price from as low as $3 monthly for X’s “basic” premium tier to hundreds of dollars for access to LinkedIn's most advanced recruiter features, received some pushback from users when they launched, and those services still largely rely on the free versions to attract new users and prime them to upgrade.

Meta, too, offers a service called Meta Verified, which comes with a verified badge promoting the authenticity of those who have it. That service, targeted toward content creators and businesses, is expected to remain separate from the new subscriptions.

The company has also rolled out ad-free experiences on Facebook and Instagram in the U.K. and European Union in recent years, part of its efforts to comply with local regulations. The offerings cost about 2.99 British pounds ($4.12) monthly in the U.K. and 5.99 euros ($7.18) monthly in the EU.

Meta reportedly looks to gauge interest and collect feedback from its users as it starts rolling out the subscriptions in the coming months. The social media giant is set to report earnings after the market's close Wednesday, when it could offer more details about its plans.

Shares of Meta, while little changed Tuesday, have added about 3% in 2026 so far after a roughly 13% climb in 2025.

Nvidia CEO Jensen Huang at last week's World Economic Forum in Davos, Switzerland

Krisztian Bocsi / Bloomberg / Getty Images

Key Takeaways

• China's government has approved several Chinese tech companies to buy Nvidia's H200 chips, The Wall Street Journal reported Wednesday.
• The Trump administration gave the green light to Nvidia to sell the chips late last year for a 25% cut of revenues.

America's AI chip leader Nvidia is getting closer to being able to sell more chips in China.

China's government has given clearance to a few big tech companies in the country including ByteDance and Alibaba (BABA) to start placing orders for Nvidia's (NVDA) H200 AI chips, The Wall Street Journal reported Wednesday.

The initial approval would allow the companies to buy hundreds of thousands of chips worth around $10 billion, according to the Journal. Nvidia did not respond to a request for comment in time for publication.

Why This Matters to Investors

China's market represents a major growth opportunity for Nvidia, with CEO Jensen Huang previously telling investors he believes sales to China could be worth $50 billion a year.

Last month, President Donald Trump greenlighted the H200 chips, which were previously banned from export to China on national security grounds, for sale to the country in exchange for Nvidia agreeing to give the U.S. government a 25% cut of sales.

CFO Colette Kress said earlier this month that the U.S. government was "working feverishly" on ironing out the details of that deal, and that Nvidia expected to be able to ship to China soon. However, the company still faced some uncertainty about approval from the Chinese government, which has previously discouraged Chinese companies from buying chips over security concerns.

Huang is in the midst of a trip to China, meeting with employees and potential customers, but not any government officials as of yet, per the Journal.

Nvidia shares were up about 1% in recent trading. They've gained more than half their value in the last 12 months, but are down nearly 8% from their October highs.

News of the day for Jan. 28, 2026

Investors will be paying close attention to what Fed Chair Jerome Powell has to say this afternoon.

Sha Hanting / China News Service / VCG / Getty Images

Stock futures are higher Wednesday morning as investors await the latest decision from the Federal Reserve on interest rates and earnings reports from several tech giants; the Fed is widely expected to hold rates steady, but investors will be keeping close tabs on Fed Chair Jerome Powell's comments at a press conference this afternoon; Tech heavyweights Meta Platforms, Tesla and Microsoft are each set to report quarterly results after the closing bell, headlining a busy day of earnings; Chinese authorities have reportedly given the green light to a number of companies to order Nvidia's H200 chips; and Amazon is undergoing another round of job cuts with about 16,000 employees expected to be affected by layoffs. Here's what you need to know today.

Stock Futures Rise After S&P 500 Hit Record High; Gold Rally Continues

Stocks are pointing to a higher open ahead of the Fed's latest decision on interest rates and a flurry of earnings reports from major tech companies. Futures tied to the S&P 500, which closed at a record high on Tuesday, were up 0.2% recently, while Nasdaq futures added 0.8% as tech stocks continued to rally. Dow Jones Industrial Average futures were hovering near unchanged this morning, after a 20% decline in shares of UnitedHealth sent the blue chip index down more than 400 points yesterday. Gold futures were up 3.5% at $3,260 this morning, as the precious metal continues to set all-time highs. Bitcoin was trading just below $90,000, up from an overnight low of $88,700 and gaining ground for the third straight day. The yield on the 10-year Treasury note, which affects borrowing costs on all sorts of loans, was at 4.24%, up from 4.22% at yesterday's close.

