Stocks Retreat as Tech Stocks Fall and the US Labor Market Weakens

The S&P 500 Index ($SPX) (SPY) today is down -1.30%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -1.25%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.49%.  March E-mini S&P futures (ESH26) are down -1.29%, and March E-mini Nasdaq futures (NQH26) are down -1.44%.

Stock indexes are falling sharply today as this week’s sell-off deepened, with the S&P 500 falling to a 1.5-month low and the Nasdaq 100 dropping to a 2.5-month low.  The sell-off in technology stocks persists, with Qualcomm down more than -8% to lead chip stocks lower after it forecasted weaker-than-expected Q2 revenue.  Also, Alphabet is down more than -4% to lead the Magnificent Seven technology stocks lower after it forecast full-year 2026 capital expenditures of $175 billion to $185 billion, well above the consensus of $119.5 billion, which may impact its free cash flow, several analysts said. 

Losses in stocks accelerated today by signs of weakness in the US labor market after Challenger’s January job cuts rose +117.8% y/y to 108,435, the largest amount of job cuts for a January since 2009.  Also, weekly initial unemployment claims rose by +22,000 to an 8-week high of 231,000, showing a weaker labor market than expectations of 212,000.  In addition, the US Dec JOLTS job openings unexpectedly fell -386,000 to a 5.25-year low of 6.542 million versus expectations of an increase to 7.250 million. 

Fed Governor Lisa Cook said she supported last week’s Fed decision to hold interest rates steady because she now sees “risks as tilted toward higher inflation.” She added that, “After nearly five years of above-target inflation, it is essential that we maintain our credibility by returning to a disinflationary path and achieving our target in the relatively near future.”

Bitcoin (^BTCUSD) is down more than -7% today to a 1.25-year low as negative momentum deepened across cryptocurrencies.  Bitcoin is down about 45% from its October record high, and inflows into US spot Bitcoin ETFs have reversed, with about $2 billion coming out of Bitcoin ETFs over the past month and more than $5 billion pulled out over the past three months, data compiled by Bloomberg show. 

The markets this week will focus on earnings and economic news. On Friday, the University of Michigan’s Jan consumer sentiment index is expected to fall by -1.4 points 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 81% of the 237 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 25% chance for a -25 bp rate cut at the next policy meeting on March 17-18.

Overseas stock markets today are lower.  The Euro Stoxx 50 is down by -1.19%.  China’s Shanghai Composite closed down -0.64%.  Japan’s Nikkei Stock 225 closed down -0.88%.

Interest Rates

March 10-year T-notes (ZNH6) today are up by +16 ticks.  The 10-year T-note yield is down -6.2 bp to 4.212%.   Mar T-notes rallied to a 2.5-week high today, and the 10-year T-note yield fell to a 1-week low of 4.208%.  Today’s stock slump is boosting safe-haven demand for government debt.  Gains in T-notes accelerated today on signs of weakness in the US labor market after Challenger job cuts soared, weekly initial unemployment claims rose more than expected to an 8-week high, and Dec JOLTS job openings unexpectedly fell to a 5.25-year low.  In addition, falling inflation expectations are supportive of T-notes as the 10-year breakeven inflation rate fell to a 1-week low of 2.318% today. 

European government bond yields are moving lower today.  The 10-year German bund yield is down -1.2 bp to 2.848%.  The 10-year UK gilt yield fell from a 2.5-month high of 4.597% and is down -0.8 bp to 4.538%.

Eurozone Dec retail sales fell -0.8% m/m, weaker than expectations of -0.4% m/m and the biggest decline in 2.25 years.

German Dec factory orders unexpectedly rose +7.8% m/m, stronger than expectations of -2.2% m/m decline and the largest increase in two years.

As expected, the ECB kept the deposit facility rate unchanged at 2.00% and said, “The economy remains resilient in a challenging global environment.  At the same time, the outlook is still uncertain, owing particularly to ongoing global trade policy uncertainty and geopolitical tensions.”

As expected, the BOE held its policy rate steady at 3.75% in a 5-4 vote.  BOE Governor Bailey said upside risks to inflation have diminished, and there should be scope for further policy easing if the economy and the inflation outlook evolve as expected.

Swaps are discounting a 0% chance of a +25 bp rate hike by the ECB at its next policy meeting on March 19.

US Stock Movers

Qualcomm (QCOM) is down more than -8% to lead losers in the Nasdaq 100 and chip stocks after forecasting Q2 revenue of $10.2 billion to $11.0 billion, weaker than the consensus of $11.18  billion. Also, Marvell Technology (MRVL) is down more than -3%, and Advanced Micro Devices (AMD), NXP Semiconductors NV (NXPI), and Western Digital (WDC) are down more than -2%.  In addition, Micron Technology (MU), Intel (INTC), and Microchip Technology (MCHP) are down more than -1%. 

