Stock Market Today: Stocks Surge Ahead of Fed

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Stocks opened lower Tuesday but quickly found their way into positive territory. The tech sector saw the biggest gains as several mega caps bounced back from Monday's DeepSeek-related drubbing.

At the close, the tech-heavy Nasdaq Composite was up 2% at 19,733, the broader S&P 500 was 0.9% higher at 6,067, and the blue chip Dow Jones Industrial Average had added 0.3% to 44,850.

Nvidia (NVDA) was one of the more notable gainers on Tuesday after the artificial intelligence (AI) chipmaker shed nearly $600 billion in market value Monday – a record single-session loss for any U.S. stock. Today, though, NVDA shares rose 8.8%, recouping $253 billion in market cap.

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Broadcom (AVGO) was another big loser Monday, but the mega-cap chipmaker gained 2.6% Tuesday after getting off to a shaky start.

Mark Malek, chief investment officer of Siebert, called yesterday's sell-off an overreaction. "Competition is what fuels technology innovation! DeepSeek developed an AI [model] in a short period of time with allegedly fewer resources than those used by the U.S.-based prototypes we have all been using to date."

He adds that this is "great news … for every AI behemoth out there who is probably already experimenting with similar models and will by now already be testing DeepSeek's method."

Lockheed Martin stock slumps after earnings miss

Looking at the earnings calendar, Lockheed Martin (LMT) stock declined 9.2% after the aerospace company missed top- and bottom-line expectations for its fourth quarter and provided a mixed forecast for 2025.

Still, plenty of analysts think LMT stock remains a Buy after earnings. Among them is Truist Securities analyst Michael Ciarmoli, who says Lockheed Martin's recent share-price weakness – the stock is down more than 20% since late October – creates a "compelling entry point."

He adds that fears related to potential cost cuts recommended by the Department of Government Efficiency (DOGE) are "overblown" and that "defense spending will continue to rise in coming periods."

GM stock gets a post-earnings upgrade

General Motors (GM) stock sank 8.9% as tariff concerns offset the automaker's fourth-quarter beat and encouraging outlook.

The results were enough for CFRA Research analyst Garrett Nelson to upgrade the consumer discretionary stock to Hold from Sell. Nelson notes that this was General Motors' 10th straight bottom-line beat and came "despite concerns that GM's year-over-year comparisons should be much more difficult in 2025 and the company could lose market share in the near- and intermediate-term due to its lack of hybrid vehicle offerings."

However, Nelson warns that "GM's automotive free cash flow should be about $2 billion lower in 2025, as capex remains significant."

Boeing jumps on upbeat cash flow outlook

Boeing (BA) stock rallied 1.6% even after the aircraft maker came up short of top- and bottom-line expectations for its fourth quarter. The company prereleased the results last week, which likely took the sting out of the miss.

This also allowed investors to focus on Boeing CEO Kelly Ortberg's outlook for free cash flow to be positive in the second half of this year.

Durable goods slip, Fed announcement on tap

In economic news, durable goods decreased 2.2% in December compared to the prior month to $276.1 billion, according to the Census Bureau. Excluding transportation, new orders were up 0.3%.

"Durable goods orders surprisingly fell at the end of last year, though that was due to the decline in volatile transportation bookings," says Priscilla Thiagamoorthy, senior economist at BMO Capital Markets. "The underlying trend has turned up recently, improving prospects for the struggling factory sector."

Next up is tomorrow's policy announcement from the Federal Reserve. The central bank is widely expected to keep interest rates unchanged. Wall Street will be tuned into Fed Chair Jerome Powell's press conference for clues on what's in store in the months ahead. You can follow along with Kiplinger's Federal Reserve blog for live updates and analysis.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.

With contributions from