Market Snapshot
| Dow | 49450.77 | -669.42 | (-1.34%) | | Nasdaq | 22597.17 | -469.32 | (-2.03%) | | SP 500 | 6832.75 | -108.71 | (-1.57%) | | 10-yr Note |
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| | NYSE | Adv 845 | Dec 1896 | Vol 1.60 bln | | Nasdaq | Adv 1315 | Dec 3521 | Vol 8.91 bln |
Industry Watch
| Strong: Real Estate, Industrials, Consumer Staples, Utilities |
| | Weak: Communication Services, Information Technology, Financials, Consumer Discretionary, Materials, Industrials, Energy, Health Care |
Moving the Market
--Renewed weakness across mega-cap and tech names
--Concerns of AI disruption in the broader market
--Broader market mostly lower, some defensive pockets garnering rotational interest
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Market turns defensive ahead of January CPI release
12-Feb-26 16:25 ET
Dow -669.42 at 49450.77, Nasdaq -469.32 at 22597.17, S&P -108.71 at 6832.75
[BRIEFING.COM] Stocks had their toughest session of the week today, quickly ceding modest opening gains amid renewed pressure across software and mega-cap stocks and fears of broader disruption from AI elsewhere.
The S&P 500 (-1.6%), Nasdaq Composite (-2.0%), and DJIA (-1.3%) finished lower across the board as weakness broadened throughout the session. The market's clear "risk-off" positioning led the Russell 2000 (-2.0%) and S&P Mid Cap 400 (-1.4%) to similar retreats.
Weakness was first evident in the information technology sector (-2.7%), which closed as the worst-performing S&P 500 sector today.
Software stocks came under renewed scrutiny after AppLovin (APP 366.91, -89.90, -19.68%) delivered a beat-and-raise earnings report but sold off sharply, finishing as the worst-performing S&P 500 component today. The iShares GS Software ETF (IGV) finished 2.7% lower.
While memory storage stocks such as Sandisk (SNDK 630.29, +30.95, +5.16%) and Micron (MU 413.97, +3.63, +0.88%) finished higher after a retreat yesterday, they ended the day well off of their earlier highs, and weakness across other chipmaker stocks sent the PHLX Semiconductor Index 2.5% lower.
Cisco (CSCO 75.00, -10.54, -12.32%) was another earnings laggard, with its warning that higher memory costs will be adversely affecting its profit margins weighing on other hardware names such as Dell (DELL 112.85, -11.31, -9.11%) and Apple (AAPL 261.73, -13.77, -5.00%).
While the broadening out of leadership from tech into cyclical sectors has been a prominent headline in 2026, today's session did not follow that trend, with several notable retreats in the mix.
This year's best performer, the energy sector, closed 2.2% lower amid a falling price of oil. Bloomberg reported that President Trump told reporters that he expects negotiations with Iran to be resolved over the next month, a development that helped crude oil futures settle today's session $1.72 lower (-2.7%) at $62.88 per barrel.
The financials sector (-2.0%) was another laggard, expanding this week's losses to 4.8%. Robinhood Markets (HOOD 71.12, -6.85, -8.79%) continues to sink after its earnings release, while today saw an extension of yesterday's weakness across major banking names. There was some modest buying support across some financial services and insurance names that faced pressure in previous sessions amid concerns of AI disruption, but it was nowhere near enough to offset losses elsewhere.
The AI disruption theme did have a tangible effect on the industrials sector (-1.2%) today, with courier stocks such as C.H. Robinson (CHRW 167.78, -28.55, -14.54%) and Expeditors Intl (EXPD 140.45, -21.44, -13.24%) finishing sharply lower.
Elsewhere, mega-cap weakness weighed on the consumer discretionary (-1.6%) and communication services (-1.5%) sectors, sending the Vanguard Mega Cap Growth ETF 1.8% lower. Amazon (AMZN 199.60, -4.48, -2.20%) is yet to notch a higher finish after its earnings release last Thursday.
Unsurprisingly, some more defense-oriented corners of the market garnered some rotational interest today.
The utilities sector (+1.5%) captures the widest gain, with Exelon (EXC 47.55, +3.10, +6.97%) leading the advance after topping earnings estimates.
