Stocks Mixed on Sector Rotation out of Tech

The S&P 500 Index ($SPX) (SPY) today is up +0.08%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.54%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.56%.  March E-mini S&P futures (ESH26) are up +0.08%, and March E-mini Nasdaq futures (NQH26) are down -0.60%.

Stock indexes are wavering today on some mixed corporate earnings results and rotation out of technology stocks.  Super Micro Computer is up more than +15% after forecasting Q3 net sales well above expectations.  However, Advanced Micro Devices is down more than -13% after analysts said the company's Q1 sales forecast was seen as weak.   Data service and software stocks are also falling for a second day today following the release of an automation tool for lawyers by artificial intelligence firm Anthropic.

Stocks were also pressured by signs of weakness in the US labor market, after the Jan ADP employment change rose by +22,000, below expectations of +45,000.

Market sentiment improved today, following the end of the partial US government shutdown after President Trump late Tuesday signed a deal to fund the government.  The funding package only funds the Department of Homeland Security through February 13, while the rest of the government is funded through September 30, the end of the fiscal year.   

The Treasury today announced that next week's quarterly refunding will total $125 billion in sales of T-notes and T-bonds, right on expectations, and said it anticipates keeping auction sizes unchanged for nominal notes, bonds, and floating-rate notes "for at least the next several quarters."

US MBA mortgage applications fell -8.9% in the week ended January 30, with the purchase mortgage sub-index down -14.4% and the refinancing sub-index down -4.7%.  The average 30-year fixed rate mortgage fell -3 bp to 6.21% from 6.24% in the prior week.

The markets this week will focus on earnings, economic news, and the passage of a spending bill to end the partial government shutdown.  Later today, the Jan ISM services index is expected to fall by -0.3 to 53.5.  On Thursday, initial weekly unemployment claims are expected to increase by 3,000 to 212,000.  On Friday, the University of Michigan Jan consumer sentiment index is expected to fall -1.4 to 55.0.   

Q4 earnings season is in full swing, with 150 of the S&P 500 companies scheduled to report earnings this week.  Earnings have been a positive factor for stocks, with 80% of the 195 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 10% 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 up by +0.11%.  China's Shanghai Composite closed up +0.85%.  Japan's Nikkei Stock 225 closed down -0.78%.

Interest Rates

March 10-year T-notes (ZNH6) today are down by -3 ticks.  The 10-year T-note yield is up +1.4 bp to 4.280%.  T-notes also have some negative carryover from last Friday when President Trump nominated Keven Warsh as the next Fed Chair.  Mr. Warsh is seen as more hawkish than other Fed Chair candidates and often emphasized inflation risks during his tenure as a Fed Governor from 2006-2011. Also, supply pressures should limit the near-term upside in T-notes as the Treasury will auction $125 billion of T-notes and T-bonds in next week's quarterly refunding auctions.  Losses in T-notes are limited after today's Jan ADP report showed US companies added fewer jobs than expected, a dovish factor for Fed policy.

European government bond yields are mixed today.  The 10-year German bund yield is down -2.2 bp to 2.869%. The 10-year UK gilt yield is up +0.3 bp to 4.520%.

The Eurozone Jan core CPI was revised downward by -0.1 to +2.2% y/y from the previously reported +2.3% y/y, the smallest pace of increase in four years.

The Eurozone Jan S&P composite PMI was revised downward by -0.2 to 51.3 from the previously reported 51.5.

Eurozone Dec PPI fell -0.3% m/m and -2.1% y/y, right on expectations, with the -2.1% y/y fall the steepest year-over-year decline in 14 months.

Swaps are discounting a 1% chance of a +25 bp rate hike by the ECB at Thursday's policy meeting.

US Stock Movers

Data service and software stocks are falling for a second day today following the release of an automation tool for lawyers by artificial intelligence firm Anthropic.  Intuit (INTU) is down more than -4%, and Salesforce (CRM) is down by more than -3% to lead losers in the Dow Jones Industrials.  Also, EPAM Systems (EPAM) and FactSet Research Systems (FDS) are down by more than -3%.  In addition, Thomson Reuters Corp (TRI), ServiceNow (NOW), and Adobe (ADBE) are down by more than -2%. 