Fed Set to Announce Rate Decision This Afternoon

The Federal Reserve is scheduled to announce its latest decision on interest rates at 2:00 p.m. ET following the two-day meeting of the Federal Open Market Committee. While the Fed isn't expected to cut rates today after doing so three times in a row to end last year, there is still plenty to watch out for, with Fed Chair Jerome Powell set to speak at a press conference at 2:30 p.m. ET. Investors will be eager to hear what Powell has to say about the outlook for inflation and the job market, and what that might mean for interest rates this year. Powell will also likely be asked about the pressure he has faced from President Donald Trump to aggressively lower rates and a Department of Justice investigation that Powell has said is politically motivated. The legal threat against Powell and the persistent demands from Trump for lower rates have sparked concerns that Fed independence could be compromised.

Meta, Microsoft, Tesla Headline Busy Earnings Day

Wednesday will also be dominated by big tech earnings, with results from Tesla (TSLA), Microsoft (MSFT) and Meta Platforms (META) all due after the closing bell. For Tesla, investors will be listening for updates from CEO Elon Musk on the manufacturing and sales timelines for Optimus humanoid robots and details on expansion of self-driving robotaxis to cities beyond Austin and San Francisco. For Microsoft, investors will be watching for signs that AI demand remains strong and is still driving revenue for the Azure cloud services platform, along with its plans for spending on AI infrastructure this year. AI spending will also be in focus for Meta, as some investors and analysts have questioned whether big tech companies will ever see a return on the hundreds of billions they are spending on AI infrastructure. Shares of Tesla, Meta and Microsoft were little changed in premarket trading. Among the big-name companies that reported this morning, shares of Starbucks (SBUX) and AT&T (T) were up sharply ahead of the opening bell, while GE Vernova (GEV) stock lost ground.

China Clears Way for Nvidia H200 Chip Sales

China has given clearance to big tech companies in the country including ByteDance and Alibaba (BABA) to start placing orders for Nvidia's (NVDA) H200 chips, Reuters and The Wall Street Journal reported. Nvidia reached a deal with the Trump administration to receive a license to export the less-advanced chips late last year, with the federal government receiving 25% of the revenue from the chips. Nvidia CEO Jensen Huang had said demand from Chinese customers looked strong, but it was uncertain whether Nvidia had received any actual orders yet as Chinese companies awaited approval from the Chinese government, which had stopped the companies from buying previous generation H20 chips when they had been made available. Nvidia shares were up nearly 2% recently.

Amazon to Undergo Largest Layoffs Ever With 16,000 Workers Cut

Amazon (AMZN) is set to undergo its largest layoffs ever just months after setting that record with 14,000 cuts in October. The tech giant told employees Wednesday that another 16,000 jobs will be eliminated in a new round of cuts. The company said in October that the cuts were being made because of a need to be "organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business." The tech sector has been hit hard by layoffs in recent years. Some experts have said companies are correcting from over-hiring during the pandemic, while others have pointed to the massive investments being put into AI infrastructure and the need to continue growing profits while doing so as an explanation for the cuts. Reuters reported late last week that more layoffs were looming at Amazon, after reporting around the time of the October cuts that the company was likely looking to cut around 30,000 jobs in total.

Microsoft is one of several big tech companies set to report its latest quarterly results this week

Matthias Balk / Picture Alliance / Getty Images

Key Takeaways

• Microsoft is slated to post fiscal second-quarter results Wednesday afternoon, with analysts expecting rising revenue and profits amid strong AI demand.
• Options pricing suggests traders see the stock swinging up to 5% in either direction in the days following the report.

Microsoft is scheduled to report its latest quarterly results after the market closes on Wednesday, with traders anticipating a big move in the tech giant's stock following the results.

Options pricing suggests traders expect Microsoft's (MSFT) stock could move close to 5% in either direction by the end of the week. A move of that size from Tuesday's close near $481 could lift Microsoft shares above $502 at the high end, or drag them down to $459 at the low end.

The shares are down about 11% from when Microsoft last reported results in October, when the company topped estimates but said it would significantly boost its investments in AI infrastructure. Shares had closed at a record high around $542 the day before the results.

Amid lingering worries about the company's AI spending, investors will likely be eager to hear what executives have to say about capital expenditures, along with projections for the "Intelligent Cloud" segment, which includes Azure.

Why This Matters to Investors

Microsoft may face a tough setup heading into the results, as worries about the costs of its AI buildout could potentially overshadow strong earnings and revenue growth.

