U.S. stocks mixed, Dow continues to hit new highs, U.S. December retail sales unexpectedly stagnate, boosting expectations of rate cuts this year

Eastern Time Tuesday (February 10), on the eve of the non-farm payroll release, U.S. stocks fluctuated, with the market generally remaining on the sidelines. The Dow modestly closed higher, continuing to hit new highs. December retail sales data unexpectedly stagnated, boosting bets of multiple rate cuts by the Federal Reserve this year, and U.S. Treasury yields declined. Commodity and cryptocurrency markets also moved sideways in consolidation.

【U.S. Stock Indices】

At the close, the S&P 500 fell 0.33%, to 6,941.81; the Dow Jones rose 0.10%, to 50,188.14; the Nasdaq dropped 0.59%, to 23,102.47.

Latest data shows that consumer spending at the end of the holiday season was weak; December retail sales in the U.S. unexpectedly stagnated, remaining flat month-over-month, below the expected 0.4% growth. Core retail sales used in GDP calculations declined 0.1%, with previous months’ figures also revised downward. Retail stocks came under clear pressure on Tuesday, with Costco down over 2% and Walmart down over 1%.

After the data release, the market’s pricing for three rate cuts this year slightly increased, with two already fully priced in. However, most institutions believe that a single retail data point is insufficient to alter the Fed’s overall trajectory. Futures markets still expect the first rate cut to occur as early as June.

In response, BMO Capital Markets noted that consumer momentum at the end of 2025 is significantly weaker than previously assumed, providing a less-than-ideal starting point for growth in 2026. Northlight Asset Management bluntly stated: “Consumer sentiment has finally caught up, but not in a good way.”

Anthony Saglimbene, Chief Market Strategist at Ameriprise Financial, said, “Another key factor putting pressure on middle- and lower-income consumers is their perception of the employment environment, and we know their confidence is becoming more uncertain. If job growth in January falls short of expectations, it could impact the market’s broad rally theme.”

Saglimbene added, “The market seems to be rotating into sectors that may be less susceptible to AI trading shocks.” He pointed out recent gains in materials and utilities sectors.

The software sector has stabilized somewhat but remains fragile overall. Analysts believe recent market reactions to the “AI impact” are more emotional, characterized by “sell first, think later.” Goldman Sachs noted that anxiety around AI disruption is nearing a peak, and some sector declines lack fundamental triggers. JPMorgan also believes that the historic pullback in software stocks reflects excessive short-term AI impact pricing rather than a rejection of long-term fundamentals.

Goldman Sachs CEO David Solomon said that last week’s sharp decline in software stocks due to fears of AI competition might have been an overreaction. He stated at the UBS conference in Key Biscayne, Florida, on Tuesday, “I think the narrative over the past week has been somewhat too broad. There will be winners and losers, and many companies will undergo transformation.”

【U.S. Treasury Bonds】

U.S. Treasury yields declined across the board, with the benchmark 10-year yield closing at 4.148%, and the 2-year yield sensitive to Fed policy at 3.452%.

Analysts believe that the decline in Treasury yields provides medium-term support for gold and silver, but short-term trends have clearly entered a phase of high-level digestion.

【Popular U.S. Stocks】

Among popular U.S. stocks, Nvidia fell 0.79%, Apple declined 0.34%, Google C dropped 1.78%, Google A fell 1.77%, Microsoft declined 0.08%, Amazon dropped 0.87%, TSMC rose 1.85%, Meta fell 0.96%, Tesla rose 1.89%, Seagate Semiconductor declined 1.13%, Intel dropped 6.19%.

On the news front, Google’s parent company Alphabet is expected to raise nearly $32 billion in debt within less than 24 hours. After issuing $20 billion in dollar bonds across seven tranches on Monday, Alphabet is issuing bonds denominated in pounds and Swiss francs, breaking records in both markets.

【Global Indices】

In Europe, the FTSE 100 index in the UK declined slightly by 0.31%, to 10,354 points. France’s CAC 40 rose slightly by 0.06%, to 8,328 points. Germany’s DAX fell slightly by 0.11%, to 24,988 points.

In Asia, the Hang Seng Index rose modestly by 0.58%, to 27,183 points. The China Enterprises Index increased by 0.81%, to 9,243 points. The Nikkei 225 surged 2.28%, to 57,651 points.

【China Indices】

On February 10, overnight, the Hang Seng Tech Index futures rose 0.39%, the Nasdaq Golden Dragon Index increased 0.87%, and the FTSE China A50 Index rose 0.02%.

