Equity futures continue to tick higher shortly before the open, with the major averages poised to reclaim yesterday's modest weakness.

Initial jobless claims for the week ending February 7 decreased by 5,000 to 227,000 (Briefing.com consensus: 230,000). Continuing jobless claims for the week ending January 31 increased by 21,000 to 1.862 million.

The key takeaway from the report is its steady messaging that layoff activity is low and that hiring activity is slow.

The S&P 500 futures currently 26 trade points above fair value. 

Equity indices in the Asia-Pacific region had a mixed showing on Thursday with South Korea's Kospi (+3.1%) settling at a fresh record high while Japan's Nikkei (-0.02%) touched a fresh record before ending little changed. Longer-dated JGBs outperformed, sending yields on 20-, 30-, and 40-yr bonds to levels seen in early January. Reserve Bank of Australia Governor Bullock defended the RBA's recent rate hike in a parliamentary testimony. There was growing speculation that the Bank of Korea will launch a quantitative easing program.

• In economic data:
  • Japan's January PPI 0.2% m/m, as expected (last 0.1%); 2.3% yr/yr, as expected (last 2.4%)
  • India's January CPI 2.75% (expected 2.40%; last 1.33%)
  • Australia's February MI Inflation Gauge 5.0% (last 4.6%)

---Equity Markets---

• Japan's Nikkei: UNCH
• Hong Kong's Hang Seng: -0.9%
• China's Shanghai Composite: +0.1%
• India's Sensex: -0.7%
• South Korea's Kospi: +3.1%
• Australia's ASX All Ordinaries: UNCH

Major European indices trade on a mostly higher note. The U.K.'s GDP report for Q4 was a touch light relative to expectations due to weak industrial production in December. Siemens reported strong results and outlook while Mercedes-Benz reported pressure on margins and cautious guidance. Hermes reported strong revenue growth for Q4. French President Macron urged EU leaders to come up with a plan to improve competitiveness by the summer.

• In economic data:
  • U.K.'s Q4 GDP 0.1% qtr/qtr (expected 0.2%; last 0.1%); 1.0% yr/yr (expected 1.2%; last 1.2%). December Industrial Production -0.9% m/m (expected -0.1%; last 1.3%); 0.5% yr/yr (expected 1.5%; last 2.3%). December Manufacturing Production -0.5% m/m (expected -0.2%; last 1.9%); 0.5% yr/yr (expected 1.8%; last 1.3%). December Construction Output -0.5% m/m (expected 0.5%; last -0.8%); -0.3% yr/yr (expected 0.0%; last -0.3%). Q4 Business Investment -2.7% qtr/qtr (expected 0.4%; last 1.6%); 2.0% yr/yr (last 2.5%). December trade deficit GBP22.72 bln (expected deficit of GBP22.30 bln; last deficit of GBP23.58 bln)

---Equity Markets---

• STOXX Europe 600: +0.1%
• Germany's DAX: +1.4%
• U.K.'s FTSE 100: +0.1%
• France's CAC 40: +0.9%
• Italy's FTSE MIB: +0.5%
• Spain's IBEX 35: -0.1%

The S&P 500 futures currently trade 20 points above fair value. 

Just released, initial jobless claims for the week ending February 7 decreased by 5,000 to 227,000 (Briefing.com consensus: 230,000). The prior level was upwardly revised to 232K from 231K.

Continuing jobless claims for the week ending January 31 increased by 21,000 to 1.862 million, from a downwardly revised 1.841 million (from 1.844 million).

Equity futures point to a modestly higher opening after a flattish, mostly lower finish to the midweek session. The modest weakness snapped a three-day streak of fresh record highs for the DJIA.

Yesterday's action was largely defined by the January employment situation report, which saw an impressive 130K payrolls added in January (Briefing.com consensus 68K). The strong report initially lifted stocks, but it also weighed on the market's expectations for easing for the Fed, which saw the early gains erased.

Semiconductors, defensive sectors, and select cyclical sectors posted solid gains, while mega-cap tech, software, and financials lagged. 

The market will receive more labor market data this morning in the form of the weekly initial jobless claims report (Briefing.com consensus 230K). 

Additionally, a busy week of earnings reports continues to be a driver of some outsized moves this week. 