The company is expected to report revenue of $80.31 billion for its fiscal second quarter, up 15% year-over-year, with a 27% jump in Intelligent Cloud revenue to $32.39 billion. Earnings per share could come in at $3.87, up from $3.23 a year ago, according to estimates compiled by Visible Alpha.

Morgan Stanley analysts, who hold an "overweight" rating and $650 price target, recently wrote that their conversations with Microsoft executives and customers indicated Azure revenue should continue growing in line with or ahead of expectations as the company brings more data center capacity online this year.

Analysts remain overwhelmingly bullish on Microsoft, with 14 of the 15 analysts with current ratings tracked by Visible Alpha recommending buying the stock, compared to one neutral rating. Their mean target around $615 would suggest nearly 30% upside from the stock's close Tuesday.

Federal Reserve Governor Stephen Miran has cast a number of dissenting votes since he started on the policy committee.

Victor J. Blue / Bloomberg via Getty Images

Key Takeaways

• On the Federal Reserve's key policy committee, any member is free to vote as they wish, but that doesn't mean there won't be consequences for going against the majority.
  
• FOMC members who dissent from the majority are less likely to have their way at future meetings, a team of researchers found.
  
• The FOMC has had an unusually high number of dissenting votes lately, as members have been divided over whether inflation or unemployment poses the greatest threat to the economy.
  

If anyone on the Federal Reserve's policy committee votes against the majority at the Fed's meeting on Wednesday, they may regret it down the line.

That's according to a research paper published last week by the National Bureau of Economic Research. The team of researchers at the University of California, Berkeley, the Fed, the NBER, and Hong Kong University of Science and Technology found that members who vote against the majority are less likely to get their way at subsequent meetings.

A majority of Fed officials voted to lower the rate by a quarter-point at its three most recent meetings, though, unusually, there were dissenting votes at all of them. Members who wanted to keep rates even and those who wanted steeper cuts voted against the action.

What This Means For The Economy

Given the incentives for voting with the majority on the FOMC, the recent spate of dissenting votes underscores the Fed's dilemma: the central bank is caught between stubbornly high inflation and a worrisome job market slowdown.

Given such varying viewpoints, researchers wondered why dissenting votes aren't cast more often—after all, most FOMC votes are unanimous.

To find out, researchers pored over transcripts of Fed meetings and voting records. The chair was highly influential in steering the majority opinion and establishing unanimity, the researchers found. They also found that every time a member went against that consensus, their preferred interest rate policy was about one-third less likely to be adopted at a future meeting. In other words, they may be being punished for breaking the committee's consensus.

The researchers considered another possible interpretation: "FOMC members only dissent when they realize the battle is lost and their viewpoint will not carry the day in future meetings," they wrote.

"Whatever the reason, what is clear is that dissent not only does not move subsequent committee decisions toward the individual’s policy preference, but comes at the added cost of future loss of influence," they wrote.

Consensus has been less than rock-solid lately. In recent speeches, members of the FOMC have laid out sharply divergent visions of the economy, with some viewing high inflation as a greater threat and others seeing the hiring slowdown as a red flag that a surge in joblessness could be on the way.

The federal funds rate affects borrowing costs on all kinds of loans, and is the Fed's main tool for pursuing its dual mandate from Congress to keep inflation low and employment high. The FOMC is widely expected to keep the rate steady on Wednesday to gauge how the economy has responded to its recent moves.

The economy is faring well, but it doesn't always feel that way.

Joe Lamberti / Bloomberg via Getty Images

Economists are generally optimistic about the economy, but the public hasn't hated it this much in more than a decade.

If you're downbeat about the economy and your personal finances, you're far from alone: consumer sentiment fell to its lowest level since 2014 in January, according to a survey by The Conference Board.

Yet the word "recession" has dropped from most economic forecasts as the economy has shrugged off disruptions from tariffs, the government shutdown, and a slowdown in the job market. In fact, the economy is on track to grow at a blistering 5.4% annualized rate in the fourth quarter, the fastest since the rebound from the pandemic recession, according to the Federal Reserve Bank of Atlanta's GDP Now tracker.

"Consumer sentiment has become unusually divorced from the macroeconomy since the pandemic," Bernard Yaros, Lead US Economist at Oxford Economics, wrote in a commentary. "Understanding this disconnect is important because forecasters have historically looked to consumer surveys for additional useful information on consumption trends."

Why Economists Are Optimistic

The main reason economists believe the economy is solid is that the main engine of economic growth—consumer spending—has stayed solid. Consumers as a whole have simply continued to spend as if there's no tomorrow, despite all the economic upheaval.

