Stock Market Update

Equity futures point to a lower opening this morning after stocks faced a notable retreat yesterday, with the major averages all finishing with losses of 1.0% or wider in yesterday's trade. 

Software was yet again a laggard amid fears of AI disruption, a theme that broadened into other pockets of the market, with courier names among the hardest hit yesterday. Additionally, mega-caps continue to struggle in 2026, with massive capital expenditure plans causing lingering weakness across some of the market's largest names. Defensive sectors garnered some rotational interest, though it was not enough to balance losses at the index level. 

The January CPI (Briefing.com consensus 0.3%; prior 0.3%) and Core CPI (Briefing.com consensus 0.3%; prior 0.2%) readings are the lone economic data releases on the calendar this morning, though the market is always attuned to their release. The market is not expecting another rate cut from the Fed until June, with a solid January jobs report this week even eroding the June probability considerably. 

Additionally, investors have plenty of earnings reports from yesterday afternoon and this morning to assess, with several large tech companies making nice upward moves this morning. 

On the trade front, Financial Times reports that President Trump is planning to roll back tariffs on steel and aluminum products as a part of his affordability push. 

In corporate news:

• Automakers are reducing electric vehicle capacity amid falling demand, according to The Wall Street Journal. 
• Airbnb (ABNB 122.21, +6.25, +5.4%) missed EPS expectations by $0.11, beat revenue expectations, and guided Q1 revenues above consensus. The company expects FY2026 growth to accelerate to at least low double digits. 
• Applied Materials (AMAT 363.84, +35.45, +10.8%) beat EPS expectations by $0.17 and beat revenue expectations. The company guided Q2 EPS and revenues above consensus. 
• Arista Networks (ANET 148.55, +13.43, +9.9%) beat EPS expectations by $0.06, beat revenue expectations, and guided Q1 revenues above consensus. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a lower note. Japan's Nikkei: -1.2%, Hong Kong's Hang Seng: -1.7%, China's Shanghai Composite: -1.3%, India's Sensex: -1.3%, South Korea's Kospi: -0.3%, Australia's ASX All Ordinaries: -1.5%.

In news:

• There was growing speculation that President Trump will extend the current trade terms with China when he meets with President Xi in April.
• There were also reports that tariffs on metals and aluminum goods could be reduced.
• On a somewhat related note, officials from the U.S. and Taiwan formalized a trade deal.
• An adviser to Japan's Prime Minister Takaichi said that the Bank of Japan may forego a rate hike in March but is likely to raise rates later in the year.

In economic data:

• China's January New Loans CNY4.71 trln (expected CNY5.00 trln; last CNY910 bln), January Outstanding Loan Growth 6.1% yr/yr (expected 6.2%; last 6.4%), and January total social financing CNY7.22 trln (expected CNY7.05 trln; last CNY2.21 trln). January House Prices -3.1% yr/yr (last -2.7%)
• South Korea's January Import Price Index -1.2% yr/yr (last 0.5%) and Export Price Index 7.8% yr/yr (last 5.0%)
• New Zealand's January Business PMI 55.2 (last 56.1). December External Migration & Visitors 7.0% yr/yr (last 8.2%). Q1 Inflation Expectations 2.4% (last 2.3%)

Major European indices trade on a mostly lower note. STOXX Europe 600: -0.4%, Germany's DAX: +0.1%, U.K.'s FTSE 100: -0.1%, France's CAC 40: -0.4%, Italy's FTSE MIB: -1.7%, Spain's IBEX 35: -1.0%.

In news:

• Military contractor Safran reported in-line results while L'Oreal missed growth expectations.
• European Central Bank policymaker Kazaks said that the ECB is in a good position regarding rates while policymaker Nagel said that geopolitical "rivalries" could result in higher inflation.

In economic data:

• Eurozone's Q4 GDP 0.3% qtr/qtr, as expected (last 0.3%); 1.3% yr/yr, as expected (last 1.4%). Q4 Employment Change 0.2% qtr/qtr (expected 0.1%; last 0.2%); 0.7% yr/yr (expected 0.6%; last 0.6%). December trade surplus EUR12.6 bln (expected EUR11.8 bln; last EUR9.3 bln)
• Germany's January WPI 0.9% m/m (expected 0.1%; last -0.2%); 1.2% yr/yr (last 1.2%)
• Spain's January CPI -0.4% m/m, as expected (last 0.3%); 2.3% yr/yr (expected 2.4%; last 2.9%). January Core CPI 2.6% yr/yr, as expected (last 2.6%)
• Swiss January CPI -0.1% m/m (expected 0.0%; last 0.0%); 0.1% yr/yr, as expected (last 0.1%)