Stocks Rise, Dollar Weakens Before US Jobs Data: Markets Wrap
(Bloomberg) — Asian equities climbed to a record and the dollar declined ahead of Wednesday’s US jobs report after weak retail sales reinforced bets that the Federal Reserve will cut interest rates later this year.
The MSCI Asia Pacific Index rose 1% to an all-time high, widening its year-to-date outperformance versus European and US equities. A gauge for emerging markets also climbed to a record. The momentum seemed set to carry over to Wall Street with futures contracts for the S&P 500 and the Nasdaq 100 indexes advancing.
Treasury futures extended their gains after 10-year bond yields dropped to the lowest in about a month in the US session. There’s no cash trading in Treasuries during the Asian day as Japan is closed for a holiday. Gold, which typically benefits when rates are lowered, rose 0.4% as money markets see slightly higher odds of three Fed cuts this year — with two already fully priced in. The dollar weakened against all its Group-of-10 peers.
Unexpectedly weak December retail sales on Tuesday pointed to softer consumer momentum as the year ended, reinforcing expectations the Fed may ease rates later this year. Attention now turns to the jobs report and inflation data later this week for more signals on the policy outlook, even as equities waver on concerns over heavy artificial-intelligence spending by technology firms.
The jobs report “will be key,” said Bret Kenwell at eToro. “A weak print could push sentiment further toward risk-off if growth worries start to build, but a solid print may ease some of those concerns.”
Economists predict a 65,000 rise in January payrolls. Such an outcome would be the best in four months. The unemployment rate is seen holding at 4.4%. There will be an annual revision to the jobs count — which is expected to reveal a markdown in the year through March 2025.
The swaps market has boosted its pricing of a third quarter-point rate cut this year, with two almost priced-in by the September meeting. That’s up from a week ago, with Tuesday’s weaker-than-expected retail sales data adding to the dovish momentum shift.
“There is probably a bit more interest in tonight’s US payrolls report following mixed economic data recently,” said Lorraine Tan, director of equity research at Morningstar Asia Ltd. “If numbers are subdued, it should lift expectations for a Fed rate cut.”
On Tuesday, the S&P 500 slipped 0.3% amid weakness in several tech shares, though the gauge remained near the record reached last month. In other corners of the market, silver rose over 2%, while Bitcoin fell to trade around $67,500. The Bloomberg Dollar Spot Index fell 0.2%, a fourth consecutive day of declines.
Meanwhile, it’s shaping up to be another blockbuster year for Asian markets, which are outpacing peers in the US and Europe.
Most equity benchmarks in the region have risen in 2026, currencies have shown resilience against external pressures, and demand for credit has pushed spreads to near record lows.
While it’s still early days, and Asia hasn’t been immune to the global volatility, the region has several forces working in its favor.
AI is one such theme, as global investors contend with billions of dollars in spending and the disruptions it’s creating.
On Wall Street, rising fears about AI keep pummeling the shares of companies at risk of being caught on the wrong side of it all, from small software companies to big wealth-management firms.
The latest selloff erupted on Tuesday when a tax-strategy tool rolled out by a little-known startup, Altruist Corp., sent the shares of Charles Schwab Corp., Raymond James Financial Inc. and LPL Financial Holdings Inc. down by 7% or more.
Last week’s steep drop in software stocks on concern about competition from AI was likely overdone, according to Goldman Sachs Group Inc.’s chief executive officer.
“I think the narrative over the last week has been a little bit too broad,” said David Solomon. “There’ll be winners and losers — plenty of companies will pivot and do just fine.”
Corporate News:
Alphabet Inc. raised almost $32 billion in debt in less than 24 hours, showing the enormous funding needs of tech giants competing to build out their artificial intelligence capabilities. Activist investor Ancora Holdings Group has built a position in Warner Bros. Discovery Inc., according to people familiar with the matter. Ford Motor Co. expects profit to jump in 2026 after being saddled with a surprise tariff bill at the end of last year. Commonwealth Bank of Australia shares climbed the most in five years after its first-half profit topped expectations, buoyed by growth in its flagship mortgage business and a push in lending more to companies. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.3% as of 1:58 p.m. Tokyo time Australia’s S&P/ASX 200 rose 1.6% Hong Kong’s Hang Seng rose 0.4% The Shanghai Composite rose 0.2% Euro Stoxx 50 futures were little changed Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.1% to $1.1908 The Japanese yen rose 0.7% to 153.33 per dollar The offshore yuan was little changed at 6.9095 per dollar The Australian dollar rose 0.6% to $0.7114 Cryptocurrencies
Bitcoin fell 1.6% to $67,531.27 Ether fell 1.9% to $1,970.28 Bonds
Australia’s 10-year yield declined seven basis points to 4.76% Commodities
West Texas Intermediate crude rose 0.7% to $64.42 a barrel Spot gold rose 0.5% to $5,049.52 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Gabrielle Ng and Andrew Janes.
©2026 Bloomberg L.P.