Why It Doesn't Feel Like The Economy Is So Great

Take a look under the hood of that consumer spending, though, and a possible reason for the consumer pessimism stands out: people with high incomes are doing most of the buying, while lower- and middle-income households struggle to make ends meet.

As this chart from the Federal Reserve Bank of Dallas shows, top earners account for a larger share of wealth, household income, and spending than they did a few decades ago.

Since the pandemic hit, inflation has eroded the buying power of paychecks for those whose wages haven't kept up, hitting lower earners the hardest.

GDP may tell people one thing about the health of the economy, but their bank statement at the end of each month tells a different story when the necessities of life keep getting more expensive. Before the pandemic, annual inflation was typically 2% or under, meeting the Federal Reserve's target for price stability. That hasn't been the case in more than four years.

Yaros flagged this sticker shock and the "long shadow" cast by post-pandemic price increases as a major reason for the disconnect between hard data and consumer sentiment in the University of Michigan's widely watched poll on how people feel about the economy and their finances.

Other factors, he said, are that reporting on economic news has become increasingly negative, and that more of those surveyed are Democrats, which reflects partisan judgments in the poll.

The Letter Of the Day Is K

All this adds up to what economists call a "K-shaped" economy after the shape of the graph depicting the trajectory of high earners versus those with typical incomes.

Wealthier households own most of the stocks and have benefited most from the recent AI-driven stock market boom, while average households, more dependent on wages, see the financial situation deteriorating.

Here's what it looks like, as charted by economist Adam Tooze, a historian at Columbia University:

Adam Tooze

Consumer confidence sank in January, even as spending continued at strong levels, led by higher-income households.

Eilon Paz / Bloomberg via Getty Images

Key Takeaways

• The widely followed Conference Board Consumer Confidence Index fell to its lowest level since May 2014, as worries over job losses and inflation persisted.
• Despite a recent trend of dour consumer survey readings, the economy has been expanding, and consumers keep spending, driven primarily by high-income consumers.
• Despite the poor confidence, economists expect consumers to continue spending in 2026.

Consumer confidence plunged in January, but fears about the future aren't stopping some people from spending.

The Conference Board’s Consumer Confidence Index is hitting its lowest levels since 2014 on Tuesday. It comes after another widely followed sentiment survey last week showed consumers remained in a poor mood in January, with a reading 20% below the same time a year ago. Consumers say they’re worried about jobs, inflation, tariffs, groceries and health insurance.

But with spending continuing at a robust pace, and data showing continued economic expansion, are consumers saying one thing and doing another?

“It is always worth taking consumer confidence readings in context and remembering that vibes are not always fully reflected in spending,” wrote Wells Fargo economists Tim Quinlan and Shannon Grein. “That said, it still bears noting that consumers felt more confident at the height of the pandemic than they do now.”

Why This Matters for the Economy

Consumer confidence influences major financial decisions like spending, saving, and investing, so a sharp drop can signal future risks to economic growth, even if it hasn’t yet shown up in hard data. An economy propped up by higher-income households can mask stress for many consumers and shape how investors think about inflation, earnings, and recession risk.

K-Shaped Economy Driving Split Between Attitudes, Action

What’s fueling this diverging trend? Economists point to what’s called the “K-shaped” economy, where lower earners struggle more, while high-income spenders help drive spending and economic growth numbers higher. 

For example, people making more than $125,000 a year increased their 2025 holiday season spending by nearly 30% this year, while lower-income groups all pulled back on their holiday spending, according to a report from PwC. Similarly, a Federal Reserve Bank of Boston report from August showed that consumer spending since 2022 has been primarily driven by high-income households.

“The K-shaped economy is great for the top 20%, but many middle-class and moderate-income Americans are barely keeping up," wrote Heather Long, chief economist at Navy Federal Credit Union. “For now, Americans do continue to spend. While Navy Federal sees some evidence of moderate-income consumers pulling back, overall consumption is holding up in January despite the gloomy mood.” 

And despite the pessimistic attitudes revealed in survey questions, economists expect consumer spending and economic growth to remain robust this year.

“This trend should continue in 2026 with a continued boost from AI spending and productivity gains,” wrote Nationwide Senior Economist Ben Ayers.

Another reason for economic optimism is an expected boost from government stimulus from tax changes in the "One Big Beautiful Bill." 

“We expect that larger tax refunds and additional fiscal stimulus will provide a shot in the arm for many households worried about a softening labor market and rising prices,” Ayers wrote. “This should keep consumer spending solid in coming months despite the weak consumer confidence results for January.”