The S&P 500 Index ($SPX) (SPY) closed flat on Wednesday, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.13% and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.29%. March E-mini S&P futures (ESH26) rose +0.01% and March E-mini Nasdaq futures (NQH26) rose +0.26%.
Stock indexes closed mixed on Wednesday, with the S&P 500 hitting a two-week high and the Nasdaq 100 hitting a one-week high. The better-than-expected January jobs report on Wednesday boosted bond yields and reduced expectations of additional Fed interest rate cuts, weighing on stocks. The 10-year Treasury yield rose +3 bps to 4.17%, and the chance of a Fed rate cut at next month’s FOMC meeting fell to 6% from 23% before Wednesday’s payrolls report.
Stocks were supported by Wednesday’s better-than-expected U.S. monthly jobs report, which showed January nonfarm payrolls rose by more than expected in 13 months, and the unemployment rate unexpectedly fell, indicating a stable labor market.
Wednesday’s decline in software companies capped gains in the broader market and kept the Dow Jones Industrials in negative territory. Additionally, real estate services stocks sank on Wednesday amid concerns that the new generation of artificial intelligence apps and tools could disrupt the industry.
US MBA mortgage applications fell -0.3% in the week ending February 6, with the purchase mortgage subindex down -2.4% and the refinance mortgage subindex up +1.2%. The average 30-year fixed mortgage rate was unchanged from the previous week at 6.21%.
US Nonfarm Payrolls in January rose by +130,000, stronger than expectations of +65,000 and the most in 13 months. The January unemployment rate unexpectedly fell -0.1 to 4.3%, showing a stronger labor market than expectations of no change at 4.4%.
January average hourly earnings in the US increased +3.7% year-on-year, right in line with expectations.
The baseline annual revision of US payrolls for 2025 subtracted -862,000 jobs, a larger revision than the -825,000 expected.
Comments today from Kansas City Fed President Jeff Schmid were bearish for stocks and bonds when he said, “In my view, further rate cuts risk allowing high inflation to persist even longer,” so the Fed should keep rates at a “somewhat restrictive” level.
This week markets will focus on corporate earnings results and economic news. On Thursday, initial weekly jobless claims are expected to fall by -7,000 to 224,000. Additionally, existing home sales in January are expected to decline -4.3% month-on-month to 4.16 million. On Friday, January CPI is expected to rise +2.5% YoY, and January Core CPI is expected to rise +2.5% YoY.
Fourth-quarter earnings season is in full swing, as more than half of the S&P 500 companies have released their results. Earnings have been a positive factor for stocks, with 78% of the 335 S&P 500 companies reporting beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to increase +8.4% in the fourth quarter, marking the 10th consecutive quarter of year-over-year growth. Excluding the Magnificent Seven mega-cap tech stocks, Q4 earnings are expected to increase +4.6%.
Markets are pricing in a 6% chance of a -25bp rate cut at the next policy meeting on March 17-18.
Foreign stock markets closed mixed on Wednesday. The Euro Stoxx 50 closed down -0.19%. China’s Shanghai Composite hit a 1.5-week high and closed up +0.09%. Japan’s Nikkei Stock 225 did not trade as markets in Japan were closed today for the National Foundation Day holiday.
Interest rates
March 10-year Treasuries (ZNH6) closed down -7.5 ticks on Wednesday. The 10-year Treasury yield rose +3.1 bps to 4.174%. March Treasuries fell from a five-week high on Wednesday, and the 10-year Treasury yield rose from a six-week low of 4.117%. Treasuries erased early gains on Wednesday and retreated following the better-than-expected January US payrolls report, which is a tough stance for Federal Reserve policy. Additionally, Kansas City Federal Reserve President Jeff Schmid’s hawkish comments undermined Treasury bond prices when he said the Fed should keep rates at a “somewhat restrictive” level. Additionally, weak demand for $42 billion in 10-year Treasuries undermined Treasury prices as the auction had a bid-to-cover ratio of 2.39, below the 10-auction average of 2.54.
European government bond yields fell on Wednesday. The 10-year German bond yield fell to a two-month low of 2.791% and ended down -1.6 basis points at 2.792%. The 10-year UK bond yield fell to a two-week low of 4.474% and ended down -3.0bp at 4.476%.
The swaps price in a 3% chance that the ECB will cut rates by -25 bps at its next policy meeting on March 19.
US Stock Engines
Strength in chipmakers and AI infrastructure stocks supports the broader market. Micron Technology (MU) closed up more than +10% to lead gains on the Nasdaq 100, and NXP Semiconductors NV (NXPI) and Microchip Technology (MCHP) closed up more than +5%. Additionally, Lam Research (LRCX) and Western Digital (WDC) closed with gains of more than +4%, and KLA Corp (KLAC), Applied Materials (AMAT), and Analog Devices (ADI) closed with gains of more than +3%. Additionally, Seagate Technology Holdings Plc (STX), Texas Instruments (TXN) and Intel (INTC) closed with gains of more than +2%.
