OPENING CALL
Stock futures pointed to a mostly lower open Wednesday after financial stocks came under pressure in the prior session, weighing on both the S&P 500 and the Nasdaq which closed down.
Tuesday's selloff was triggered by investors unnerved by the growing threats of artificial intelligence on a sector that had previously been seen as a beneficiary of the rotation out of software and AI stocks.
"We see this development as entirely expected in light of advances in AI capability and recent product launches in adjacent industries," RBC Capital Markets said, adding that the share price reaction was likely due to short-term-focused positioning in the market
Though big names are expected to report earnings today including McDonald's, Cisco Systems and Kraft Heinz, focus will be on the January nonfarm payrolls report after data Tuesday showed unexpected consumer weakness .
Analysts in The Wall Street Journal's poll expect 55,000 jobs to have been added in January , a little above 50,000 in the previous month.
Elsewhere, Trump and Israeli Prime Minister Benjamin Netanyahu will meet in Washington to discuss the nuclear talks taking place between the U.S. and Iran.
Economic Insight
Jefferies continues to expect two 25 basis-point interest-rate cuts by the Federal Reserve this year.
That comes as the Dallas Federal Reserve President Lorie Logan said she believes the Fed's interest-rate stance is well placed for the risks facing the economy.
Cleveland Fed President Beth Hammack, meanwhile, said she believes monetary policy is in a good place for rates to stay on hold.
Stocks to Watch
AST SpaceMobile shares rose 4% after the company said the BlueBird 6 satellite had successfully unfolded.
Halliburton and SLB shares rose 1.1%% and 0.12% respectively after the Trump administration allowed U.S. companies to supply Venezuela with equipment and technology needed for oil production.
Moderna shares fell 8.8% after the Food and Drug Administration refused to review its application to sell a new seasonal flu vaccine.
Watch For:
U.S. Employment Report for January; EIA Weekly Petroleum Status Report; Canada Building Permits for December; Federal Reserve Bank of Kansas City President Jeffrey Schmid speaks before the Economic Forum of Albuquerque; Federal Reserve Vice Chair Michelle Bowman speaks at Keefe, Bruyette & Woods Winter Financial Services Conference; Federal Reserve Bank of Cleveland President Beth Hammack speaks at John Glenn College of Public Affairs event
Today's Top Headlines/Must Reads:
- American Airlines Is Struggling, and Its Crew Members Have Lost Patience
- Europe Needs to Learn Its Lesson: Stop Relying on Imported Energy
- U.S. Weighs Seizing Tankers Carrying Iranian Oil to Pressure Tehran
MARKET WRAPS
Forex:
The dollar fell against most other currencies as weak U.S. retail sales data bolstered Federal Reserve rate-cut prospects.
"The U.S. consumer spending may be weakening for real this time," Swissquote said. "Massive AI investment will certainly continue to do the heavy lifting, but it won't necessarily create jobs on a net basis. If that's the case, the two-speed growth in the U.S. will require the Federal Reserve's support to feel better."
Following Tuesday's worse-than-expected U.S. retail sales data, "skepticism could prevail in the market" and cause the dollar to fall in the event of weak job figures, Commerzbank said.
The euro , meanwhile, rose against the dollar.
Sterling gained against the euro but the currency was at risk of renewed falls against the euro as U.K. political concerns persist and the Bank of England is likely to cut interest rates further, ING said.
"Polymarket continues to show a 70% probability of [U.K. Prime Minister Keir Starmer] resigning by June 30, and concerns about a less centrist Labour successor carry quite a bit of risk for sterling, given the potential fiscal implications."
Bitcoin fell to its lowest level since last Friday's selloff as investor sentiment in cryptocurrencies remained weak.
Bonds:
Treasury yields traded marginally lower ahead of the January employment figures.
"We expect the overall picture to continue to point to a tepid development of the U.S. labor market," SEB said.
As the 10-year Treasury yield edged lower, Treasurys are seen as a key portfolio diversifier , currently trading around fair value level. Russell Investments said this makes bonds of other major countries potentially more attractive adding that it sees more opportunities in non-U.S. sovereign bonds, such as U.K. gilts, Australian and Canadian government bonds.
Data has shown foreign investor allocations at Treasury auctions rising in recent months, according to TD Securities. Foreign Treasury auction allotments have been rebounding for some time and allotments in both November and December jumped significantly.
