The three major stock indices inch higher, but Netflix plummets 5%, and divergence in the US stock market has become inevitable.

2026-01-21 14:32:02

U.S. stocks opened with a lackluster rebound today. The Dow Jones Industrial Average rose by 0.12%, the S&P 500 increased by 0.2%, and the Nasdaq Composite gained 0.25%. Behind this seemingly stable rebound, individual stock divergence has already become evident—Netflix plummeted over 5%, Johnson & Johnson declined by 2.9%. This phenomenon of mild index gains coupled with significant declines in individual stocks precisely reflects the current market reality: the rebound lacks a solid foundation, and risks remain.

The Fragility of the Rebound: What the Index Masks

Today’s small rebound stands in stark contrast to yesterday’s sharp decline in U.S. stocks. According to the latest reports, on January 20 (Eastern Time), all three major U.S. stock indices closed lower—Dow down 1.76%, S&P 500 down 2.06%, Nasdaq down 2.39%. This was the largest single-day drop for the S&P 500 since October last year.

From yesterday’s plunge to today’s slight rise, the market completed an emotional swing within just one trading day. However, the quality of this rebound is questionable—the slight index increase masks deep divergence at the individual stock level.

Indicator	Yesterday’s Close	Today’s Open	Change
Dow Jones	-1.76%	+0.12%	Weak rebound
S&P 500	-2.06%	+0.2%	Weak rebound
Nasdaq	-2.39%	+0.25%	Weak rebound

The Real Reasons Behind Netflix’s Plunge

Netflix fell over 5% today, and this is not an isolated event. According to related news, Netflix’s decline has multiple reasons:

Weak earnings guidance: The company’s first-quarter earnings forecast did not meet market expectations, which is the most direct source of investor disappointment.
Suspension of stock buybacks: To support the acquisition of Warner Bros., Netflix has adjusted the deal to a fully cash offer, maintaining a total of $82.7 billion, and has paused its stock repurchase plan.
Acquisition cost pressures: This large acquisition was aimed at preventing a bidding war from Paramount but also brought substantial financial pressure to the company.

This means Netflix faces not only slowing growth but also significant financial burdens from the massive acquisition. From an investment perspective, this is a double blow.

The Context Behind Johnson & Johnson’s Decline

Johnson & Johnson fell 2.9%, for the same clear reason—its earnings outlook fell short of market expectations. This reflects a broader phenomenon: the performance of large blue-chip stocks is under pressure.

According to related news, during yesterday’s sharp decline, tech giants all fell sharply, with Nvidia and Tesla dropping over 4%, Apple and Amazon over 3%. Bank stocks also declined across the board, with JPMorgan Chase and Morgan Stanley falling over 3%. This indicates that the issue is not limited to a single industry or company but is a systemic growth concern.

Geopolitical Risks Still Unresolved

The immediate trigger for yesterday’s market plunge was Trump’s tough rhetoric regarding Greenland and threats of tariffs against several European countries. According to the latest reports, this triggered a global risk-off sentiment—both the dollar and U.S. Treasuries fell, while gold soared past $4,760 per ounce, hitting a record high.

More seriously, Japan’s government bond market experienced the “most chaotic” sell-off in recent years, with long-term bond yields soaring over 25 basis points in a single day. This spillover effect further impacted the U.S. bond market. In Europe, the European Parliament froze the approval process for the U.S.-EU trade agreement, and Danish pension funds are considering liquidating U.S. bonds.

This domino-like chain reaction indicates that geopolitical risks are far from resolved. Today’s rebound may be just a short-term respite rather than a sign of genuine risk dissipation.

Focus for the Future

Trump is scheduled to speak at the Davos Forum (January 21, 21:30 Beijing time), which could further influence market expectations. Meanwhile, the U.S. Supreme Court will hold a hearing on Trump’s dismissal of a Federal Reserve governor, and these political events could serve as new market triggers.

On the corporate front, the downward revisions of earnings guidance for companies like Netflix and Johnson & Johnson suggest that more firms may face similar growth slowdown pressures. This will determine the future direction of the U.S. stock market.

Summary

Today’s U.S. stock rebound is weak. The slight index gains cannot hide the deep divergence among individual stocks and the market’s true concerns. Netflix’s plunge reflects the reality of weakening corporate growth momentum and increased financial pressure, while geopolitical risks still hang over the market.

In this context, the rebound may be short-lived. Investors should watch whether these declines in individual stocks evolve into broader market corrections and whether subsequent comments from Trump will trigger risk aversion again. In the short term, market volatility is likely to remain elevated.

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