The S&P 500 Index ($SPX) (SPY) on Wednesday closed down -0.51%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.53%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.77%.  March E-mini S&P futures (ESH26) fell -0.44%, and March E-mini Nasdaq futures (NQH26) fell -1.69%.

Stock indexes settled mixed on Wednesday, with the S&P 500 falling to a 2-week low and the Nasdaq 100 dropping to a 7-week low.  Investors rotated out of high-flying chipmakers and AI-infrastructure stocks on Wednesday, which pressured the broader market.  Advanced Micro Devices plunged more than -17% to lead chipmakers lower after analysts said the company's Q1 sales forecast was seen as weak. 

On the positive side, Super Micro Computer closed up more than +13% after forecasting Q3 net sales well above expectations.  Also, Amgen closed up more than +8% to lead the Dow Jones Industrials higher after reporting stronger-than-expected Q4 revenue.

Wednesday's US economic news was mixed for stocks.  The Jan ADP employment change rose by +22,000, below expectations of +45,000.  Conversely, the Jan ISM services index was unchanged at 53.8, stronger than expectations of a decline to 53.5.

Market sentiment improved on Wednesday, following the end of the partial US government shutdown after President Trump signed a deal late Tuesday 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 on Wednesday 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 and economic news. On Thursday, initial weekly unemployment claims are expected to increase by 3,000 to 212,000.  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 10% chance for a -25 bp rate cut at the next policy meeting on March 17-18.

Overseas stock markets settled mixed on Wednesday.  The Euro Stoxx 50 closed down by -0.41%.  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) on Wednesday closed up +0.5 of a tick.  The 10-year T-note yield rose +0.8 bp to 4.274%.   T-notes settled little changed on Wednesday. Weakness in stocks was supportive for T-notes along with Wednesday's Jan ADP report that showed US companies added fewer jobs than expected, a dovish factor for Fed policy. 

Wednesday's stronger-than-expected Jan ISM services report was negative for T-note prices.  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.

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.

European government bond yields were mixed on Wednesday.  The 10-year German bund yield fell -3.2 bp to 2.859%.  The 10-year UK gilt yield rose +2.9 bp to 4.546%.

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

Chip makers and AI-infrastructure stocks sold off sharply on Wednesday, weighing on the broader market.  Advanced Micro Devices (AMD) closed down more than -17% to lead losers in the Nasdaq 100 after forecasting Q1 sales of $9.8 billion, plus or minus $300 million, below some projections of around $10 billion.  Also, Sandisk (SNDK) closed down more than -16%, and Micron Technology (MU) closed down more than -9%.  In addition, Lam Research (LRCX) closed down more than -8% and Western Digital (WDC) closed down more than -7%.  Finally, Applied Materials (AMAT) and Seagate Technology Holdings Plc (STX) closed down more than -6%, and Nvidia (NVDA), ASML Holding NV (ASML), KLA Corp (KLAC), and Broadcom (AVGO) closed down more than -3%. 

The plunge in Advanced Micro Devices bolstered concerns about AI demand and weighed on the makers of power equipment and data-center products.  Amphenol (APH) closed down more than -11%, and Vistra Corp (VST) and Constellation Energy (CEG) closed down more than -6%.  Also, GE Vernova (GEV) closed down more than -4%, and Vertiv Holdings (VRT) and Hubbell (HUBB) closed down more than -3%.  

Cryptocurrency-exposed stocks moved lower on Wednesday after Bitcoin (^BTCUSD) fell by more than -3%.  Galaxy Digital Holdings (GLXY) and MARA Holdings (MARA) closed down more than -8%, and Riot Platforms (RIOT) closed down more than -7%.  Also, Coinbase Global (COIN) closed down by more than -6%, and Strategy (MSTR) closed down by more than -2%. 

Boston Scientific (BSX) closed down more than -17% 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.

Cencora Inc (COR) closed down more than -8% after reporting Q1 revenue of $85.93 billion, below the consensus of $86.18 billion. 

T Rowe Price Group (TROW) closed down more than -5% after reporting Q4 adjusted EPS of $2.44, weaker than the consensus of $2.47.

Uber Technologies (UBER) closed down more than -4% after forecasting Q1 adjusted EBITDA of $2.37 to $2.47, the midpoint below the consensus of $2.45. 

Silicon Laboratories (SLAB) closed up more than +49% after agreeing to be acquired by Texas Instruments for $7.5 billion, or $231 in cash per share. 

Super Micro Computer (SMCI) closed up more than +13% 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.

Eli Lilly (LLY) closed up more than +10% 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.

Fortive Corp  (FTV) closed up more than +10% after forecasting 2026 adjusted EPS of $2.90 to $3.00, stronger than the consensus of $2.85.

Amgen (AMGN) closed up more than +8% to lead gainers in the Dow Jones industrials after reporting Q4 revenue of $9.87 billion, better than the consensus of $9.46 billion. 

MGM Resorts International closed up more than +8% after reporting its BetMGM joint venture had $2.8 billion in net revenue for fiscal year 2025, up +33% y/y.

Johnson Controls International Plc (JCI) closed up more than +4% after reporting Q1 net sales of $5.80 billion, stronger than the consensus of $5.64 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).

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