5 February 2026
US stocks traded mixed on Wednesday. The Dow Jones Industrial Average rose 0.5%, whereas the tech-heavy Nasdaq slid 1.5% as software stocks extended declines and chipmaker shares fell following earnings releases.
US Treasuries were range-bound, and the yield curve steepened modestly following mixed economic data and the US Treasury’s quarterly refunding announcement. 10-year yields closed unchanged at 4.27%.
European stocks were mixed on Wednesday as investors await tech companies’ earnings results. Euro Stoxx 50 nudged 0.4% lower. The German DAX lost 0.7%, while the French CAC rose 1.0%. In the UK, the FTSE 100 was up 0.9%.
European government bonds were mixed. 10-year German bund yields fell 3bp to 2.86%, and 10-year French bond yields edged lower by 2bp to 3.45%. In the UK, 10-year gilt yields edged higher 3bp to 4.55%.
Asian stock markets lacked clear direction on Wednesday, amid growing concerns about potential disruptions to some business models due to the wider use of artificial intelligence. Regional software stocks tracked their US peers’ overnight losses lower. Japan’s Nikkei 225 lost 0.8%, while Korea’s Kospi advanced 1.6% following Tuesday’s strong rebound. China’s Shanghai Composite climbed 0.8%, whereas Hong Kong’s Hang Seng closed almost flat amid continued weakness in tech shares. Elsewhere, India’s Sensex edged 0.1% higher.
Crude oil prices extended rallies on Wednesday. WTI for March delivery settled 3.1% higher at USD65.1 a barrel.
In the US, the ISM services index held steady in January at 53.8, after a revised reading in December, as the new orders and employment sub-indices moderated. The ADP employment increased less than expected in January, rising by 22k, after a downwardly revised 37k in December, amid job losses in the manufacturing sector.
In the eurozone, headline inflation dropped to 1.7% yoy in January, from 2.0% yoy in December, weighed down by a fall in energy prices.
The European Central Bank remains firmly on hold, and is expected to keep interest rates at 2.00%, but the disinflationary impact of a stronger currency could open the door to a further cut later in the year.
The Bank of England is expected to leave interest rates on hold at 3.75%, but moderating wage growth and softer services inflation herald a modest easing in Q2.
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