Category: Market Summary

U.S. stock index futures pointed modestly lower on Tuesday, signaling a cautious start to trading as investors reassessed the outlook following two sessions of solid gains.

Futures slipped after fresh data from the Commerce Department showed that U.S. retail sales unexpectedly stalled in December, raising concerns about the strength of consumer spending heading into the new year.

The report showed retail sales were essentially unchanged last month, following a 0.6% increase in November. Economists had been expecting a 0.4% rise. Even after excluding autos — where sales at motor vehicle and parts dealers edged slightly lower — sales remained flat, compared with a 0.4% gain the prior month. Ex-auto sales had been forecast to rise 0.3%.

Meanwhile, separate figures from the Labor Department indicated that U.S. import prices rose marginally in December, matching market expectations.

Wall Street closed mostly higher on Monday, extending the rally that began late last week. The Dow Jones Industrial Average inched to a fresh record close, while technology shares powered a stronger advance in the Nasdaq.

By the close, all three major indexes finished in positive territory. The Dow added 20.20 points, less than 0.1%, to end at 50,135.87. The Nasdaq jumped 207.46 points, or 0.9%, to 23,238.67, while the S&P 500 rose 32.52 points, or 0.5%, to 6,964.82.

Much of the momentum came from a continued rebound in technology stocks, building on Friday’s surge. Software shares were among the leaders, with Oracle (NYSE:ORCL) soaring 9.6% after D.A. Davidson upgraded the stock to Buy from Neutral.

Despite the recent strength, investors appeared hesitant to make aggressive bets ahead of several high-impact U.S. economic releases scheduled for the days ahead. Particular focus is expected on the Labor Department’s monthly employment report, which was postponed last week due to a brief government shutdown.

The jobs report is forecast to show payrolls rising by 70,000 in January, following a 50,000 increase in December, while the unemployment rate is expected to remain unchanged at 4.4%.

Upcoming reports on retail sales and consumer price inflation are also set to draw close scrutiny, given their potential implications for the interest rate outlook.

“With Jerome Powell nearing the end of his term and Kevin Warsh widely expected to take over as Fed Chair, markets are increasingly sensitive to how data influences rate expectations,” said Daniela Hathorn, Senior Market Analyst at Capital.com. “While leadership changes may affect tone and communication, the data remains the ultimate driver.”

She added, “As a result, the employment and inflation releases this week will be critical in determining whether markets lean back into expectations of easing — a scenario that could support equities and precious metals — or whether sticky inflation forces continued restraint.”

Gold-related stocks posted some of the strongest gains in the market on Monday, helped by a sharp rise in bullion prices that lifted the NYSE Arca Gold Bugs Index by 6.1%.

Networking and software stocks also rallied strongly, with the NYSE Arca Networking Index climbing 4% and the Dow Jones U.S. Software Index advancing 3.3%. Brokerage and semiconductor stocks also performed well, while healthcare and airline shares moved lower.

U.S. equity futures were little changed on Tuesday, as markets weighed a recent rebound in technology stocks against a heavy flow of corporate earnings and closely watched U.S. economic data due later in the week. Results are expected from several large companies, including CVS Health (NYSE:CVS) and Coca-Cola (NYSE:KO). Elsewhere, Japan’s Nikkei climbed to a fresh record high, while gold prices edged lower.

Futures pause after tech-driven rally

Stock futures in the United States hovered near unchanged levels, pointing to a cautious start to trading after technology shares led gains in the previous session.

At 03:04 ET, futures on the Dow Jones Industrial Average and the S&P 500 were broadly flat, while Nasdaq 100 futures slipped by 18 points, or 0.1%.

Wall Street’s main indices advanced on Monday, extending gains from the end of last week as investor appetite returned to technology names benefiting from the rapid expansion of artificial intelligence and data-centre infrastructure.

Sentiment was further boosted by a CNBC report that OpenAI chief executive Sam Altman told employees that ChatGPT had resumed growth. The update strengthened confidence in a company seen as a key hub in the AI ecosystem. Analysts at Vital Knowledge said optimism around OpenAI also prompted DA Davidson to upgrade its view on Oracle (NYSE:ORCL), which has a $300bn data-centre agreement with the ChatGPT developer.

By the close, the Nasdaq Composite had risen 0.9%, leaving it just shy of record territory, while the S&P 500 also finished close to all-time highs.

Earnings season gathers momentum

A busy earnings calendar is set to drive markets on Tuesday, as investors look for fresh insight into corporate performance at the start of 2026.

Before the opening bell, reports are due from Marriott International (NASDAQ:MAR), Spotify (NYSE:SPOT), CVS Health and Coca-Cola. Gilead Sciences (NASDAQ:GILD) is scheduled to publish its results after the market close.

