U.S. stocks edged higher on Tuesday, led by a rise in the Dow Jones Industrial Average, as softer-than-expected retail sales strengthened the case for potential Federal Reserve rate cuts later this year. The Dow rose roughly 0.4% to extend gains from a record close, while the S&P 500 added a slight increase and the Nasdaq Composite hovered near the flatline amid mixed performance from major technology names.
The softer retail spending data signaled a cooling consumer backdrop at the end of the holiday season, prompting investors to increase bets that borrowing costs could fall sooner than previously expected. Attention now turns to a crucial stretch of economic releases, including the delayed January jobs report and fresh inflation data, that could reshape expectations for monetary policy and market direction.
Market Movers:
- Spotify (SPOT) +15%: Shares surged after strong quarterly results and upbeat user guidance pointed to continued subscriber momentum and improving operating profitability. Investors responded to signs the streaming giant can expand margins even as competition intensifies.
- Datadog (DDOG) +13%: The cloud-software firm climbed following better-than-expected revenue guidance that underscored resilient demand for AI-driven observability and security tools. Continued product investment helped offset slightly softer near-term earnings expectations.
- Credo (CRDO) +8%: Shares jumped after the company sharply raised its revenue outlook, highlighting accelerating demand tied to high-speed connectivity and AI infrastructure. Guidance implying triple-digit annual growth reinforced bullish sentiment around the semiconductor supplier.
- Clear Channel Outdoor (CCO) +8%: The stock gained after an all-cash acquisition agreement offered shareholders a sizable premium and clearer strategic direction. The buyout signals renewed private-equity interest in traditional media assets with stable cash flows.
- ON Semiconductor (ON) +3%: Shares rose modestly despite cautious near-term revenue guidance, as investors focused on long-term positioning in automotive, industrial, and AI power solutions. Strong free-cash-flow generation and shareholder returns provided additional support.
- Upwork (UPWK) -16%: The freelance-platform operator fell after weaker short-term guidance overshadowed otherwise stable full-year expectations. Concerns about demand visibility and pricing pressure weighed on sentiment.
- REGENXBIO (RGNX) -12%: Shares dropped sharply after regulators issued a complete response letter for a key gene-therapy candidate, signaling additional clinical hurdles ahead. The setback raised uncertainty around timelines and commercialization prospects.
- Under Armour (UAA) -8%: The apparel maker slid following an analyst downgrade citing challenges in reviving North American demand and growing earnings. Competitive pressures and weak direct-to-consumer trends remain key concerns.
Retail Weakness Fuels Rate-Cut Narrative
Flat retail-sales growth reinforced evidence that consumer spending, a pillar of economic resilience, may be softening. Markets interpreted the slowdown as increasing the likelihood of Federal Reserve easing, particularly if upcoming labor and inflation data confirm a broader cooling trend. Rate expectations remain fluid, but the shift toward potential cuts has provided near-term support for equities sensitive to borrowing costs and liquidity conditions.
Earnings and Corporate Developments Stay in Focus
Beyond macro data, investors continued digesting a fresh wave of corporate results across technology, consumer goods, and healthcare. Mixed guidance trends highlight a market demanding clearer growth visibility rather than simply rewarding headline earnings beats. Major corporate deal activity and strategic maneuvers also underscore how companies are repositioning for a slower-growth environment and evolving competitive landscape.
Commodities and Crypto Reflect Fragile Sentiment
Gold and bitcoin remained volatile after last week’s sharp swings, with both assets attempting to stabilize as investors reassess risk exposure. Persistent turbulence in alternative assets mirrors broader uncertainty across financial markets. Such cross-asset volatility often signals fragile confidence, particularly when paired with shifting expectations for interest rates and economic momentum.
Looking Ahead
Markets now hinge on the next wave of economic data, especially employment and inflation readings that could confirm the emerging narrative of policy easing. Clearer signals from the Federal Reserve will likely determine whether the current equity rebound can extend. Until then, trading conditions may remain uneven, with investors balancing hopes for rate cuts against lingering concerns about growth, earnings durability, and global financial stability.