Market Update
- Equities extending yesterday's bounce
- Mega-cap tech and AI disruption stocks bouncing back
- Another solid round of economic data
- Commodities moving higher on geopolitical concerns
- Check out some of the recent ICE Data/Content:
- Inside The ICE House
- Podcast History Series - The Pneumatic Tube Network That Connected the NYSE
- ETF Central: Goldman Sachs Asset Management Chief Transformation Officer Bryon Lake
- February 2026 ICE Mortgage Monitor Report: Early-January Rate Decline Unlocks Refinance Opportunity for Nearly 5 Million Homeowners
- Market Story Lines
MAC Desk Commentary:
Coming out of the long holiday weekend, major US indices ended the trading session around unchanged, but it was a volatile day. Futures were pointing to a lower open but improved after the ADP Weekly jobs number came in ahead of expectations and some positive commentary coming out of the US/Iran negotiations. After the open, the S&P 500 broke below its 100d ma (~6,812) and retested the late July/early February lows ~6,780 before bouncing about 1.5% off the lows. Before bouncing the peak to trough decline in the NYSE FANG+ index was nearly 20%. There was some modest outperformance in some of the mega-cap tech stocks but software (IGV -2.2%) stocks which have been ground zero for the AI disruption trade remained under pressure. Financials, which got hit for ~5% last week, did bounce back leading to the upside with the sector ending up ~1%. The energy and materials sectors both fell >1% as commodities came under some pressure with the USD bounce and comments coming out of the US/Iran negotiations. Staples, which had benefited from some defensive posturing recently, were hit following some disappointing commentary from an industry conference, as well as HHS Secretary Kennedy’s appearance Sunday on 60 Minutes, before he got his pump on with Kid Rock, in which he criticized ultra-processed foods,
Overnight futures were pointing to a higher open but faded back to unchanged heading into the opening bell. This week is options expiration with VIX futures expiring today which seems to be adding to some of the volatility. After opening around unchanged equities moved higher with the S&P 500 initially pausing right around yesterday’s high (~6,860) before accelerating to the upside and trading back up to ~6,900 just over the 50d ma. Mega-cap tech and financials both continue to move higher in today’s session. Meta (flat) and Nvidia (+2.5%) announced an expanded partnership, with Nvidia supplying millions of Blackwell and Rubin GPUs, along with CPUs and networking products for Meta’s data centers. This is helping mega-cap tech bounce and AI infrastructure stocks. Software is also moving higher despite mixed earnings (CDNS +9%/PANW -5%). Earnings from other companies have been caught up in the AI disruption trade are being well received including Moody’s (+6%), Verisk Analytics (+3%) and Jones Lang Lasalle (+5%) which is also helping overall sentiment. As we head to print, the S&P 500 is up 61pts to 6,904 (+0.9%), the Dow is up 304pts to 49,837 (+0.6%), while the Russell 2k is up 30pts to 2,676 (+1.1%).
Global markets were higher overnight though much of Asia remained closed for the Lunar New Year. In Japan the Nikkei was up ~1%, President Trump announced that the first three projects in the $550B US-Japan trade agreement are proceeding: a gas-powered plant in Ohio, a Gulf Coast LNG facility and a critical minerals plant in Georgia. Commerce Secretary Lutnick later clarified that the LNG project was actually a deepwater oil facility. Not an energy expert but they should probably make sure they reach consensus on that one. Most European indices closed up ~1%. The FTSE 100 set a new all-time high as UK CPI came in about inline but eased from last month. The FT reported that ECB President Lagarde may step down before her term ends in 2027 ahead of elections to allow French President Macron and German Chancellor Merz to have influence on the process.
Economic data in the US was reasonably positive. Housing Starts and Building Permits both rose from last month and exceeded expectations. Housing related stocks are trading modesty higher despite a backup in yields. December Advanced Durable Goods Orders fell 1.4%, less than expected and coming off November’s 5.4% increase. Capital goods orders (Non-defense, ex-aircraft) a proxy for business spending rose 0.6% above consensus. Just ahead of the open January industrial production and capacity utilization both improved from the prior month. Today’s data and the recent increase in ISM manufacturing suggests we could be seeing an upturn in industrial/manufacturing activity. Treasury yields are moving slightly higher, but the move may be dampened by some of the escalating geopolitical concerns. The USD index was modestly higher overnight and extended to the upside following the data.
Government Yields
- US 2yr +1bps to 3.46%, 5yr +2bps to 3.65%, 10yr +1bps to 4.07%, 30yr +0bps to 4.69%
- USD index: +$0.36 to $97.43
This afternoon the Fed Minutes will be released but shouldn’t be very controversial as Chair Powell said there was broad support for keeping rates unchanged at the last meeting there is also a 20yr auction at 1:00. Looking ahead to tomorrow the economic data includes claims, trade balance and pending home sales.
Earnings:
- After-Market: AGI, AWK, AMPL, CAR, BKNG, BTG, BHC, CVNA, CF, CAKE, CDE, CRH, CYH, DASH, EIX, FIG, HST, INVH, JACK, KAI, MATV, MCW, TAP, NDSN, OBDC, OTF, OXY, OMC, TPL, TS, TROX, WH
- Pre-Market: CHH, CNP, COLD, CWK, DE, EPAM, ETSY, EVRG, FTI, FUN, GATX, ITGR, LKQ, LMND, NABL, POOL, PWR, SO, THRM, TRGP, VAL, VC, W, WMT, YETI
- After-Market: AKAM, ALRM, AMH, AMN, AXTI, CARG, CC, CENX, CWST, DBX, ED, EIG, EXR, FND, GH, GLPI, HLIT, IRTC, LNT, LZ, NEM, OLED, OPEN, PK, PTCT, SEM, SFM, ST, TNDM, TXRH, WSC
US:
- MBA Mortgage Applications: -2.7% vs prior -2.4%
- Refis: 7.1% vs prior 1.2%
- Housing Starts: 1.404M vs 1.33M cons, prior 1.322M
- Building Permits: 1.448M vs 1.40M cons, prior 1.388M
- Durable Goods m.m: -1.4% vs -2.0% cons, prior 5.4%
- Ex-transports: 0.9% vs 0.3% cons, prior 0.4%
- Ex-defense: -2.5% vs prior 6.6%
- Non-defense, ex-aircraft: 0.6% vs 0.4% cons, prior 0.8%
- NY Fed Services Index: -25.7 vs prior -16.1
- Industrial Production: 0.7% vs. 0.4% cons., prior 0.2%
- Capacity Utilization: 76.2% vs. 76.5% cons., prior 75.7%
- Fed Speeches: 1:00pm Fed Bowman
- 1:00pm 20y auction
- 2:00pm FOMC Minutes
- 4:00pm TIC Flows
- Japan Tankan Manufacturing Sentiment: 13 vs prior 7
- Services: 25 vs prior 32
- Japan Exports y.y: 16.8% vs 13.0% cons, prior 5.1%
- Japan Imports y.y: -2.5% vs 3.5% cons, prior 5.2%
- UK CPI y.y: 3.0% vs 3.0% cons, prior 3.4%
- UK Core CPI: 3.1% vs 3.1% cons, prior 3.2%
