Stocks slip as yields rise; rotation lifts energy, staples

End-of-day market wrap: rotation reasserts itself as yields climb#

An early risk-on tone gave way to late-day selectivity, with investors leaning back into defensives and commodity-linked cyclicals while trimming richly valued growth and rate-sensitive financials. According to Monexa AI, the S&P 500 ^SPX finished at 6,941.46 (−0.36, −0.01%), the Dow Jones Industrial Average ^DJI closed at 50,121.39 (−66.76, −0.13%), and the Nasdaq Composite ^IXIC settled at 23,066.47 (−36.01, −0.16%). The NYSE Composite ^NYA outperformed, ending at 23,470.65 (+72.54, +0.31%). Volatility eased into the close: the CBOE Russell 2000 Volatility Index ^RVX slipped to 22.99 (−0.61%), and the CBOE VIX ^VIX fell to 17.65 (−0.79%).

The afternoon shift tracked a familiar 2026 pattern: stronger labor data firmed Treasury yields and nudged out near-term rate-cut expectations, a setup that typically pressures high-duration tech and financials while bolstering energy, materials, and staples. Late-day commentary on Bloomberg’s closing coverage highlighted that stocks were largely steady even as yields rose following better-than-expected jobs data, reinforcing a higher-for-longer rates narrative that kept investors disciplined rather than euphoric (Bloomberg. A parallel thread from the policy front added nuance: Fed Governor Adriana Kugler Miran indicated rate cuts remain possible despite robust hiring, tempering the most hawkish takes without reversing the immediate market impulse toward defensives (Bloomberg.

Closing indices table & analysis#

The S&P 500 attempted to make a sustained push above 6,990 intraday, printing a day high of 6,993.48 before fading into the bell. Importantly, the index remains within reach of its 7,002.28 year high and continues to trade above the 50-day average (6,892.25) and well over the 200-day (6,484.74), underscoring that the primary uptrend remains intact even as the leadership baton keeps passing between growth and defensives (Monexa AI). Turnover on the S&P 500 came in below average at 3.72B shares versus a 5.15B average, which tends to blunt the read-through from today’s modest losses.

The Nasdaq’s −0.16% close masked dramatic crosscurrents: memory and select chip-equipment names ripped higher even as software and some legacy tech sagged. Meanwhile, the NYSE Composite’s +0.31% emphasized the day’s tilt toward cyclicals and defensives—energy, materials, staples, and utilities—over rate-sensitive growth and market-structure financials.

Macroeconomic analysis: strong jobs, firmer yields, and the late-day tone#

Markets spent the afternoon digesting stronger-than-expected labor data that pushed Treasury yields higher, consistent with coverage throughout the session on Bloomberg’s Closing Bell and The Close (Bloomberg. CNBC similarly flagged the 10-year yield’s move up after the jobs beat, a classic headwind for long-duration equities even when growth remains solid (CNBC. The policy message, however, was not one-way hawkish: a Federal Reserve governor said rate cuts are still possible despite the hot print, a signal that the Fed is balancing resilience with risk management rather than outright tightening bias (Bloomberg.

That mix—firm growth, slower glide path to easing, but no new tightening threat—helps explain the bifurcation at the close. Investors trimmed richly valued software and parts of megacap tech but added to cash-generative defensives and commodity plays that benefit from nominal growth and inflation hedging. The resulting posture was not risk-off so much as a cautious, selective rotation—profit-taking where multiples are stretched; incremental bids where cash flows and pricing power look durable.

Looking ahead, the calendar turns to a holiday-shortened week with the January FOMC Minutes, the PCE inflation report, and flash PMI surveys—all focal points for validating or challenging the market’s current path of fewer, later cuts. As Barron’s and Bloomberg previewed, Monday’s Presidents’ Day closure will compress liquidity into the remainder of the week while late-cycle data and earnings updates keep dispersion elevated (Bloomberg.

Sector analysis: defensives and commodities outpace growth and financials#

Monexa AI’s closing sector performance showed a stark split that intensified into the final hour. Technology, Industrials, and Financials finished lower, while Basic Materials, Communication Services, Healthcare, Consumer Defensive, Real Estate, and Energy advanced. Notably, there is a divergence between the broad sector scorecard and the intraday heatmap: the heatmap highlighted especially strong Energy and Utilities momentum and pronounced selling pressure in market-structure Financials and software-heavy Tech; the sector totals at the close registered a more modest Energy gain and a positive read on Real Estate despite a major drawdown in a services heavyweight. We highlight that discrepancy below and default to Monexa AI’s sector-closing table for the final tally while using the heatmap to explain within-sector leadership and laggards.