The consumer staples sector (+1.2%) finished similarly, with Walmart (WMT 133.64, +4.87, +3.78%) adding to its impressive start to the year and finishing as the best-performing Dow component today.
The real estate sector (+0.3%) also captured a modest gain.
Ultimately, today's session saw the market give up some ground as AI disruption concerns mingled with this year's pattern of weakness in mega-cap tech. After a strong rebound effort on Friday and several uneventful sessions this week, it is almost easy to forget that the major averages logged losses of 1.0% or wider across the board last Thursday as well. However, the retreat today showed that recent headwinds have not yet fallen by the wayside, leaving the market on defensive footing heading into tomorrow's release of the January CPI (Briefing.com consensus 0.3%; prior 0.3%) and Core CPI (Briefing.com consensus 0.3%; prior 0.2%) readings.
U.S. Treasuries had a strong showing on Thursday with some help from weakness in equities and an impressive 30-year bond auction. The 2-year note yield settled down four basis points to 3.47%, and the 10-year note yield settled down seven basis points to 4.17%.
- S&P Mid Cap 400: +6.9% YTD
- Russell 2000: +5.4% YTD
- DJIA: +2.9% YTD
- S&P 500: -0.2% YTD
- Nasdaq Composite: -2.8% YTD
Reviewing today's data:
- Weekly Initial Claims 227K (Briefing.com consensus 230K); Prior was revised to 232K from 231K, Weekly Continuing Claims 1.862 mln; Prior was revised to 1.841 mln from 1.844 mln
- The key takeaway from the report is its steady messaging that layoff activity is low and that hiring activity is slow.
- January Existing Home Sales 3.91 mln (Briefing.com consensus 4.21 mln); Prior was revised to 4.27 mln from 4.35 mln
- The key takeaway from the report is that the existing home market remains supply constrained. That is pushing up prices and mitigating some of the affordability benefits linked to wage growth and lower mortgage rates.
Major averages lower ahead of January CPI
12-Feb-26 15:30 ET
Dow -477.56 at 49642.63, Nasdaq -447.09 at 22619.40, S&P -94.21 at 6847.25
[BRIEFING.COM] The major averages remain little changed from previous levels shortly before the close.
In addition to another sizable batch of earnings reports, the market anticipates tomorrow's release of the January CPI (Briefing.com consensus 0.3%; prior 0.3%) and Core CPI (Briefing.com consensus 0.3%; prior 0.2%) readings. With recent labor market readings tilting positive, a surprise to the upside could further stymie the market's expectations for its next rate cut from the Fed.
Financials sector modestly improved
12-Feb-26 15:05 ET
Dow -337.56 at 49782.63, Nasdaq -367.92 at 22698.57, S&P -69.33 at 6872.13
[BRIEFING.COM] The S&P 500 (-1.0%), Nasdaq Composite (-1.6%), and DJIA (-0.8%) remain firmly lower as the market enters the final hour of the session.
Though the financials sector (-1.2%) remains well below its flatline, it has shed a nice chunk of its earlier weakness. Several financial services and insurance services companies that traded lower earlier this week amid fears of AI disruption are garnering some buying support this afternoon, including FactSet (FDS 202.64, +8.98, +4.64%), Willis Towers Watson (WTW 289.22, +9.13, +3.26%), and Brown & Brown (BRO 69.50, +2.48, +3.69%).
S&P 500 Slides 1.1% as CHRW, BAX, and EXPD Plunge; Motorola Solutions Rises on Strong Q4 Beat
12-Feb-26 14:30 ET
Dow -470.70 at 49649.49, Nasdaq -364.96 at 22701.53, S&P -75.63 at 6865.83
[BRIEFING.COM] The S&P 500 (-1.09%) is in second place on Thursday afternoon, down about 75 points.
Briefly, S&P 500 constituents C.H. Robinson (CHRW 159.27, -37.06, -18.88%), Baxter (BAX 18.71, -3.56, -15.99%), and Expeditors Intl (EXPD 138.87, -23.02, -14.22%) pepper the bottom of the standings. CHRW and EXPD slide owing in part to a mix of new CDL restrictions raising supply uncertainty, surging spot rates squeezing broker margins, and growing AI-driven disruption fears, with BAX retreating after a sizable Q4 EPS miss and FY26 guidance well below consensus, with flat organic growth signaling limited near-term earnings momentum despite management's restructuring efforts.
