March S&P 500 E-Mini Futures (ESH26) are down by 0.33% this morning as investors seem hesitant to make any moves ahead of the release of crucial US inflation data.
Yesterday saw Wall Street’s main indexes close lower. Stocks from the so-called Magnificent Seven took a hit, with Apple (AAPL) sliding by 5% and Tesla (TSLA) dropping over 2%. Landstar Systems (LSTR) saw a dramatic decline of more than 15%, while CH Robinson Worldwide (CHRW) fell over 14%. Cisco Systems (CSCO) also faced a significant drop of more than 12%, leading the Dow’s decliners after reporting disappointing second-quarter margins and a weak outlook for Q3. On a positive note, Equinix (Ixx) surged by more than 10%, becoming the top gainer on the S&P 500 following strong forecasts for fiscal 2026.
Adam Crisafulli, founder of Vital Knowledge, remarked, “AI is certainly impacting the economy positively through major capital investments and productivity gains, but it’s also turning out to be a net negative for the stock market.”
According to a Thursday report from the Labor Department, the number of new jobless claims in the US fell by 5,000 to 227,000, slightly above the expected 222,000. Additionally, January’s existing home sales dropped by 8.4% compared to the previous month, totaling 3.91 million units, which is the lowest figure in 16 months and below the forecast of 4.16 million units.
Federal Reserve President Stephen Milan expressed concerns on Thursday that the current monetary policy might hamper US economic growth, which has been buoyed by several policies from the Trump era, including tax cuts. He noted, “I think the biggest risk to the economy is misinterpreting the tightness of monetary policy.”
In other news, the Financial Times reported that President Trump plans to reduce some tariffs on steel and aluminum.
Eyes are now on the upcoming US Consumer Inflation Report, set to be released soon. Investors are particularly keen to see if this report aligns with the strong job data earlier in the week, which had caused some to reconsider predictions of a Fed rate cut. Economists generally anticipate US CPI to rise by 0.3% month-over-month and 2.5% year-on-year in January, down slightly from the previous figures of 0.3% and 2.7%. The core CPI is likewise forecasted to increase by 0.3% month-over-month and 2.5% year-on-year.
Joachim Klement, head of strategy at Panmure Liberum, hinted, “Markets might find support if inflation comes in softer than expected. While the positive labor market data earlier this week have lowered expectations for Fed rate cuts, we believe there could still be further reductions if inflation trends downward.”
A survey from 22V Research showed that 33% of investors expect the market reaction to the CPI report to be “risk-on,” 43% anticipate it to be “mixed/negligible,” and only 24% predict a “risk-off” scenario. Additionally, 62% of investors think that the core CPI is moving in a direction favorable to the Fed.
US interest rate futures indicate a 92.1% chance of no rate changes at the March FOMC meeting, with a 7.9% chance of a 25 basis point cut.
On the earnings front, Moderna (mRNA) and Advance Auto Parts (AAP) are set to announce their quarterly results today.
In the bond market, the 10-year US Treasury yield rose by 0.34% to 4.118%.
The Euro Stoxx 50 Index dipped by 0.09% this morning as investors processed recent corporate earnings and economic data from the region, while looking ahead to key inflation indicators from the US. Friday saw consumer stocks such as L’Oréal (OR.FP) drop more than 3% after the company reported disappointing fourth-quarter sales growth. Mining stocks were also down. Nonetheless, defensive stocks managed to rise, with saffron (SAF.FP) jumping over 7% after projecting increased sales and profits for 2026 and raising its targets for 2028. While tech stocks were up, the sector struggled overall this week. Major indexes look set to finish the week relatively unchanged. According to Eurostat, the euro zone’s GDP grew by 0.3% in the fourth quarter, consistent with initial estimates. Furthermore, INE’s final data indicated a greater-than-expected slowdown in Spain’s inflation rate for January. The data also showed that EU exports to the US remained robust last year, despite the tariff increases. Investors remain focused on the upcoming US inflation data. In corporate news, Delivery Hero Se (DHER.D.DX) saw its stock drop more than 6% after its Middle East unit posted mixed results.
Today, announcements include Spanish CPI, Eurozone GDP (revised estimates), Eurozone employment changes (provisional figures), and Eurozone trade balance data.
Spain’s CPI for January fell by 0.4% month-over-month and rose by 2.3% year-on-year, aligning with expectations of a 0.4% drop and a 2.4% increase year-on-year.