Still, action at the index level has been largely subdued after a volatile previous week. The major averages enter today's action within 0.2% of their unchanged levels for the week.

In Washington, Politico reports that the House voted 219-211 to override President Trump's tariffs on Canada, but the vote is largely symbolic because there is not enough support to override a presidential veto.

In corporate news:

• Applovin (APP 424.00, -32.81, -7.2%) beat EPS expectations by $0.29, beat revenue expectations, and guided Q1 revenues above consensus. 
• Cisco (CSCO 79.50, -6.04, -7.1%) beat EPS expectations by $0.02, beat on revenues, guided Q3 EPS in-line with revenues above consensus, raised FY26 guidance, and raised its dividend 2% to $0.42/share.
• McDonald's (MCD 324.97, +1.76, +0.5%) beat EPS expectations by $0.07 and beat revenue expectations. 
• Microsoft (MSFT 405.87, +1.50, +0.4%) wants to reduce its reliance on OpenAI, according to Financial Times. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mixed showing on Thursday with South Korea's Kospi (+3.1%) settling at a fresh record high while Japan's Nikkei (-0.02%) touched a fresh record before ending little changed. Japan's Nikkei: UNCH, Hong Kong's Hang Seng: -0.9%, China's Shanghai Composite: +0.1%, India's Sensex: -0.7%, South Korea's Kospi: +3.1%, Australia's ASX All Ordinaries: UNCH.

In news:

• Longer-dated JGBs outperformed, sending yields on 20-, 30-, and 40-yr bonds to levels seen in early January.
• Reserve Bank of Australia Governor Bullock defended the RBA's recent rate hike in a parliamentary testimony.
• There was growing speculation that the Bank of Korea will launch a quantitative easing program.

In economic data:

• Japan's January PPI 0.2% m/m, as expected (last 0.1%); 2.3% yr/yr, as expected (last 2.4%)
• India's January CPI 2.75% (expected 2.40%; last 1.33%)
• Australia's February MI Inflation Gauge 5.0% (last 4.6%)

Major European indices trade on a mostly higher note. STOXX Europe 600: +0.4%, Germany's DAX: +1.3%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.9%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: -0.1%.

In news:

• The U.K.'s GDP report for Q4 was a touch light relative to expectations due to weak industrial production in December.
• Siemens reported strong results and outlook while Mercedes-Benz reported pressure on margins and cautious guidance.
• Hermes reported strong revenue growth for Q4.
• French President Macron urged EU leaders to come up with a plan to improve competitiveness by the summer.

In economic data:

• U.K.'s Q4 GDP 0.1% qtr/qtr (expected 0.2%; last 0.1%); 1.0% yr/yr (expected 1.2%; last 1.2%). December Industrial Production -0.9% m/m (expected -0.1%; last 1.3%); 0.5% yr/yr (expected 1.5%; last 2.3%). December Manufacturing Production -0.5% m/m (expected -0.2%; last 1.9%); 0.5% yr/yr (expected 1.8%; last 1.3%). December Construction Output -0.5% m/m (expected 0.5%; last -0.8%); -0.3% yr/yr (expected 0.0%; last -0.3%). Q4 Business Investment -2.7% qtr/qtr (expected 0.4%; last 1.6%); 2.0% yr/yr (last 2.5%). December trade deficit GBP22.72 bln (expected deficit of GBP22.30 bln; last deficit of GBP23.58 bln)

[BRIEFING.COM] The S&P 500 (flat), Nasdaq Composite (-0.2%), and DJIA (-0.1%) traded in a tight range near their flatlines for the bulk of the session after some notable swings early on. The modest weakness snaps a three-day streak of record highs for the DJIA. 

Stocks opened to solid gains following this morning's release of the January Employment Situation Report, which showed 130K payrolls added in January (Briefing.com consensus 68K). While the headline figure generated some positive buzz around the U.S. growth outlook, it also tempered the market's expectations for its next rate cut from the Fed. The probability of at least a 25-basis point rate cut at the June 17 FOMC meeting now stands at around 60%, down from just over 75% yesterday, according to the CME FedWatch tool. 

After retreating from the opening highs, stocks largely drifted sideways. True to 2026 form, strength in the broader market had a positive tilt, with select cyclical and defensive sectors posting solid gains, while mega-caps faced weakness. 

