Market News 06 FEB
Stock Market Overview: Growth Amid Falling Bond Yields
U.S. stock indices closed moderately higher on Wednesday. The S&P 500 ($SPX) gained +0.39%, the Dow Jones Industrials ($DOWI) rose by +0.71%, and the Nasdaq 100 ($IUXX) strengthened by +0.42%. Futures for March E-mini S&P (ESH25) and E-mini Nasdaq (NQH25) rose by +0.42% and +0.48%, respectively.
The primary driver of stock market strength was a sharp decline in bond yields. The yield on 10-year Treasury bonds fell to a 7-week low, prompting short covering and increased buying activity. Additionally, falling rates had a positive impact on large-cap stocks.
Stock Movements
Alphabet (GOOG) – shares fell 6.9% to $193.30 after earnings failed to meet investor expectations. Further pressure came from the announcement of $75 billion in capital expenditures for 2025.
Apple (AAPL) – shares closed down 0.1% at $232.47 following a Bloomberg report about a potential investigation in China regarding App Store fees. However, the stock recovered from an initial 1.9% decline.
Walt Disney (DIS) – shares dropped 2.4% to $110.54 due to reports of declining Disney+ subscriptions.
Impact of Interest Rates and Macroeconomic Data
The market reacted to the decline in 10-year bond yields by nine basis points to 4.42%, while 2-year bond yields fell four basis points to 4.18%. The yield drop was driven by weaker-than-expected service sector PMI data from China, Europe, and the U.S.
Upcoming Economic Data
On Thursday, investors will receive the following reports:
8:30 ET – Q4 productivity, unit labor costs, weekly jobless claims.
10:30 ET – Weekly natural gas inventories report.
Corporate Sector News
MicroStrategy (MSTR) – the company reported a Q4 non-GAAP loss per share of -$3.20, with revenue at $120.7 million, missing analyst estimates. Despite a 48.4% increase in subscription services revenue, declines in other segments of 10.8% and 20.8% weighed on the stock.
Uber Technologies (UBER) – shares declined due to a disappointing 2025 outlook and currency risks in Argentina, Mexico, and Brazil. The company acknowledged that exchange rate fluctuations could impact financial results.
Ford (F) – the automaker posted Q4 earnings of $0.39 per share, beating expectations. However, shares fell 4% due to market concerns.
Tech Sector Rally
Falling bond yields triggered a rally in tech stocks. Marvell Technology (MRVL) and Arm Holdings Plc (ARM) gained over 6%, Nvidia (NVDA) and NXP Semiconductors NV (NXPI) rose more than 5%. Broadcom (AVGO) and Micron Technology (MU) also advanced over 4% and 3%, respectively.
Top Gainers and Losers
Gainers:
Johnson Controls International (JCI) +11% – revised earnings forecast upward.
Electronic Arts (EA) +7% – reported net reserves above expectations.
Amgen (AMGN) +6% – Q4 earnings per share beat consensus estimates.
Fiserv (FI) +7% – strong quarterly financials.
Mattel (MAT) +14% – revenue and annual earnings forecast exceeded expectations.
Losers:
Alphabet (GOOGL) -7% – weaker-than-expected revenue.
Advanced Micro Devices (AMD) -6% – disappointing data center revenue.
FMC Corp (FMC) -33% – weak 2025 earnings outlook.
Uber Technologies (UBER) -7% – underwhelming EBITDA report.
Match Group (MTCH) -7% – revenue forecast below consensus.
The stock market continues to show strength amid declining bond yields, though macroeconomic uncertainty and corporate earnings remain key factors influencing index movements. Investors should closely monitor upcoming economic data and corporate forecasts, as these will determine the market’s direction in the near term.