【Chinese Concept Stocks】

Among popular Chinese concept stocks, Tencent Holdings (HK) fell 1.61%, Alibaba rose 2.18%, Pinduoduo declined 0.13%, NetEase fell 0.01%, Baidu gained 0.47%, Ctrip dropped 1.84%, Li Auto rose 2.94%, Xpeng Motors increased 1.65%, NIO gained 1.53%.

【Forex and Commodities】

On Tuesday, the US dollar index remained near a one-week low, essentially unchanged during the day, closing at 96.799.

Spot gold paused its two-day rally; after the release of retail sales data, it briefly surged but quickly gave back gains, ending down 0.18% at $5,039 per ounce. Spot silver broke below the $80 level intraday, with London silver ending down 0.67% at $81 per ounce.

As markets await developments in US-Iran negotiations, Russia-Ukraine ceasefire progress, and US economic and oil inventory data, international crude oil prices oscillated within a range. WTI crude settled down 0.17% at $64.25 per barrel, while Brent crude rose 0.06% to $69.08 per barrel.

【Key Highlights】

U.S. December retail sales unexpectedly stagnated; holiday season consumption weak at the end

U.S. December retail sales underperformed compared to November’s 0.6% MoM increase and fell short of Wall Street’s expected 0.4% growth. Holiday spending momentum was weak and uneven. Of 13 retail categories, 8 declined, with low-income groups especially lacking spending power. While high-income households supported by asset appreciation, overall consumption was subdued by high prices and weather factors.

Federal Reserve: U.S. consumer debt default rate surges to near decade-high levels

A report from the New York Fed shows that in Q4 last year, the delinquency rate on U.S. household debt rose to 4.8%, the highest since 2017, driven mainly by increased defaults among low-income and young borrowers. The rise was primarily due to mortgage delinquencies.

Google raises nearly $32 billion in 24 hours; 100-year GBP bonds attract nearly tenfold oversubscription

Google’s parent company Alphabet plans to raise close to $32 billion in debt within less than 24 hours. After issuing $20 billion in dollar bonds across seven tranches on Monday, Alphabet issued bonds denominated in pounds and Swiss francs, breaking records in both markets. The GBP bonds include an extremely rare 100-year maturity, the first such issuance by a tech company since the dot-com bubble era. All bond tranches received strong demand, with the dollar bonds reportedly oversubscribed by over $100 billion. The £1 billion (about $1.4 billion) 100-year GBP bond was nearly ten times oversubscribed.

AI panic “contagion”: Altruist’s new tool shocks wealth management stocks; Charles Schwab drops over 9% intraday

On Tuesday, Altruist launched an AI tool for tax planning, directly targeting core business areas of traditional wealth management firms. Insurance broker stocks experienced similar declines after Insurify launched a new tool on Monday, with the S&P 500 Insurance Index falling nearly 4%, the largest drop since October last year. Last week, tools released by Anthropic triggered a sell-off in software stocks, with Thomson Reuters experiencing its first 20% weekly decline in history.

Elon Musk’s xAI loses another key executive; co-founder Wu Yu-hui resigns

Previously, other co-founders like Igor Babuschkin, Kyle Kosic, and Christian Szegedy had also left. Greg Yang announced last month he would step down to focus on fighting Lyme disease.

U.S. President Trump expects to hold a second round of talks with Iran next week

He stated, “Iran will not have nuclear weapons or missiles”; if US-Iran negotiations fail, a carrier strike group may be redeployed to the Middle East in preparation for possible military action.

Ray Dalio’s latest in-depth interview: U.S. on the brink of chaos and civil war; gold is the only safe haven

Bridgewater’s Dalio issued a stark warning: the U.S. is deep into the “fifth stage,” on the verge of chaos and civil war. Under debt imbalance and political polarization, gold has become the only “non-debtor” safe haven, recommended to comprise 5%-15% of investment portfolios. Dalio advised diversification and choosing stable places to live as strategies to counter currency devaluation and upcoming turbulence.

Paramount remains persistent; improves hostile takeover plan; commits to paying $2.8 billion breakup fee for Warner Bros.

Paramount has refined its hostile bid for Warner Bros., promising to cover a $2.8 billion Netflix termination fee, a $1.5 billion debt refinancing guarantee, and quarterly “standstill” payments of 25 cents per share. However, the base offer remains at $30 per share; analysts believe unless the bid is raised above $32, it will be difficult to sway Warner Bros.’ board.

U.S. Commerce Secretary Raimondo admits visiting Epstein’s private island

On Tuesday, Commerce Secretary Gina Raimondo acknowledged that years ago, he had lunch on Jeffrey Epstein’s notorious private island with his family. “In 2012, during a family vacation, I took a boat there and indeed had lunch with him,” Raimondo testified before the Senate Appropriations Committee.