In after-hours trading, shares of Onsemi (NASDAQ:ON) fell after the semiconductor group posted weaker-than-expected fourth-quarter revenue, citing a lingering inventory overhang. Customers continue to draw down chip stockpiles built up during earlier supply-chain disruptions.

Onsemi also pointed to headwinds for its silicon carbide business from slowing electric vehicle demand and intensifying competition from China. Its midpoint sales outlook for the current quarter came in below Wall Street expectations.

U.S. retail sales in the spotlight

On the macro side, attention is turning to December U.S. retail sales data.

Consumer spending accounts for more than two-thirds of U.S. economic output and was a major contributor to the 4.4% annualised GDP growth recorded in the third quarter.

Core retail sales, which exclude autos, fuel, building materials and food services and closely track the consumer component of GDP, are expected to rise by 0.3% in December, slowing from a 0.5% increase in November.

Some analysts have flagged a cooling labour market as a potential drag on spending, although Federal Reserve officials described employment conditions as “stabilizing” in January. Analysts at ING said the data should still point to “reasonably healthy” growth and support the view that “the U.S. consumer is alive and well.”

Nikkei hits record on “Takaichi trade”

Asian equities extended gains on Tuesday, led by Japan, where the Nikkei index reached a new all-time high as investors embraced the so-called “Takaichi trade” following Prime Minister Sanae Takaichi’s decisive election victory over the weekend.

Markets expect Takaichi’s policy agenda to favour growth, investment and corporate profitability, reinforcing optimism around pro-business reforms, fiscal support and measures aimed at boosting innovation and strategic industries.

Gold eases as caution prevails

Gold prices slipped on Tuesday, giving back some of Monday’s gains as markets remained cautious ahead of several key U.S. economic releases.

Silver and platinum also edged lower. Precious metals have seen sharp swings over the past week as profit-taking and stretched positioning pulled prices back from record highs.

Safe-haven demand for gold was further tempered by mixed signals in U.S.-Iran relations. While both sides reported progress in weekend talks on Iran’s nuclear programme, Washington nevertheless issued a warning to U.S.-flagged vessels transiting the Strait of Hormuz.

U.S. equity futures point to a muted start on Monday, with markets struggling for clear direction after last week’s sharp late-session rebound.

Traders appear to be stepping back after a volatile stretch that saw technology shares drive a steep selloff midweek, followed by a strong recovery on Friday. With few major U.S. data releases scheduled at the start of the week, activity may remain cautious ahead of several high-profile economic reports due in the days ahead.

The spotlight is expected to fall on the Labor Department’s monthly employment report, which was postponed last week because of a brief federal government shutdown. Economists forecast that U.S. employers added around 70,000 jobs in January, compared with 50,000 in December, while the unemployment rate is seen holding steady at 4.4%.

Investors will also be watching upcoming releases on retail sales and consumer price inflation, as both could shape expectations for the future path of interest rates.

After sliding sharply over multiple sessions, stocks mounted a powerful comeback on Friday. All three major benchmarks posted strong gains, with the Dow Jones Industrial Average finishing above the 50,000 level for the first time.

The rally pushed indices to fresh intraday highs before some profit-taking into the close. The Dow advanced 1,206.95 points, or 2.5%, to 50,115.67, while the Nasdaq climbed 490.63 points, or 2.2%, to 23,031.21. The S&P 500 rose 133.90 points, or 2.0%, to end at 6,932.30.

For the week as a whole, the Dow gained 2.5%, while the S&P 500 slipped 0.1% and the Nasdaq fell 1.8%.

The rebound was largely driven by bargain hunting, with investors stepping in after the recent pullback. Technology stocks had led the earlier decline, dragging the Nasdaq to its lowest closing level in more than two months and briefly pushing the S&P 500 to its weakest intraday level in over a month on Thursday.

Sentiment also improved after a University of Michigan survey showed U.S. consumer confidence unexpectedly strengthened again in February. The consumer sentiment index rose to 57.3 from 56.4 in January, beating forecasts for a decline to 55.5 and marking its highest reading since August 2025. The gain was led by households with larger equity holdings.

The broader market rebound came despite a sharp drop in Amazon shares. Amazon (NASDAQ:AMZN) slid 5.6% after reporting slightly weaker-than-expected fourth-quarter earnings and projecting capital spending for 2026 well above analyst estimates.

Elsewhere, airline stocks staged a strong rally, with the NYSE Arca Airline Index jumping 7.1% to its best close in more than three years. Computer hardware and semiconductor shares also rebounded sharply, lifting the NYSE Arca Computer Hardware Index by 6.8% and the Philadelphia Semiconductor Index by 5.7%.