Meanwhile, Motorola Solutions (MSI 468.28, +47.15, +11.20%) is near the top of the average after posting a solid Q4 beat and issuing FY26 EPS and revenue guidance above consensus, reinforcing strong backlog visibility and continued earnings momentum.
Gold Slides 2.9% to $4,948 as Strong U.S. Data Lifts Yields, Sparks Profit-Taking
12-Feb-26 14:00 ET
Dow -463.05 at 49657.14, Nasdaq -330.90 at 22735.59, S&P -69.62 at 6871.84
[BRIEFING.COM] The Nasdaq Composite (-1.43%) is in last place on Thursday afternoon, down about 330 points.
Gold futures settled $150.10 lower (-2.9%) at $4,948.50/oz, as stronger-than-expected U.S. economic data dampened hopes for near-term Fed rate cuts, pushing the dollar and real yields higher. The sell-off was exacerbated by profit-taking and long liquidation after gold’s sharp run to record highs earlier this year, reducing safe-haven demand.
Meanwhile, the U.S. Dollar Index is now up less than +0.1% to $96.99.
McDonald's Q4 Results: Snack Wrap Comeback and McValue Strategy Fuel Sales Surge (MCD)
McDonald's (MCD +2%) is trading modestly higher after reporting strong Q4 results, rebounding from a rare EPS miss in Q3 with its largest EPS beat in two years. Revenue increased 9.7% yr/yr to $7.01 bln, well above consensus and marking its strongest top-line growth since 3Q23, fueled by an aggressive value push and the successful return of Snack Wraps in the U.S. The somewhat muted stock reaction appears tied to ambitious 2026 cap-ex plans and a sizable run in shares since mid-January.
- Global same-restaurant sales rose +5.7%, the highest comp in nearly three years, accelerating from +3.6% in Q3 and +3.8% in Q2.
- US comps jumped 6.8%, up from +2.4% in Q3 and +2.5% in Q2, and exceeded internal expectations. The US performance reflects traction from McValue, the relaunch of Extra Value Meals (EVM) in September, and marketing initiatives that drove share gains among low-income consumers.
- McDonald's reported meaningful improvement in its value and affordability scores and stated it does not intend to get beat on value.
- Q4 marketing campaigns included Monopoly, one of its largest digital customer acquisition events ever, the Minecraft Movie collaboration spanning more than 100 markets, and The Grinch Meal, which set new sales records.
- McDonald's expects 2026 cap-ex of $3.7-3.9 bln, up from $3.4 bln in 2025, with the majority allocated to new unit openings in the US and International Operated Markets (IOM). The company opened 2,275 restaurants in 2025 and is targeting approximately 2,600 gross openings in 2026, keeping it on track to reach 50,000 restaurants by the end of 2027.
Briefing.com Analyst Insight:
McDonald's delivered an impressive quarter, highlighted by its strongest global comp growth in nearly three years and clear evidence that its value-focused strategy is resonating with consumers. The acceleration in US comps, combined with strong digital engagement and creative marketing partnerships, reinforces the brand's pricing power and customer relevance across income cohorts. However, the step-up in 2026 capital expenditures and an even faster pace of unit expansion may be tempering investor enthusiasm in the near term. While higher investment supports long-term growth and scale advantages, it also raises execution risk and could weigh modestly on free cash flow. Overall, we view the quarter as a strong operational performance, with the stock's muted reaction reflecting valuation and spending considerations rather than any fundamental weakness.
Crocs Stepping Into 2026 On Better Footing; Soars On Q4 Beat And Strong FY26 Guidance (CROX)
Crocs (CROX) is soaring following a better-than-expected holiday quarter and strong FY26 guidance. The casual shoemaker delivered a large Q4 EPS beat, while revenue declined 3.3% yr/yr to $957.6 mln. For FY26, CROX expects EPS of $12.88-13.35, which was well above expectations, and revenues to be down approximately 1% to up slightly from 2025, suggesting recent initiatives are supporting earnings growth despite a muted top line.