"This hints that elevated term premium may be driving additional demand for Treasurys even as risks abound."
Term premium has helped drive 10-year Treasury yields higher since late 2025, TD Securities added.
"This hints that term premium could remain elevated even as yields decline if growth and Fed expectations slip."
Energy:
Oil prices rose, supported by uncertainty over the direction of U.S.-Iran talks.
"Geopolitical developments continue to dominate price action," ING said.
Natural Gas
Natural gas prices rose and Commerzbank said as inventories across the European Union risked falling below 20% of capacity by the end of winter if depletion rates remained at current levels.
Metals:
Gold prices rose in early trading as the latest U.S. economic data bolstered the case for further interest-rate cuts this year.
"While some policymakers have signaled patience on rates, expectations of potential easing remain a supportive factor for gold," MUFG said.
Copper
Copper prices rose in early trading but spot demand remained under pressure from softer Chinese buying and elevated prices, while inventories across Asia continue to build.
"Near-term trading is likely to remain subdued until after the Lunar New Year, with price direction hinging on the pace of post-holiday restocking in China. Broader macro sentiment and expectations for Fed easing will also be key drivers for metals in the weeks ahead," ING said.
TODAY'S TOP HEADLINES
Nvidia's Jensen Huang loves this software maker that just issued a crippling profit warning
Dassault Systemes, a software company that Nvidia's Jensen Huang says is at the center of the next industrial frontier of AI, saw its shares lose a fifth of its value on Wednesday after a profit warning.
Dassault said its profit rose 6% to EUR436.9 million ($521 million), or 33 cents a share, while revenue fell 4% to EUR1.68 billion. On an adjusted basis, its EPS was 40 cents.
NetEase Net Profit Falls Despite Higher Revenue
Chinese videogame giant NetEase recorded lower net profit in the final quarter of 2025, partly due to a high base.
Net profit fell 29% from a year earlier to 6.24 billion yuan, equivalent to $902.9 million, missing the 8.26 billion yuan expected in a FactSet poll of analysts. Its adjusted net profit, a closely watched metric that excludes share-based compensation expenses, declined 27%.
Heineken Plans Thousands of Job Cuts to Weather Beer-Market Headwinds
Heineken aims to slash thousands of jobs to reduce costs as it grapples with weak beer-market trends.
As part of a plan to save hundreds of millions of euros a year, the Dutch brewer said Wednesday that it would cut between 5,000 and 6,000 roles over the next two years, or up to 7% of its current workforce.
Ahold Delhaize Shares Jump After Growth in U.S. Online Sales
Shares in grocery retailer Ahold Delhaize jumped after the Dutch multinational's sales and operating profit rose in the fourth quarter, boosted by online sales in the U.S. despite political uncertainty.
Ahold Delhaize shares gained 7.6% to 37.4 euros in morning European trading.
China's Consumer Inflation Eases, Producer Prices Stay in Decline
China's consumer inflation eased at the start of 2026 after reaching a near three-year high in December, as food prices declined.
The consumer-price index rose 0.2% in January from a year earlier, slowing from December's 0.8% gain, the National Bureau of Statistics said Wednesday. Economists polled by The Wall Street Journal had forecast a 0.4% increase.
Volatility Is Out, Stability Is In for Treasuries. What It Means for Stocks and Economy.
The U.S. debt market has been awfully steady lately. It's a blessing for the economy and stocks.
The 10-year Treasury note-a key debt issued by the U.S. government-has seen its yield move up or down only as much as 0.39 percentage points over the past six months. It's the narrowest trading range since October 2018, according to Dow Jones Market data team.
U.S. Weighs Seizing Tankers Carrying Iranian Oil to Pressure Tehran
Trump administration officials have discussed whether to seize additional tankers involved in transporting Iranian oil but have held off, concerned about Tehran's near-certain retaliation and the impact on global oil markets, U.S. officials said.
The U.S. has seized several ships that have carried Iranian oil as part of its two-month-old blockade of sanctioned tankers serving Venezuela. The tankers, which make up the so-called shadow fleet, help transport illicit oil from numerous sanctioned countries to China and other buyers.
Nine Killed and at Least 25 Injured in Canada Shooting
Nine people were killed Tuesday in a mass shooting in British Columbia and at least 25 people were injured, according to authorities.
(MORE TO FOLLOW) Dow Jones Newswires
02-11-26 0617ET
