The S&P 500 Index ($SPX) (SPY) on Thursday closed down -1.57%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -1.34%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -2.04%. March E-mini S&P futures (ESH26) fell -1.55%, and March E-mini Nasdaq futures (NQH26) fell -2.02%.
Stock indexes gave up an early advance and sold off sharply on Thursday as the Magnificent Seven technology stocks retreated, weighing on the broader market. Also, Cisco Systems fell more than -12% after saying that higher memory-chip prices are expected to eat into its profitability. In addition, trucking and logistics companies fell sharply amid the threat of AI on future earnings.
Lower bond yields were supportive of stocks, as the 10-year T-note yield fell to a 2.25-month low of 4.10% after weekly jobless claims fell less than expected and Jan existing home sales fell more than expected to a 16-month low.
US weekly initial unemployment claims fell -5,000 to 227,000, showing a slightly weaker labor market than expectations of 223,000.
US Jan existing home sales fell -8.4% m/m to a 16-month low of 3.91 million, weaker than expectations of 4.5 million.
The markets this week will focus on corporate earnings results and economic news. 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 two-thirds of the S&P 500 companies have reported earnings results. Earnings have been a positive factor for stocks, with 76% of the 358 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 a 9% chance for a -25 bp rate cut at the next policy meeting on March 17-18.
Overseas stock markets settled mixed on Thursday. The Euro Stoxx 50 fell from a new all-time high and closed down by -0.40%. China’s Shanghai Composite closed up +0.05%. Japan’s Nikkei Stock 225 fell from a record high and closed down by -0.02%.
Interest Rates
March 10-year T-notes (ZNH6) on Thursday closed up by +16.5 ticks. The 10-year T-note yield fell -6.8 bp to 4.104%. Mar T-notes rallied to a 1.75-month high on Thursday, and the 10-year T-note yield fell to a 2.25-month low of 4.098%. T-notes moved higher on Thursday after weekly US jobless claims fell less than expected and Jan existing home sales fell more than expected to a 16-month low, both of which are dovish for Fed policy. T-notes added to their gains after the selloff in stocks sparked safe-haven demand for government debt securities. T-notes raced to their highs Thursday afternoon on strong demand for the Treasury’s $25 billion auction of 30-year T-bonds that had a bid-to-cover ratio of 2.66, well above the 10-auction average of 2.37 and an 8-year high.
European government bond yields moved lower on Thursday. The 10-year German bund yield dropped to a 2.25-month low of 2.775% and finished down -1.4 bp to 2.779%. The 10-year UK gilt yield fell to a 3-week low of 4.443% and finished down -2.4 bp to 4.452%.
UK Q4 GDP rose +0.1% q/q and +1.0% y/y, weaker than expectations of +0.2% q/q and +1.2% y/y.
UK Dec manufacturing production fell -0.5% m/m, weaker than expectations of-0.1% m/m.
Swaps are discounting a 3% chance of a -25 bp rate cut by the ECB at its next policy meeting on March 19.
US Stock Movers
The Magnificent Seven technology stocks sold off on Thursday, weighing on the overall market. Apple (AAPL) closed down more than -5%, and Amazon.com (AMZN), Meta Platforms (META), and Tesla (TSLA) closed down more than -2%. Also, Nvidia (NVDA) closed down more than -1%, Microsoft (MSFT) closed down -0.66%, and Alphabet (GOOGL) closed down -0.64%.
Trucking and logistics companies retreated on Thursday amid fears of disruption from artificial intelligence. Landstar Systems (LSTR) closed down more than -15%, and CH Robinson Worldwide (CHRW) closed down more than -14%. Also, Expeditors International of Washington (EXPD) closed down more than -13%, and XPO Inc (XPO) closed down more than -5%. In addition, JB Hunt Transport Services (JBHT) and Old Dominion Freight Line (ODFL) closed down more than -4%, and Covenant Logistics Group (CVLG) closed down more than -3%.
Cryptocurrency-exposed stocks fell on Thursday after Bitcoin (^BTCUSD) declined by more than -3%. Coinbase Global (COIN) closed down more than -7%, and MARA Holdings (MARA) and Riot Platforms (RIOT) closed down more than -4%. Also, Strategy (MSTR) closed down more than -2%, and Galaxy Digital Holdings (GLXY) closed down more than -1%.
ICON Plc (ICLR) closed down more than -39% after saying the audit committee launched an internal investigation into its accounting practices, which, in preliminary findings, indicated revenue may have been overstated “by less than 2%” in fiscal years 2023 and 2024.
Baxter International (BAX) closed down more than -15% after forecasting 2026 organic sales growth to be about flat.
Tyler Technologies (TYL) closed down more than -15% after reporting Q4 total revenue of $575.2 million, weaker than the consensus of $590.8 million.
Cisco Systems (CSCO) closed down more than -12% to lead losers in the Dow Jones Industrials after forecasting Q3 adjusted gross margin of 65.5% to 66.5%, weaker than the consensus of 68.2%.
Rollins (ROL) closed down more than -10% after reporting Q4 revenue of $912.9 million, weaker than the consensus of $927.3 million.
Check Point Software Technologies Ltd (CHKP) closed down more than -6% after reporting Q4 revenue of $744.9 million, weaker than the consensus of $746.3 million.
Cognex Corp (CGNX) closed up more than +37% after reporting Q4 revenue of $252.3 million, well above the consensus of $239.6 million, and forecasting Q1 revenue of $235 million to $255 million, stronger than the consensus of $230.4 million.
Equinix (EQIX) closed up more than +10% to lead gainers in the S&P 500 after forecasting a full-year Ebitda of $5.14 billion to $5.22 billion, above the consensus of $5.02 billion.
Zebra Technologies (ZBRA) closed up more than +8% after reporting Q4 net sales of $1.48 billion, better than the consensus of $1.47 billion.
Motorola Solutions (MSI) closed up more than +7% after reporting Q4 adjusted EPS of $4.59, better than the consensus of $4.35, and forecasting 2026 adjusted EPS of $16.70 to $16.85, well above the consensus of $16.27.
Viking Therapeutics (VKTX) closed up more than +7% after it said it plans to advance its oral obesity drug to Phase 3 in the third quarter of this year.
Exelon (EXC) closed up more than +6% to lead gainers in the Nasdaq 100 after reporting Q4 operating income of $1.19 billion, better than the consensus of $1.03 billion.
Howmet Aerospace (HWM) closed up more than +6% after reporting Q4 revenue of $2.17 billion, above the consensus of $2.13 billion, and forecasting Q1 revenue of $2.23 billion to $2.25 billion, stronger than the consensus of $2.16 billion.
Sandisk (SNDK) closed up more than +5% after Japanese chipmaker Kioxia forecasted higher demand for Sandisk’s NAND memory chips.
Earnings Reports(2/13/2026)
Air Lease Corp (AL), Moderna Inc (MRNA), Seaboard Corp (SEB), Trump Media & Technology Group (DJT), Wendy's Co/The (WEN).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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