Stock indexes are experiencing a mixed day of trading, with the S&P 500 Index down by -0.10%, the Dow Jones Industrials Index up by +0.12%, and the Nasdaq 100 Index down by -0.25%. This fluctuation comes after weaker-than-expected reports on December retail sales and the Q4 employment cost index, which have caused bond yields to decrease. The 10-year T-note yield fell to a 3-week low today at 4.14%.
US retail sales showed unexpected stagnation in December, indicating potential weakness in consumer spending. This could potentially lead to a downward revision in Q4 GDP. Additionally, the US Q4 employment cost index rose by +0.7% q/q, falling short of expectations and marking the smallest increase in 4.5 years.
Looking ahead, the markets will be closely monitoring corporate earnings results and economic news. On Wednesday, nonfarm payrolls for January are expected to increase by +68,000, with the unemployment rate remaining steady at 4.4%. Average hourly earnings for January are projected to rise by +0.3% m/m and +3.7% y/y. Thursday will see initial weekly unemployment claims expected to decrease by -7,000 to 224,000, while existing home sales for January are anticipated to decline by -4.3% m/m to 4.16 million. On Friday, the Consumer Price Index (CPI) for January is forecasted to be up by +2.5% y/y, with core CPI expected to increase by +2.5% y/y.
The ongoing Q4 earnings season has been positive for stocks, with 79% of S&P 500 companies reporting earnings that beat expectations. S&P earnings growth is expected to rise by +8.4% in Q4, extending the streak of year-over-year growth for the tenth consecutive quarter. Excluding major technology stocks, Q4 earnings are projected to increase by +4.6%.
Market sentiment is currently pricing in a 22% chance of a -25 bp rate cut at the upcoming policy meeting on March 17-18.
Overseas stock markets are showing gains today, with the Euro Stoxx 50, China’s Shanghai Composite, and Japan’s Nikkei Stock 225 all climbing to new highs. Interest rates are also on the move, with March 10-year T-notes up by +10 ticks and European government bond yields decreasing.
In the US stock market, cybersecurity stocks like Atlassian, Zscaler, and Cloudflare are performing well, while AI-infrastructure stocks such as Western Digital and Seagate Technology Holdings Plc are under pressure. Notable movers include Ichor Holdings Ltd, Spotify, Datadog, Credo Technology Group Holding Ltd, and Masco, all experiencing significant gains.
Conversely, Goodyear Tire & Rubber Co, Amentum Holdings, Incyte, Xylem Inc, and S&P Global Inc are among the top losers for the day. Earnings reports for February 10, 2026, include companies like American International Group Inc, Coca-Cola Co, CVS Health Corp, Datadog Inc, Ford Motor Co, Gilead Sciences Inc, and Marriott International Inc.
As the market continues to react to economic data and corporate earnings, investors will be closely watching for any developments that may impact trading activity in the coming days.