The Magnificent Seven technology stocks are sliding today, weighing on the overall market.  Alphabet (GOOGL) is down more than -4% after forecasting full-year 2026 capital expenditures of $175 billion to $185 billion, well above the consensus of $119.5 billion, which may impact its free cash flow, according to several analysts.  Also, Amazon.com (AMZN) is down more than -4%, and Microsoft (MSFT) and Tesla (TSLA) are down more than -3%.  In addition, Nvidia (NVDA) is down -0.71%, Apple (AAPL) is down -0.69%, and Meta Platforms (META) is down -0.50%.

Cryptocurrency-exposed stocks are sharply lower today, with Bitcoin (^BTCUSD) down by more than -7% at a 1.25-year low.  Strategy (MSTR) is down by more than -12% to lead losers in the Nasdaq 100, and MARA Holdings (MARA) is down more than -10%.  Also, Coinbase Global (COIN) is down by more than -8%, and Galaxy Digital Holdings (GLXY) and Riot Platforms (RIOT) are down more than -5%. 

Fluence Energy (FLNC) is down more than -24% after reporting Q1 adjusted Ebitda loss of -$52.1 million, wider than the consensus of -$27.1 million. 

Estee Lauder (EL) is down more than -21% to lead losers in the S&P 500 after forecasting full-year adjusted EPS of $2.05 to $2.25, the midpoint below the consensus of $2.17. 

IQVIA Holdings (IQV) is down more than -8% after forecasting 2026 adjusted EPS of $12.55 to $12.85, below the consensus of $12.96.

Ares Management (ARES) is down more than -8% after reporting Q4 adjusted EPS of $1.45, weaker than the consensus of $1.68.

Cummins Inc (CMI) is down more than -7% after reporting Q4 EPS of $4.27, well below the consensus of $5.07.

Eli Lilly (LLY) is down more than -7% after Him & Hers said it will launch a copy of the Wegovy weight loss pill for $49 a month. 

Crown Castle (CCI) is down more than -6% after forecasting full-year adjusted Ebitda of $2.67 billion to $2.72 billion, weaker than the consensus of $2.85 billion. 

McKesson Corp (MCK) is up more than +16% to lead gainers in the S&P 500 after reporting Q3 adjusted EPS of $9.34, better than the consensus of $9.27, and boosting its full-year adjusted EPS estimate to $38.80 to $39.20 from a prior estimate of $38.35 to $38.85.

Corpay (CPAY) is up more than +11% after reporting Q4 revenue of $1.25 billion, better than the consensus of $1.23 billion.

Align Technology (ALGN) is up more than +10% after reporting Q4 adjusted EPS of $3.29, stronger than the consensus of $2.97. 

Hershey (HSY) is up more than +7% after reporting Q4 adjusted EPS of $1,71, above the consensus of $1.40, and forecasting full-year adjusted EPS of $8.20 to $8.52, well above the consensus of $7.07.   

ARM Holdings Plc (ARM) is up more than +4% to lead gainers in the Nasdaq 100 after New Street Research upgraded the stock to buy from neutral.

Tapestry (TPR) is up more than +3% after reporting Q2 net sales of $2.50 billion, better than the consensus of $2.32 billion. 

Bristol-Myers Squibb (BMY) is up more than +1% after reporting Q4 revenue of $12.50 billion, better than the consensus of $12.27 billion, and forecasting full-year revenue of $46 billion to $47.5 billion, well above the consensus of $44.16 billion. 

Earnings Reports(2/5/2026)

Amazon.com Inc (AMZN), Ares Management Corp (ARES), Atlassian Corp (TEAM), Bristol-Myers Squibb Co (BMY), Camden Property Trust (CPT), Cardinal Health Inc (CAH), Carrier Global Corp (CARR), Cigna Group/The (CI), CMS Energy Corp (CMS), ConocoPhillips (COP), Cummins Inc (CMI), Dayforce Inc (DAY), Digital Realty Trust Inc (DLR), Equity Residential (EQR), Estee Lauder Cos Inc/The (EL), Fortinet Inc (FTNT), Gen Digital Inc (GEN), Hershey Co/The (HSY), Huntington Ingalls Industries (HII), Intercontinental Exchange Inc (ICE), IQVIA Holdings Inc (IQV), KKR & Co Inc (KKR), Linde PLC (LIN), Mettler-Toledo International Inc (MTD), Microchip Technology Inc (MCHP), Molina Healthcare Inc (MOH), Monolithic Power Systems Inc (MPWR), News Corp (NWSA), Ralph Lauren Corp (RL), Regency Centers Corp (REG), Rockwell Automation Inc (ROK), Snap-on Inc (SNA), Strategy Inc (MSTR), Tapestry Inc (TPR), Thomson Reuters Corp (TRI), Ventas Inc (VTR), VeriSign Inc (VRSN), WEC Energy Group Inc (WEC), Xcel Energy Inc (XEL).