- Crocs brand returned to modest growth, increasing 0.8% yr/yr to $768 mln, better than the anticipated ~3% decline, though it remains pressured in North America where revenue decreased 7.4% to $436 mln.
- On the other hand, Crocs revenue increased 14.1% to $332 mln internationally, continuing to be a relative bright spot, led by strength in China, Japan, Western Europe and India.
- HEYDUDE fell 16.9% to $189 mln, better than the anticipated mid-20% decline, as the wholesale reset continued with wholesale down 40.5% to $56 mln while DTC was flat at $133 mln.
- Adj. Gross margin fell 320 bps yr/yr to 54.7%, driven by a 300 bps tariff headwind. While it expects 80 bps of tariff pressure in FY26, it reiterated $100 mln in cost savings and expects adj. margin to improve slightly from 2025.
- CROX noted the strategic actions taken in 2H25 will continue to weigh on results in early 2026, with Q1 revenue expected to be down 3.5-5.5%.
- As a result, FY26 will be back-half weighted. Notably, it expects the North America revenue rate to improve from 2025 and HEYDUDE to return to growth in 2H26.
Briefing.com Analyst Insight
This was a better-than-expected holiday quarter from CROX, though it's not to say the reset is over, with continued pressure in North America and another double-digit decline at HEYDUDE. Still, there were some clear highlights with the Crocs brand returning to modest growth, fueled by strong international demand, which continues to be a relative bright spot. The key driver was guidance, which came in notably better than expected. While the top-line outlook remains muted, reflecting first-half pressure, CROX expects EPS growth, supported by cost savings as well as improving North America trends and a return to growth in HEYDUDE in the back half. Overall, this marks a step in the right direction, but with CROX calling for a back-half acceleration, investors will be scrutinizing execution to see those improving trends translate into sustained results.
Fastly rockets to multi-year highs as Security and AI surge propel record revenue and margins (FSLY)
Fastly (FSLY) is launching higher by 60%, reaching multi-year highs following a powerhouse Q4 earnings report that suggests the edge cloud provider has reached a definitive turning point. After a year of disciplined execution, the company delivered a beat-and-raise performance, pairing record revenue with its first-ever profitable fiscal year. With AI shifting from a buzzword to a fundamental traffic driver, FSLY is signaling that its transformation from a niche content delivery network to a comprehensive security and compute powerhouse is officially reaching an inflection point.
- FSLY crushed Q4 expectations, posting record revenue of $172.6 mln (up 23% yr/yr), marking its strongest growth in over three years and its fourth consecutive quarter of acceleration.
- Profitability reached new heights as record gross margins of 64.0% (up 650 bps yr/yr) and record operating income demonstrated significant operating leverage.
- CEO Kip Compton characterized the results as an "inflection" in growth and anticipates momentum into 2026, driven by AI as a tailwind.
- Security revenue jumped 32% to $35.4 mln, fueled by an expanded product suite including Next-Gen WAF, API security, and bot management.
- Other revenue (primarily Compute) skyrocketed 78% to $6.4 mln, while Network Services grew a solid 19% to $130.8 mln.
- Remaining Performance Obligations (RPO) exploded 55% to $353.8 mln, reflecting a shift toward larger, upfront enterprise commitments.
- Enterprise customer count increased by 32 yr/yr to 628, a vital cohort that generates over 90% of company revenue.
- Bullish 2026 guidance of $700-$720 mln in revenue and doubled operating margins (8% at midpoint) sits comfortably ahead of expectations.
Briefing.com Analyst Insight
FSLY is evolving from a CDN into a high-margin security and AI-enablement platform. The 55% RPO explosion proves enterprise clients are shifting from "testing the waters" to locking in mission-critical, multi-product commitments. Agentic AI is a fundamental tailwind for FSLY. As machines traverse the web more aggressively than humans, FSLY is capturing a surge in machine-to-machine traffic and AI bot mitigation demand. By serving as the intelligence layer for AI workloads, FSLY is outgrowing traditional markets. Despite macro risks, a rapidly expanding gross margin and a doubling of 2026 profit targets suggest FSLY has reached a profitable inflection point. Execution on its 10-12% infrastructure CapEx plan will be vital to sustaining this momentum.
