US Stock market outlook: S&P 500, Dow Jones, Nasdaq trade will be driven by these pivotal factors. Details here

Market Overview - The S&P 500 index has started 2026 with an increase of about 1 percent, following three consecutive years of double-digit returns [1][6] - The current valuation of the S&P 500 is above 22 times expected earnings, significantly higher than its long-term average of 15.9, indicating that earnings expectations must be met [1][2] Earnings Expectations - S&P 500 earnings are projected to rise by more than 15 percent in 2026, with a focus on whether companies are beginning to see returns from AI-related investments [2][6] - A significant portion of the S&P 500, including major companies like Apple, Microsoft, Meta Platforms, and Tesla, is set to report quarterly results, which will be crucial for market sentiment [6] Sector Performance - The technology sector, particularly AI-related stocks, faced skepticism late in 2025 regarding the returns on substantial investments in data centers and infrastructure, which had previously driven the bull market [2][6] - On a recent trading day, the S&P 500 rose slightly by 2.26 points, while the Dow Jones fell by 285.30 points, and the Nasdaq increased by 65.22 points, indicating mixed performance across major indices [5][6] Geopolitical Factors - Investors are closely monitoring potential geopolitical developments and policy proposals from the Trump administration, particularly regarding the nomination of a new Federal Reserve chair [3][6]