Software stocks retreated on Wednesday, weighing on the broader market. Atlassian (TEAM) closed down more than -6%, and Intuit (INTU) and Workday (WDAY) closed down more than -5%. Additionally, Autodesk (ADSK) and Salesforce (CRM) closed with losses of more than -4%. Additionally, Microsoft (MSFT), Adobe (ADBE) and Datadog (DDOG) closed with losses of more than -2%.
Cryptocurrency-exposed stocks fell on Wednesday as Bitcoin (^BTCUSD) fell more than -1%. Coinbase Global (COIN) and Strategy (MSTR) closed down more than -5%, and Galaxy Digital Holdings (GLXY) closed down more than -3%. Additionally, MARA Holdings (MARA) closed down more than -1% and Riot Platforms (RIOT) closed down -0.20%.
Real estate services stocks sank Wednesday amid concerns that the new generation of artificial intelligence apps and tools could disrupt the industry. Cushman & Wakefield Ltd (CWK) closed down more than -13% and CBRE Group (CBRE) closed down more than -12% to lead the losers in the S&P 500. Additionally, Jones Lang LaSalle (JLL) closed down more than -12%.
Teradata (TDC) closed up more than +29% after reporting fourth-quarter adjusted EPS of 74 cents, better than the consensus of 56 cents, and forecasting full-year adjusted EPS of between $2.55 and $2.65, stronger than the consensus of $2.50.
Vertiv Holdings (VRT) closed up more than +25% after forecasting full-year net sales of between $13.25 billion and $13.75 billion, well above the consensus of $12.43 billion.
Generac Holdings (GNRC) closed up more than +17% to lead gains in the S&P 500 after forecasting a full-year Ebitda margin of 18% to 19%, the midpoint above the 18.1% consensus.
GlobalFoundries (GFS) closed up more than +16% after reporting fourth-quarter net income of $1.83 billion, above the consensus of $1.8 billion.
Lattice Semiconductor (LSCC) closed up more than +15% after forecasting first-quarter revenue of $158 million to $172 million, well above the consensus of $148.1 million.
Beta Technologies (BETA) closed with a gain of more than 15% after Amazon.com disclosed a 5.1% stake in the company.
Cloudflare (NET) closed up more than +5% after reporting fourth-quarter revenue of $614.5 million, better than the consensus of $591.4 million, and forecasting full-year revenue of $2.79 billion to $2.8 billion, above the consensus of $2.74 billion.
Gilead Sciences (GILD) closed up more than +5% after reporting fourth-quarter revenue of $7.93 billion, above the consensus of $7.71 billion.
Rapid7 Inc (RPD) closed down more than -28% after forecasting full-year revenue of $835 million to $843 million, weaker than the consensus of $869.8 million.
Mattel (MAT) closed down more than -24% after reporting fourth-quarter adjusted EPS of 39 cents, weaker than the consensus of 54 cents, and forecasting full-year adjusted EPS of between $1.18 and $1.30, well below the consensus of $1.76.
Lyft (LYFT) closed down more than -16% after reporting Q4 rides of 243.5 million, well below the consensus of 255.87 million.
Robinhood Markets (HOOD) closed down more than -8% after reporting fourth-quarter net income of $1.28 billion, missing the consensus of $1.35 billion.
Moderna (MRNA) closed down more than -3% after US regulators refused to review the company’s mRNA flu vaccine.
Earnings Reports (02/12/2026)
Airbnb Inc (ABNB), Alnylam Pharmaceuticals Inc (ALNY), American Electric Power Co Inc (AEP), Applied Materials Inc (AMAT), Arista Networks Inc (ANET), Baxter International Inc (BAX), CBRE Group Inc (CBRE), Coinbase Global Inc (COIN), Dexcom Inc (DXCM), Entergy Corp (ETR), Eversource Energy (ES), Exelon Corp (EXC), Expedia Group Inc (EXPE), Federal Realty Investment Trust (FRT), Howmet Aerospace Inc (HWM), Ingersoll Rand Inc (IR), Iron Mountain Inc (IRM), Kimco Realty Corp (KIM), PG&E Corp (PCG), Public Storage (PSA), Tyler Technologies Inc (TYL), Vertex Pharmaceuticals Inc (VRTX), West Pharmaceutical Services Inc (WST), Wynn Resorts Ltd (WYNN), Zebra Technologies Corp (ZBRA), Zoetis Inc (ZTS).
On the date of publication, Rich Asplund had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