Amazon (AMZN 204.20, -2.70, -1.31%) and Alphabet (GOOG 311.24, -7.39, -2.32%) continued to face pressure after their earnings releases last week, weighing on the communication services (-1.3%) and consumer discretionary (-0.6%) sectors. 

The information technology sector (+0.3%) had the bumpiest morning but managed to close modestly higher as the broader AI infrastructure landscape had a solid day. The PHLX Semiconductor Index (+2.3%) was lifted by a sharp rebound in memory storage names such as Sandisk (SNDK 599.34, +57.70, +10.65%) and Micron (MU 410.34, +37.09, +9.94%) after some weakness yesterday. 

Software stocks, on the other hand, faced renewed pressure after some relief in the previous session. The iShares GS Software ETF (IGV) finished 2.6% lower, and Microsoft (MSFT 404.37, -8.90, -2.15%) was once again a mega-cap laggard. 

Earnings also played a role in today's action, with several sectors' best and worst performing components being results of this morning's releases.

Smurfit Westrock plc (SW 50.28, +4.53, +9.90%) contributed to a solid day for the materials sector (+1.3%), while Generac (GNRC 214.99, +32.69, +17.93%) was the best-performing S&P 500 name, helping the industrials sector (+0.5%) notch a gain. 

Meanwhile, Robinhood Markets (HOOD 78.07, -7.53, -8.80%) was one of the worst-performing S&P 500 names after missing revenue expectations. The financials sector (-1.5%) was a laggard as major banking and financial services stocks saw a continuation of yesterday's weakness. 

Elsewhere, the energy sector (+2.6%) finished as the best-performing S&P 500 sector as heightening geopolitical tensions between the U.S. and Iran contributed to crude oil futures settling today's session $0.59 higher (+0.9%) at $64.60 per barrel. 

The consumer staples sector (+1.5%) also logged a nice gain on broad strength throughout the sector as it rebounded from yesterday's weakness that followed a flat retail sales report for December. 

Outside of the S&P 500, the Russell 2000 (-0.4%) and S&P Mid Cap 400 (-0.2%) were never able to reclaim their opening gains. 

Overall, the session underscored the market's familiar push-and-pull between resilient breadth and ongoing mega-cap pressure, leaving the major averages little changed by the close. With rate-cut expectations recalibrating and earnings continuing to drive sharp single-stock moves, the market proceeded cautiously in anticipation of its next catalysts. 

U.S. Treasuries retreated on Wednesday with the short end leading the move, though the entire complex spent the day in a steady rally off lows that were reached in immediate reaction to a stellar jobs report for January (130,000; Briefing.com consensus 68,000). The 2-year note yield settled up six basis points to 3.51%, and the 10-year note yield settled up three basis points to 4.17%. 

• S&P Mid Cap 400: +8.4% YTD
• Russell 2000: +7.6% YTD
• DJIA: +4.3% YTD
• S&P 500: +1.4% YTD
• Nasdaq Composite: -0.8% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -0.3%; Prior -8.9%
• January Nonfarm Payrolls 130K (Briefing.com consensus 68K); Prior was revised to 48K from 50K, January Nonfarm Private Payrolls 172K (Briefing.com consensus 60K); Prior was revised to 64K from 37K, January Unemployment Rate 4.3% (Briefing.com consensus 4.4%); Prior 4.4%, January Average Hourly Earnings 0.4% (Briefing.com consensus 0.3%); Prior was revised to 0.1% from 0.3%, January Average Workweek 34.3 (Briefing.com consensus 34.2); Prior 34.2
  • The key takeaway from the report is that it is a positive sign for the U.S. growth outlook, yet it may come with the cost of foregoing an additional rate cut by the Fed, at least in the near future.
• The Treasury's budget deficit was $94.6 billion in January (Briefing.com consensus: -$190.0B), which was much narrower than expected and a notable improvement from the same period a year ago when it was $128.6 billion. Receipts totaled $559.9 billion, while outlays summed to $654.6 billion.
  • The key takeaway from the report is that it shows the benefits of collecting customs duties as a means of reducing the deficit. At the same time, it also reflects the onerous interest costs stemming from the high amount of debt issuance needed to fund government operations. Weekly crude oil inventories increased by 8.53 million barrels after decreasing by 3.46 million barrels a week ago.