Stock Rally Fades as Traders Brace for Data Deluge: Markets Wrap

(Bloomberg) — A rally that drove the S&P 500 to within a whisker of an all-time high is pausing as traders gear up for a slate of US economic readings, starting with retail sales on Tuesday.

Futures for the US benchmark were little changed after a 2.5% advance over the past two sessions. Gold kept above $5,000 an ounce. In Europe, Kering SA surged 11% as a turnaround at its Gucci brand began to take hold. Alphabet Inc. kicked off a sterling and Swiss franc-denominated bond sale following a $20 billion US deal.

Economists and analysts expect solid retail sales for December, supported by resilient household spending despite high living costs and a fragile employment backdrop. The release will be followed by payrolls and inflation data in the coming days, as well as a slate of secondary readings on the labor market.

Markets are experiencing a moment of calm after an artificial-intelligence-driven selloff and subsequent rebound over the past week. Traders are now waiting to see how this week’s data may shape expectations for the Federal Reserve’s interest-rate path.

“We expect the economic rebound to broaden in the second half, but expect less positive data for the time being from consumers,” said Karen Georges, a fund manager at Ecofi Investissements in Paris. “We still, however, don’t expect the Fed to cut rates in the short term.”

The dollar was little changed after back-to-back declines. Treasuries gained, with the 10-year yield falling two basis points to 4.18%.

Money markets continue to price in two Fed rate cuts for 2026, with the first seen under the likely leadership of Kevin Warsh after Jerome Powell steps down as chair in May. Traders have been debating whether Warsh would represent a more hawkish choice for the top role than other candidates President Donald Trump considered.

Trevor Greetham, head of multi-asset investing at Royal London Asset Management, said stocks are probably being driven more by interest-rate expectations than corporate results at the moment.

“You can see that by the performance of the technology sector and what’s going on with US Treasury yields,” Greetham said. “Recently, when you’ve had rising bonds, you’ve had tech underperformance, which tells you more about the interest-rate part of the calculation.”

More than 300 members of the S&P 500 have published earnings so far this season, of which 79% have outperformed expectations. Coca-Cola Co. and Gilead Sciences Inc. are among those scheduled to report on Tuesday.

In Asia, the yuan surged to its strongest level since May 2023 after China asked banks to limit their holdings of US Treasuries. The news reinforced a broader trend of diversification away from the dollar, potentially accelerating the repatriation of capital into Chinese assets.

Corporate Highlights:

BP Plc is halting share buybacks and raising its target for cost cuts as pressure mounts on the UK energy giant to deliver on its turnaround efforts. Barclays Plc said it will return at least £15 billion ($20.5 billion) to shareholders through 2028 as it continues to work through a long-term plan to slash costs and improve profitability. Taiwan Semiconductor Manufacturing Co.’s January sales grew at their fastest clip in months, a sign of sustained global AI spending even as concerns persist about an industry bubble. Gucci sales fell in the final months of last year as Kering SA struggles to revive its biggest brand. AstraZeneca Plc expects profit to grow further this year, boosted by sales of its cancer drugs as it works to offset a patent expiry of a blockbuster diabetes medicine. Royal Philips NV’s top executive said improving performance after introducing new products and streamlining the business is helping to navigate tariffs and volatility. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 was little changed as of 10:38 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index rose 1.2% The MSCI Emerging Markets Index rose 0.7% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1916 The Japanese yen rose 0.5% to 155.15 per dollar The offshore yuan was little changed at 6.9096 per dollar The British pound fell 0.2% to $1.3666 Cryptocurrencies

Bitcoin fell 2.1% to $68,914.73 Ether fell 5.1% to $2,012.52 Bonds

The yield on 10-year Treasuries declined two basis points to 4.18% Germany’s 10-year yield declined one basis point to 2.83% Britain’s 10-year yield declined two basis points to 4.50% Commodities

Brent crude was little changed Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

–With assistance from Sabrina Nelson Garcinuño and Neil Campling.

©2026 Bloomberg L.P.