Silicon Laboratories (SLAB) is up more than +50% after agreeing to be acquired by Texas Instruments for $7.5 billion, or $231 in cash per share. 

Super Micro Computer (SMCI) is up more than +15% to lead gainers in the S&P 500 after forecasting Q3 net sales of at least $12.30 billion, well above the consensus of $10.25 billion.

MGM Resorts International is up more than +12% after reporting its BetMGM joint venture had $2.8 billion in net revenue for fiscal year 2025, up +33% y/y.

Sonos (SONO) is up more than +13% after reporting Q1 revenue of $545.7 million, better than the consensus of $535.5 million.

Fortive Corp  (FTV) is up more than +9% after forecasting 2026 adjusted EPS of $2.90 to $3.00, stronger than the consensus of $2.85.

Lumentum (LITE) is up more than +9% after reporting Q2 adjusted EPS of $1.67, stronger than the consensus of $1.41, and forecasting Q2 adjusted EPS of $2.15 to $2.35, well above the consensus of $1.59.

Johnson Controls International Plc (JCI) is up more than +8% after reporting Q1 net sales of $5.80 billion, stronger than the consensus of $5.64 billion. 

Eli Lilly (LLY) is up more than +6% after reporting Q4 revenue of $19.29 billion, stronger than the consensus of $18.01 billion, and forecasting full-year revenue of $80 billion to $83 billion, above the consensus of $77.71 billion.

Amgen (AMGN) is up more than +3% to lead gainers in the Dow Jones industrials after reporting Q4 revenue of $9.87 billion, better than the consensus of $9.46 billion. 

Boston Scientific (BSX) is down more than -15% to lead losers in the S&P 500 after forecasting full-year adjusted EPS of $3.43 to $3.49, the midpoint below the consensus of $3.47.

Advanced Micro Devices (AMD) is down more than -13% after forecasting Q1 sales of $9.8 billion, plus or minus $300 million, below some projections of around $10 billion. 

T Rowe Price Group (TROW) is down more than -8% after reporting Q4 adjusted EPS of $2.44, weaker than the consensus of $2.47.

Cencora Inc (COR) is down more than -6% after reporting Q1 revenue of $85.93 billion, below the consensus of $86.18 billion. 

Uber Technologies (UBER) is down more than -6% after forecasting Q1 adjusted EBITDA of $2.37 to $2.47, the midpoint below the consensus of $2.45. 

Earnings Reports(2/4/2026)

AbbVie Inc (ABBV), Aflac Inc (AFL), Align Technology Inc (ALGN), Allstate Corp/The (ALL), Alphabet Inc (GOOGL), ARM Holdings PLC (ARM), AvalonBay Communities Inc (AVB), Avery Dennison Corp (AVY), Bio-Techne Corp (TECH), Boston Scientific Corp (BSX), Bunge Global SA (BG), CDW Corp/DE (CDW), Cencora Inc (COR), CME Group Inc (CME), Cognizant Technology Solutions (CTSH), Corpay Inc (CPAY), Crown Castle Inc (CCI), Cummins Inc (CMI), Eli Lilly & Co (LLY), Equifax Inc (EFX), Essex Property Trust Inc (ESS), Everest Group Ltd (EG), Fortive Corp (FTV), Fox Corp (FOXA), GE HealthCare Technologies Inc (GEHC), Globe Life Inc (GL), IDEX Corp (IEX), Johnson Controls International (JCI), McKesson Corp (MCK), MetLife Inc (MET), Mid-America Apartment Communities (MAA), Old Dominion Freight Line Inc (ODFL), Omnicom Group Inc (OMC), O'Reilly Automotive Inc (ORLY), Phillips 66 (PSX), PTC Inc (PTC), QUALCOMM Inc (QCOM), Stanley Black & Decker Inc (SWK), STERIS PLC (STE), T Rowe Price Group Inc (TROW), Uber Technologies Inc (UBER), Yum!  Brands Inc (YUM).