Stocks Turn Mixed as Software Stocks Slide

The S&P 500 Index ($SPX) (SPY) today is down -0.02%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.19%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.10%.  March E-mini S&P futures (ESH26) are down -0.08%, and March E-mini Nasdaq futures (NQH26) are up +0.13%.

Stock indexes gave up an early advance today and turned mixed, led by a selloff in software companies.  Also, today’s stronger-than-expected US Jan payrolls report pushed bond yields higher and dampened expectations for additional Fed interest rate cuts, weighing on stocks.  The 10-year T-note yield is up +3 bp to 4.17%, and the chance of a Fed rate cut at next month’s FOMC meeting fell to 8% from 23% before today’s payroll report. 

Stock indexes initially moved higher today, with the S&P 500 posting a 2-week high and the Nasdaq 100 posting a 1-week high.  Stocks found support on today’s better-than-expected monthly US jobs report that showed nonfarm payrolls increased more than expected last month by the most in 13 months, and the unemployment rate unexpectedly declined, signaling a stable labor market.

US MBA mortgage applications fell -0.3% in the week ended February 6, with the purchase mortgage sub-index down -2.4% and the refinancing mortgage sub-index up +1.2%.  The average 30-year fixed mortgage rate was unchanged from the prior week at 6.21%.

US Jan nonfarm payrolls rose +130,000, stronger than expectations of +65,000 and the most in 13 months.  The Jan unemployment rate unexpectedly fell -0.1 to 4.3%, showing a stronger labor market than expectations of no change at 4.4%.

US Jan average hourly earnings rose +3.7% y/y, right on expectations.

The annual benchmark revision to 2025 US payrolls 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 hold rates at a "somewhat restrictive" level.

The markets this week will focus on corporate earnings results and economic news.  On Thursday, initial weekly unemployment claims are expected to fall by -7,000 to 224,000.  Also, Jan existing home sales are expected to decline by -4.3% m/m to 4.16 million.  On Friday, Jan CPI is expected to be up +2.5% y/y, and Jan core CPI is expected to be up +2.5% y/y.

Q4 earnings season is in full swing, as more than half of the S&P 500 companies have reported earnings results.  Earnings have been a positive factor for stocks, with 78% of the 319 S&P 500 companies that have reported beating expectations.  According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth.  Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.

The markets are discounting an 8% chance for a -25 bp rate cut at the next policy meeting on March 17-18.

Overseas stock markets are mixed today.  The Euro Stoxx 50 is down -0.32%.  China’s Shanghai Composite climbed to 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 T-notes (ZNH6) today are down by -7 ticks.  The 10-year T-note yield is up +2.8 bp to 4.170%.  Mar T-notes fell from a 5-week high today, and the 10-year T-note yield rose from a 6-week low of 4.117%.  T-notes erased early gains today and retreated on the stronger-than-expected US Jan payroll report, which is hawkish for Fed policy.  Also, hawkish comments from Kansas City Fed President Jeff Schmid undercut T-note prices when he said the Fed should hold rates at a "somewhat restrictive" level.  In addition, supply pressures are bearish for T-notes as the Treasury will auction $42 billion of 10-year T-notes later today.    

European government bond yields are moving lower today.  The 10-year German bund yield fell to a 2-month low of 2.791% and is down -0.8 bp to 2.800%.  The 10-year UK gilt yield dropped to a 2-weeklow of 4.480% and is down -2.0 bp to 4.486%.

Swaps are discounting a 2% chance of a -25 bp rate cut by the ECB at its next policy meeting on March 19.

US Stock Movers

Strength in chip makers and AI-infrastructure stocks is supportive for the broader market.  Micron Technology (MU) is up more than +6% to lead gainers in the Nasdaq 100, and Microchip Technology (MCHP) is up more than +4%. Also, Lam Research (LRCX), Western Digital (WDC), KLA Corp (KLAC), NXP Semiconductors NV (NXPI), and Texas Instruments (TXN) are up more than +3%.  In addition, Applied Materials (AMAT), Analog Devices (ADI), and Intel (INTC) are up more than +2%.

Software stocks are falling today and weighing on the overall market.  Atlassian (TEAM) is down more than -6%, and Intuit (INTU) is down more than -5%.  Also, Workday (WDAY) and Autodesk (ADSK) are down more than -4%, and Salesforce (CRM) is down more than -4% to lead losers in the Dow Jones industrials.  In addition, Microsoft (MSFT), Adobe (ADBE), and Datadog (DDOG) are down more than -2%.

Teradata (TDC) is up more than +22% after reporting Q4 adjusted EPS of 74 cents, better than the consensus of 56 cents, and forecasting full-year adjusted EPS of $2.55 to $2.65, stronger than the consensus of $2.50.

Vertiv Holdings (VRT) is up more than +21% after forecasting full-year net sales of $13.25 billion to $13.75 billion, well above the consensus of $12.43 billion.

Generac Holdings (GNRC) is up more than +16% to lead gainers in the S&P 500 after forecasting a full-year Ebitda margin of 18% to 19%, the midpoint above the consensus of 18.1%.

Lattice Semiconductor (LSCC) is up more than +16% after forecasting Q1 revenue of $158 million to $172 million, well above the consensus of $148.1 million. 

Beta Technologies (BETA) is up more than +15% after Amazon.com disclosed a 5.1% stake in the company. 

GlobalFoundries (GFS) is up more than +13% after reporting Q4 net revenue of $1.83 billion, above the consensus of $1.80 billion. 

Cloudflare (NET) is up more than +8% after reporting Q4 revenue of $614.5 million, better than the consensus of $591.4 million, and forecasting full-year revenue of $2.79 billion to $2,80 billion, above the consensus of $2.74 billion. 

Gilead Sciences (GILD) is up more than +5% after reporting Q4 revenue of $7.93 billion, above the consensus of $7.71 billion.

AST SpaceMobile (ASTS) is up more than +2% after reporting a successful unfolding of its next-generation BlueBird 6 satellite. 

Mattel (MAT) is down more than -23% after reporting Q4 adjusted EPS of 39 cents, weaker than the consensus of 54 cents, and forecasting full-year adjusted EPS of $1.18 to $1.30, well below the consensus of $1.76. 

Rapid7 Inc (RPD) is down more than -25% after forecasting full-year revenue of $835 million to $843 million, weaker than the consensus of $869.8 million. 

Lyft (LYFT) is down more than -14% after reporting Q4 rides of 243.5 million, well below the consensus of 255.87 million. 

Robinhood Markets (HOOD) is down more than -11% to lead losers in the S&P 500 after reporting Q4 net revenue of $1.28 billion, below the consensus of $1.35 billion.

Moderna (MRNA) is down more than -10% after US regulators refused to review the company’s mRNA flu vaccine. 

Earnings Reports(2/11/2026)

Albemarle Corp (ALB), Ameren Corp (AEE), AppLovin Corp (APP), Cisco Systems Inc (CSCO), Equinix Inc (EQIX), Generac Holdings Inc (GNRC), Hilton Worldwide Holdings Inc (HLT), Humana Inc (HUM), International Flavors & Fragrances (IFF), Kraft Heinz Co/The (KHC), Martin Marietta Materials Inc (MLM), McDonald’s Corp (MCD), Motorola Solutions Inc (MSI), NiSource Inc (NI), Paycom Software Inc (PAYC), Rollins Inc (ROL), Shopify Inc (SHOP), Smurfit Westrock PLC (SW), T-Mobile US Inc (TMUS), Westinghouse Air Brake Technol (WAB).