Eurozone GDP in the fourth quarter came in at 0.3% on a quarterly basis and 1.3% year-on-year, as anticipated.
The Eurozone employment change for the fourth quarter showed a 0.2% increase quarter-over-quarter and a 0.7% increase year-on-year, surpassing projections of 0.1% and 0.6%, respectively.
The Eurozone’s trade balance for December stood at 12.6 billion euros, exceeding the expected 11.8 billion euros.
Asian stock markets ended the day lower. China’s Shanghai Composite Index (SHCOMP) dropped by 1.26%, and Japan’s Nikkei 225 Index (NIK) fell by 1.21%.
The decline in China’s Shanghai index was influenced by a risk-averse sentiment ahead of the upcoming holiday. The Chinese stock market will be closed from February 15 to 23 for the Spring Festival, reopening on the 24th. Topsperity Securities noted that, while trading volumes usually decrease ahead of Lunar New Year, the stock market remained relatively strong, buoyed by the yuan’s performance. Technology stocks fell in line with global losses, while energy and mining stocks also declined. Conversely, consumer stocks rose, fueled by expectations of holiday spending. Benchmark indexes managed modest gains for the week. Meanwhile, signs of improving Sino-US relations emerged after reports indicated that the Trump administration had shelved several major technology and security measures targeting China ahead of an upcoming meeting between President Trump and President Xi Jinping. On the economic side, data revealed that new home prices in China continued to slide in January, putting pressure on developers and the broader economy. In corporate developments, East Asia Bank’s stocks plunged over 11% following an announcement about a decline in its net profit for the year.
Japan’s Nikkei 225 index fell today, pulling back from its record high. Investor sentiment soured amidst AI-related worries that triggered a sell-off on Wall Street. Technology stocks suffered significantly, with SoftBank Group’s shares dropping more than 8%, despite reporting its fourth consecutive quarter of profits. Shigetoshi Kamata from Tachibana Securities expressed that, “There were few positive surprises in the financial results, leading to SoftBank’s stock movement in line with broader market trends.” Energy, real estate, and industrial stocks also retreated. Yet, despite the downturn on Friday, the index recorded strong weekly gains, marking its second straight week of improvement. Goldman Sachs strategists upgraded Japanese stocks to overweight status, citing expected political stability and policy advantages in defense, strategic resources, shipbuilding, power resources, and U.S. re-industrialization. Bank of Japan policy committee member Naoki Tamura commented on Friday that there might be an imminent declaration regarding achieving the price target. “There’s a considerable chance we could confirm the 2% price stability goal as early as this spring,” he said, indicating a potential interest rate increase in the short term. On another note, foreign investors purchased 543.2 billion yen ($3.55 billion) of Japanese stocks in the week leading to February 7, amidst hopes of a decisive win for Prime Minister Sanae Takaichi, marking the seventh consecutive week of inflows. In other corporate highlights, Japan’s largest oil and gas producer, INPEX, saw its stock drop over 13% after reporting a 16% decline in net profit for the year ending December. Conversely, Kioxia saw a rise of more than 7% after providing a favorable full-year earnings outlook. The Nikkei Volatility Index, which reflects the implied volatility of Nikkei 225 options, rose by 0.32% to close at 34.21.
Micron Technology (Mu) and Intel (INTC) are both down by more than 1% in pre-market trading.
US steel stocks experienced a decline before the market opened after reports indicated President Trump plans to cut back on some tariffs related to steel and aluminum. Steel Dynamics (STLD) fell by over 4%, while both Nucor (Nue) and Cleveland Cliffs (CLF) saw reductions exceeding 2%.
Pinterest (pin) faced a significant drop of more than 19% in pre-market trading after revealing lower-than-anticipated fourth-quarter revenue and issuing a less optimistic first-quarter earnings outlook.
On the flip side, Applied Materials (Amat) shares soared over 11% in pre-market trading following the positive results from its first-quarter earnings report and an unexpectedly robust second-quarter outlook.
Arista Networks (ANET) saw a rise of more than 8% in pre-market trading after reporting encouraging fourth-quarter results and raising its revenue outlook for the year.
Today’s earnings spotlight includes Cameco (CCJ), Magna International (MGA), Moderna (MRNA), Air Lease (AL), Essent Group (ESNT), Seaboard (SEB), Atmus Filtration Technologies (ATMU), Sensient Technologies (SXT), Advance Auto Parts (AAP), and several others.