Cisco AI Order Surge Powers Growth, but Memory Price Spike Bites Into Margins (CSCO)
Cisco Systems (CSCO -11%) is trading sharply lower despite reporting modest EPS upside for Q2 (Jan). Revenue grew 9.7% yr/yr to $15.35 bln, which was above analyst expectations. Q3 (Apr) guidance was solid with in-line EPS and upside revenue. Cisco also raised its FY26 outlook and announced a small dividend increase, but rising memory prices are pressuring gross margins.
- Total product revenue was $11.6 bln, up 14% yr/yr, while services revenue was $3.7 bln, down 1% yr/yr.
- Networking revenue grew 21%, driven by AI infrastructure and campus refresh activity, with double-digit growth in campus switching, data center switching, wireless, service provider routing, enterprise routing, and compute. Security revenue declined 4%, reflecting weakness in prior generation products and the ongoing transition of Splunk from on-premises to cloud subscriptions.
- AI infrastructure orders from hyperscalers totaled $2.1 bln in Q2, up from $1.3 bln in Q1 and equal to the total for all of FY25.
- Cisco now expects to take over $5 bln in AI orders and recognize more than $3 bln in AI infrastructure revenue from hyperscalers in FY26.
- Q2 non-GAAP gross margin declined to 67.5% from 68.7% a year ago, and Cisco guided to 65.5-66.5% for Q3 due to higher memory costs.
Briefing.com Analyst Insight:
Cisco continues to execute well operationally, particularly in networking where AI infrastructure and next-generation campus products are driving meaningful acceleration in orders. The surge in AI-related demand, especially for Silicon One systems and optics, positions Cisco as a key beneficiary of hyperscaler spending in FY26. However, margin compression tied to rising memory prices is overshadowing the otherwise solid quarter. While management is taking pricing actions and adjusting contract terms to offset component inflation, investors appear concerned about the near-term gross margin trajectory. Even so, Cisco's scale, diversified portfolio, and strong AI order momentum makes the company confident it is better positioned than many peers to navigate this industry-wide cost pressure. On a final note, Broadcom (AVGO -1%) is a key supplier to Cisco. It is trading lower in sympathy.
FedEx traveling higher as upbeat Q3 outlook, bold FY29 targets fuel transformation narrative (FDX)
FedEx (FDX) is traveling higher following a flurry of strategic announcements ahead of its Investor Day, as upbeat Q3 guidance and ambitious FY29 financial targets underscore growing confidence in its transformation. The company expects Q3 EPS to come in ahead of consensus, signaling that cost discipline and execution are offsetting persistent macro headwinds. FDX also laid out a clearer roadmap for its shift toward a more profitable, AI-enabled logistics network, alongside plans to unlock value through the FedEx Freight spin-off.
- FDX outlined four priorities: unify its network under One FedEx, embed AI and data tools, grow higher-margin verticals, and drive structural cost reductions.
- Q3 EPS is expected to exceed consensus, supported by resilience at FedEx Express and B2B-focused operations.
- The DRIVE initiative and One FedEx model target $1.0 bln in permanent cost savings in FY26.
- Network transformation includes air/ground integration, facility rationalization, and AI-driven routing and pricing optimization.
- The InPost acquisition strengthens FDX’s European last-mile and out-of-home delivery capabilities while improving delivery economics.
- FedEx Freight remains on track to be spun off as a standalone public company on June 1, 2026.
- FY29 targets call for mid-single-digit revenue growth, margin expansion, and double-digit EPS growth.
Briefing.com Analyst Insight
FDX is accelerating a multi-year shift from a legacy carrier to a technology-enabled industrial logistics network, with AI-driven optimization and mix improvement at the core of its strategy. The Freight spin-off should unlock value and sharpen operational focus, while InPost enhances last-mile efficiency without adding heavy fixed costs. Although macro headwinds remain a near-term challenge, stronger-than-expected 3Q EPS guidance and incremental cost savings improve visibility. If FDX delivers on its FY29 margin and earnings targets, the transformation could drive a higher-quality earnings profile and support a meaningful re-rating of the stock. Execution will be critical, however, as integrating technology, restructuring the network, and separating Freight simultaneously increases operational complexity over the next 18 months.
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