Market Update: Futures and Economic Indicators
This morning, March S&P 500 E-Mini Futures (ESH26) are slightly up by +0.10% as investors wait for the U.S. non-farm payroll data, which will have implications for the Federal Reserve’s interest rate decisions.
Yesterday, major indexes on Wall Street had mixed results. S&P Global (S.P.G.I.) dropped over -9%, the biggest loser in the S&P 500, following a report that showed disappointing fourth-quarter earnings and a lower-than-expected fiscal 2026 EPS forecast. Stocks related to AI infrastructure also took a hit; Western Digital (WDC) fell more than -8%, and both Nasdaq 100 and Seagate Technology Holdings (STX) declined more than -6%. Wealth management stocks faced pressure too, influenced by concerns over new AI tools affecting strategies at Raymond James Financial (R.J.F.) and LPL Financial Holdings (LPLA), with both sinking over -8%. On a more positive note, Datadog (DDOG) surged more than +13% after it surpassed expectations for its fourth-quarter results, making it the top performer in the S&P 500 and Nasdaq 100.
Economic data released Tuesday indicates that U.S. retail sales in December did not change from the previous month, falling short of expectations for a +0.4% rise. Core retail sales, excluding autos, were also stagnant, against projections of a +0.3% increase. Moreover, the U.S. employment cost index rose by +0.7% quarter-over-quarter, below the anticipated +0.8% increase. The import price index for December matched expectations, showing a +0.1% rise month-over-month.
“The latest consumer spending news hasn’t necessarily altered the Federal Reserve’s rate cut outlook,” commented Gary Schlossberg, a global strategist at Wells Fargo Investment Institute. Interestingly, current market expectations still see a rate cut possibly occurring at the Fed’s June 17 meeting.
Cleveland Fed President Beth Hammack mentioned that rates might stay unchanged for a prolonged period while new economic data is evaluated. “Instead of making abrupt changes to fund rates, patience might be the better approach as we gauge the effects of recent cuts and monitor the economy’s trajectory,” she stated. Meanwhile, Dallas Fed President Rory Logan pointed out that significant weaknesses in the labor market would be needed for further cuts, although he remains optimistic about waning inflation.
In terms of interest rate futures, there’s a 78.4% chance that no changes will occur in the next March FOMC meeting, with a 21.6% chance of a 25 basis point cut.
Today, global attention is set on the U.S. monthly payroll report, delayed due to a partial government shutdown. This report will include revisions to the employment growth estimates for the year up to March 2025, predicting a slower hiring rate overall. Economists expect a nonfarm payroll increase of around 66,000 for January, up from December’s 50,000.
Joshua Mahoney from Scope Markets mentioned that a sluggish economy “could definitely lead the Fed to consider cutting rates,” especially if upcoming inflation figures are lackluster.
A recent survey by 22V Research found that 42% of investors anticipate a “risk-on” stance regarding major employment statistics, while 37% see a “mixed/negligible” outlook and 21% hold a “risk-off” perspective.
Additionally, attention will be on U.S. average hourly wage data, with an expectation of a +0.3% month-over-month increase for January, down from +3.8% year-over-year in December.
The U.S. unemployment rate will also be announced today, with a forecast of it holding steady at 4.4% for January.
Today’s Economic Information Administration’s crude oil inventory report is expected to reflect a reduction of 200,000 barrels, compared to last week’s -3.5 million barrels.
Investors will be paying attention to comments from various Federal Reserve officials today, including Kansas City Fed President Jeff Schmidt and Vice Chair for Supervision Michelle Bowman.
In earnings news, companies such as Cisco Systems (CSCO), McDonald’s (M.C.D.), T-Mobile US (TMUS), Shopify (shop), and AppLovin (app) are anticipated to announce their quarterly results. According to Bloomberg Intelligence, S&P 500 companies are expected to see an average profit growth of +8.4% year-over-year in the fourth quarter.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note stands at 4.129%, down -0.39%.
The Euro Stoxx 50 Index declined by -0.34% this morning due to concerns about AI disruptions. Technology stocks were particularly hit, with Dassault Systèmes SE (DSY.P.DX) plummeting over -19% after disappointing quarterly results and revenue outlook for 2026. Similar concerns also affected wealth management stocks, pushing them lower. Additionally, defense stocks dipped following news about Ukrainian President Volodymyr Zelenskiy planning a presidential election and a potential peace agreement referendum. On a brighter note, mining stocks performed well.
Data from Italy indicated a lesser-than-expected decline in monthly industrial production in December, falling -0.4% compared to forecasts of -0.6%. Meanwhile, the fourth quarter saw some recovery in production numbers, hinting at an easing of the country’s prolonged manufacturing downturn.
The focus now shifts to the forthcoming U.S. jobs report. In corporate updates, Siemens Energy AG (ENR.D.DX) saw a rise of more than +4% following a strong first-quarter earnings report, while Heineken (HEIA.NA) increased more than +3% after announcing job cuts of up to 6,000 positions globally.
Japan’s financial markets were closed due to a holiday, while China’s Shanghai Composite Index closed up by +0.09% as investors processed lower-than-expected inflation data. Nonferrous metals performed well, although semiconductor and AI-related stocks faced declines. January’s consumer inflation was restrained due to falling food prices, showing a +0.2% rise year-over-year, less than anticipated. Interestingly, producer price deflation continued. Xavier Wong from eToro commented that this inflation data could provide room for further policy easing if deemed necessary.
Additionally, the People’s Bank of China announced plans to boost financial support to stimulate domestic demand amidst concerns over weak consumption. On a separate note, China’s stock markets experienced significant net inclusions in MSCI benchmarks, potentially attracting more index-tracking investments. In corporate news, Semiconductor Manufacturing International declined over -2% in Hong Kong after issuing a cautious sales outlook for the first quarter.
As for January inflation data, the consumer price index in China rose +0.2% month-over-month and year-over-year, both lower than anticipated, while the producer price index fell -1.4% year-over-year, better than announced expectations.
Japan’s Nikkei 225 index remained closed today, with a scheduled reopening on Thursday.
US Premarket Stock Movers
In pre-market trading, Cloudflare (net) shares surged over +13% following positive fourth-quarter results and an optimistic revenue outlook for fiscal 2026.
Beta Technology (beta) also spiked, increasing more than +18% after Amazon disclosed a 5.3% stake acquisition in the company.
Conversely, Mattel (mat) shares dropped more than -30% due to disappointing holiday quarter results.
Moderna (mRNA) fell over -10% after the FDA declined to review its new seasonal flu vaccine application.
Robinhood Market (hood) experienced a more than -7% drop in pre-market trading after reporting fourth-quarter revenues that fell short of expectations.
Further updates on pre-market stock movements are available.
Today’s Earnings Spotlight: February 11
Today’s earnings announcements include Cisco Systems (CSCO), McDonald’s (MCD), T-Mobile US (TMUS), Shopify (SHOP), AppLovin (APP), Equinix (EQIX), and many others, with expectations around quarterly performance being closely watched.