A surge in gold prices added further support, pushing the NYSE Arca Gold Bugs Index up 5.5%, while gains across networking, financial and oil services stocks helped fuel broad-based strength across most market sectors.

The coming week is set to be shaped by high-profile U.S. employment and inflation releases, another round of technology earnings after sharp sector swings, and contrasting political developments in Japan and the UK. Below are the key themes likely to steer markets in the days ahead.

1. U.S. labour report under the microscope

The main economic highlight will be the long-awaited release of U.S. January employment data, now scheduled for Wednesday after being delayed by a brief three-day federal government shutdown that ended last week.

Forecasts suggest the U.S. economy added around 70,000 jobs in January, compared with 50,000 in December. Investors will be closely examining the report for evidence that the labour market is “stabilizing,” a term recently used by Federal Reserve Chair Jerome Powell.

The Fed cut interest rates several times in 2025 to cushion a softening jobs market affected by tariff-driven uncertainty. Recent signals have been mixed: weekly jobless claims rose more than expected, partly due to severe winter weather, while job openings in December fell to a five-year low. The bulk of that decline occurred in professional and business services, which some analysts see as an early sign of AI-related pressure on white-collar employment.

2. Inflation figures take centre stage

Attention will also turn to U.S. inflation data due on Friday. The headline consumer price index for January is expected to ease to 2.5% year on year from 2.7% in December, while the monthly increase is forecast to remain at 0.3%.

Alongside employment, inflation sits at the heart of the Fed’s dual mandate, meaning both releases could play a decisive role in shaping expectations for monetary policy in 2026. Policymakers kept rates unchanged last month, pointing to a labour market showing signs of stabilisation and inflation that remains subdued, though still above the 2% target.

The data come after a volatile spell for markets, driven in part by worries over the disruptive potential of artificial intelligence in the software sector. Following a steep sell-off last week, U.S. equities bounced back on Friday.

Analysts at Capital Economics said they “suspect U.S. economic data this week might help investors’ nerves recover further[.]”

3. Tech earnings back in focus

A busy earnings calendar, particularly for technology companies, will also be in the background. Results are due from ON Semiconductor (NASDAQ:ON), Datadog (NASDAQ:DDOG), Spotify (NYSE:SPOT), Cisco (NASDAQ:CSCO) and Applied Materials (NASDAQ:AMAT).

These updates may offer new insight into an industry adjusting to the rapid rollout of advanced AI tools. Software stocks tumbled last week after AI startup Anthropic launched a new workplace plugin aimed at legal and administrative tasks, raising concerns about potential pressure on demand for traditional software products.

As a result, investors are likely to focus closely on management commentary around AI adoption, investment and longer-term strategy.

“[I]nvestors had a lot to think about following the extreme volatility from the last several sessions, including the huge rebound on Friday, which raises the question of whether the swoon (especially in tech) is over?” analysts at Vital Knowledge said.

“We think the recent market swings are simply the most visible manifestations of large structural changes that have been underway beneath the surface for months, specifically in tech and AI[.]”

4. Japan’s prime minister strengthens her hand

Beyond the U.S., Asian markets started the week higher after Japanese Prime Minister Sanae Takaichi secured a commanding victory in a snap election held over the weekend.

The election came just 110 days after Takaichi became Japan’s first female prime minister, making the outcome particularly significant. Reports indicate her Liberal Democratic Party captured a rare supermajority in the lower house, bolstering her political authority.

The result appears to open the door to increased public spending and tax cuts, underpinned by what many observers describe as a relatively stable political environment.

“Takaichi’s decision to leverage her popularity for her party turned out to be successful. The landslide victory will reinforce her responsible but expansionary fiscal spending and a more Japan-focused foreign policy. Risk-on sentiment will dominate the market for now,” said Min Joo Kang, Senior Economist at ING.

5. Political uncertainty grows in the UK

While Japan’s leadership emerges strengthened, political risk is rising in the UK. Prime Minister Keir Starmer is facing mounting scrutiny over the appointment of a senior ambassador linked to Jeffrey Epstein.

Over the weekend, Starmer’s chief of staff Morgan McSweeney resigned, taking responsibility for the decision to appoint Peter Mandelson as the UK’s ambassador to the United States. Newly released U.S. Justice Department files showed Mandelson shared government documents with Epstein, while Mandelson and his now husband received payments from the late American sex offender.

Markets are watching closely for potential fallout. If Starmer or UK Chancellor Rachel Reeves were replaced, “[t]he most likely longer-lasting influence is a loosening in fiscal policy that leads to higher gilt yields than otherwise and a weaker pound than otherwise,” said Ruth Gregory, Deputy Chief UK Economist at Capital Economics.