Stocks Hover Near Record Highs on Mixed US Economic News

The S&P 500 Index ($SPX) (SPY) today is up +0.10%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.36%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.34%.  March E-mini S&P futures (ESH26) are up +0.10%, and March E-mini Nasdaq futures (NQH26) are up +0.38%.

Stock indexes are mostly higher today, with the S&P 500 posting a new all-time high and the Nasdaq 100 posting a 3.5-week high.  The Dow Jones Industrial Average fell from a record high today, turning lower on mixed US economic news.  Signs of weakness in the US labor market have knocked bond yields lower and supported stocks after the Dec ADP employment report showed private employers added fewer jobs than expected, and the Nov JOLTS report showed fewer job openings than expected, a dovish factor for Fed policy.  The 10-year T-note yield is down -2 bp to 4.15%.

Also, today’s report showing a slower-than-expected increase in Eurozone Dec core consumer prices eased inflation concerns and sent European bond yields lower, with the UK 10-year gilt yield falling to a 1.75-month low and the 10-year German bund yield falling to a 1-month low. 

Also, signs of strength in the US service sector are positive for economic growth and supportive of stocks after the Dec ISM services index unexpectedly rose +1.8 to 54.4, stronger than expectations of a decline to 52.2 and the strongest pace of expansion in fourteen months.

The US MBA mortgage applications rose +0.3% in the week ended January 2, with the purchase mortgage sub-index down -6.2% and the refinancing mortgage sub-index up +7.4%.  The average 30-year fixed rate mortgage fell -7 bp to 6.25% from 6.32% in the prior week.

The US Dec ADP employment change increased by +41,000, weaker than expectations of +50,000.

US Nov JOLTS job openings fell -303,000 to a 14-month low of 7.146 million, showing a weaker labor market than expectations of 7.648 million.

US Oct factory orders fell -1.3% m/m, weaker than expectations of -1.2% m/m.

The market’s focus this week will be on US economic news.  On Thursday, Q3 nonfarm productivity is expected to climb by +4.7%, and unit labor costs are expected to rise by +0.3%. Also, initial weekly unemployment claims are expected to increase by 12,000 to 211,000.  On Friday, Dec nonfarm payrolls are expected to increase by +59,000, and the Dec unemployment rate is expected to slip by -0.1 to 4.5%.  Also, Dec average hourly earnings are expected to be up by 0.3% m/m and 3.6% y/y.  In addition, Oct housing starts are expected to increase by 1.4% m/m to 1.325 million, and Oct building permits are expected to rise by 1.1% m/m to 1.350 million. Finally, the University of Michigan's Jan consumer sentiment index is expected to climb by 0.6 points to 53.5. 

The markets are discounting the odds at 14% for a -25 bp rate cut at the FOMC’s next meeting on January 27-28.

Overseas stock markets are mixed today.  The Euro Stoxx 50 is down by -0.16%.  China’s Shanghai Composite climbed to a 10.5-year high and closed up by +0.05%.  Japan’s Nikkei Stock 225 closed down by -1.06%.

Interest Rates

March 10-year T-notes (ZNH6) today are up by +6 ticks.  The 10-year T-note yield is down -2.4 bp to 4.150%.  Signs of weakness in the US labor market are dovish for Fed policy and bullish for T-notes after today’s Dec ADP employment report showed private employers added fewer jobs than expected, and the Nov JOLTS report showed fewer job openings than expected.  Also, today’s weaker-than-expected Eurozone Dec CPI report knocked the 10-year German bund yield to a 1-month low and is providing carryover support to T-note prices. T-note prices fell from their best levels after the Dec ISM services index unexpectedly expanded at the strongest pace in fourteen months, a hawkish factor for Fed policy.     

European government bond yields are moving lower today.  The 10-year German bund yield dropped to a 1-month low of 2.792% and is down -2.8 bp to 2.814%.  The 10-year UK gilt yield fell to a 1.75-month low of 4.400% and is down -5.6 bp to 4.424%.

Eurozone Dec CPI rose +2.0% y/y, right on expectations.  Dec core CPI rose +2.3% y/y, weaker than expectations of +2.4% y/y.

German Nov retail sales unexpectedly fell -0.6% m/m, weaker than expectations of a +0.2% m/m increase and the biggest decline in 17 months.

Swaps are discounting a 1% chance of a +25 bp rate hike by the ECB at its next policy meeting on February 5.

US Stock Movers

Chip makers and data storage companies are under pressure today after their sharp rally on Tuesday. Western Digital (WDC) is down more than -7% to lead losers in the Nasdaq 100. Also, Seagate Technology Holdings (STX) is down more than -6%, and Marvel Technology (MRVL) is down more than -4%.  In addition, NXP Semiconductors NV (NXPI) is down more than -3%, and Microchip Technology (MCHP), Texas Instruments (TXN), Lam Research (LRCX), and Qualcomm (QCOM) are down more than -2%. 

Mining stocks are moving lower today, with silver down more than -5% and copper down more than -3%.  Hecla Mining (HL) is down more than -8%, and Coeur Mining (CDE) is down more than -5%.  Also, Barrick Mining (B) is down more than -3%, and Newmont Mining (NEM) and Freeport McMoRan (FCX) are down more than -1%.

Cybersecurity stocks are moving higher today. Crowdstrike Holdings (CRWD) is up more than +4%, and Palo Alto Networks (PANW) is up more than +3%.  Also, Zscaler (ZS) is up more than +2%, and Atlassian (TEAM) is up more than +1%.

Apogee Enterprises (APOG) is down more than -13% after cutting its full-year adjusted EPS forecast to $3.40-$3.50 from a previous estimate of $3.60-$3.90, weaker than the consensus of $3.66. 

Wolverine World Wide (WWW) is down more than -7% after Piper Sandler downgraded the stock to neutral from overweight. 

StoneCo Ltd (STNE) is down more than -5% after it announced that CEO Zinner will resign for personal reasons effective March 2026, and CFO Schere was appointed as successor. 

Deckers Outdoors (DECK) is down more than -4% after Piper Sandler downgraded the stock to underweight from neutral with a price target of $85.

JPMorgan Chase (JPM) is down more than -2% to lead losers in the Dow Jones Industrials after Wolfe Research LLC downgraded the stock to peer perform from outperform. 

AST SpaceMobile (ASTS) is down more than -2% after Scotia Bank downgraded the stock to underperform from sector perform with a price target of $45.60. 

Monte Rosa Therapeutics (GLUE) is up more than +52% after announcing positive interim data from an ongoing Phase 1 clinical study of its drug to treat elevated cardiovascular disease. 

Ventyx Biosciences (VTYX) is up more than +37% after the Wall Street Journal reported that Eli Lilly & Co. is in advanced talks to acquire the company for more than $1 billion. 

Strategy (MSTR) is up more than +4% after MSCI decided for now to keep digital asset treasury companies in its stock market indexes.

Amgen (AMGN) is up more than +3% to lead gainers in the Dow Jones Industrials after UBS upgraded the stock to buy from neutral with a price target of $380.

Bristol-Myers Squibb (BMY) is up more than +3% after UBS upgraded the stock to buy from neutral with a price target of $65.

Lowe’s (LOW) is up more than +2% after Barclays upgraded the stock to overweight from equal weight with a price target of $285.

Wayfair (W) is up more than +1% after Barclays upgraded the stock to overweight from equal weight with a price target of $123.

Earnings Reports(1/7/2026)

Albertsons Cos Inc (ACI), Constellation Brands Inc (STZ), Jefferies Financial Group Inc (JEF), MSC Industrial Direct Co Inc (MSM).