Market Overview
The S&P 500 Index ($SPX) (SPY) has risen by +0.18%, while the Dow Jones Industrials Index ($DOWI) (DIA) increased by +0.46%. The Nasdaq 100 Index ($IUXX) (QQQ) is up by +0.15%. Additionally, March E-mini S&P futures (ESH26) climbed +0.17%, and March E-mini Nasdaq futures (NQH26) rose by +0.15%.
Market Drivers
Stock indices are trending upward today, with the Dow Jones Industrials reaching a record high. The market benefits from disappointing December retail sales and the Q4 employment cost index, which have pushed bond yields lower. This reinforces expectations for the Fed to resume interest rate cuts this year, with the 10-year T-note yield falling to a three-week low of 4.14%.
Consumer Spending Concerns
Despite the gains, stock increases are somewhat constrained due to stagnating US retail sales in December, indicating a potential slowdown in consumer spending. This downturn in retail sales may prompt a downward adjustment in Q4 GDP forecasts.
Employment Cost Index
The Q4 employment cost index increased by +0.7% quarter-over-quarter, which was below the anticipated +0.8% and marks the smallest rise in over four years. December retail sales showed no growth month-over-month, significantly lower than the expected +0.4% increase.
Focus on Earnings and Economic Indicators
Upcoming market scrutiny will center on corporate earnings and economic reports. Projections for January indicate nonfarm payrolls rising by +68,000, with the unemployment rate steady at 4.4%. Additionally, average hourly earnings are anticipated to grow by +0.3% month-over-month and +3.7% year-over-year.
International Market Trends
Global stock markets are also experiencing gains today, with the Euro Stoxx 50 achieving a record high, up by +0.03%. China’s Shanghai Composite Index closed at a one-week high, rising +0.13%, while Japan’s Nikkei 225 surged by +2.28%, reaching an all-time peak.
Key U.S. Stock Movements
Cybersecurity stocks saw gains today, with Atlassian increasing by over +4% and Zscaler and Cloudflare each rising by over +3%. In contrast, AI-infrastructure stocks faced pressure, with Western Digital falling by more than -8%. Spotify’s stock climbed over +17% after reporting record user growth in Q4, while Datadog surged by over +15% following a strong earnings report.