Sector performance table (close)#

The dispersion inside these sector prints was the story. In Technology, large-cap software and legacy tech dragged the group even as semiconductors and select hardware rallied hard. According to Monexa AI’s heatmap, memory and equipment outperformed—MU closed +9.94%, SNDK surged +10.65%, and LRCX rose +3.76%—while software and services sold off, with IBM down −6.50% and DDOG lower −1.80%. NVDA finished +0.80%, a relatively muted move that steadied the cap-weighted complex.

Energy’s leadership theme came through more clearly on the heatmap than in the closing sector aggregates, with a broad advance across producers, integrated majors, and oilfield services: EOG +4.90%, COP +3.45%, XOM +2.66%, SLB +3.07%, and BKR +3.55%. The case for Energy in this tape remains straightforward: positive operating leverage to nominal growth, inflation-hedging characteristics, and improving free cash flow capture investors’ attention when yields creep higher.

Financials were the session’s weakest cohort. Selling concentrated in market-structure, crypto-linked, and retail brokerage names: ICE fell −7.78%, COIN declined −5.73%, and HOOD dropped −8.91%. Large banks underperformed in sympathy, with JPM down −2.33%, while select insurers like AIG bucked the trend, finishing +4.59% (Monexa AI). The message: higher-for-longer may compress multiples where volumes and beta are needed to power earnings, while insurance’s rate tailwinds and balance-sheet positioning provide ballast.

Healthcare and Consumer Defensive sectors carried a defensive bid. Providers and select biopharma advanced—UHS +8.71%, HCA +5.86%, GILD +5.82%—while mega-cap managed care UNH added +2.08%. Staples strength was broad: KDP +4.11%, EL +4.03%, KO +2.33%, WMT +1.63%, and COST +0.71% supported the theme. Utilities were mixed on the day’s sector print but showed notable stock-level outperformance—GEV +4.16%, CEG +2.11%, PCG +2.09%, and SRE +1.65%—consistent with late-day defensiveness.

Industrials exhibited polarized action: power and heavy equipment names rallied—GNRC +17.93%, ETN +4.93%, CAT +4.40%—but airlines and engineering services lagged, with LUV −4.88% and J −5.82% (Monexa AI). Basic Materials benefited from metals and chemicals strength—DD +4.25%, ALB +4.08%, FCX +3.43%, MOS +3.39%—even as construction materials like MLM slumped −6.56%.

Real Estate closed higher on the sector tape but masked significant dispersion. The group’s services heavyweight CBRE sank −12.24%, while healthcare REITs WELL +3.51% and VTR +2.13% and data center operator EQIX +1.26% found bids. This divergence underlines the regime: investors are rewarding stable, cash-yielding subsegments and punishing perceived cyclicality or event risk.

Company-specific insights: late-session movers and headlines#

Semiconductors were the inside-out driver of tech resilience into the close. MU ended +9.94% after a string of bullish commentary around high-bandwidth memory and AI data-center demand extended its recent run, with Monexa AI flagging upgraded Street targets and better recent results as supports. Storage peer SNDK rallied +10.65%, and equipment leader LRCX added +3.76%, reinforcing the idea that the supply chain is synchronizing around AI infrastructure despite macro crosswinds. In contrast, software and services saw selective de-risking: IBM fell −6.50%, while observability platform DDOG dipped −1.80% even after reporting a 29% revenue increase in Q4 (per company filings), a reminder that factor and rates pressure can overshadow strong prints when multiples are full (Datadog release.

Telecom carriers extended their relative strength. TMUS climbed +5.07% after topping estimates and showcasing robust postpaid momentum, with T +3.87% and VZ +3.33% also higher. The carrier complex’s cash generation and defensive positioning resonated as yields pressured high-duration growth (Monexa AI, earnings coverage via Zacks and Bloomberg.

Financials’ idiosyncratic pain points concentrated in market-structure and crypto adjacency. ICE slid −7.78%, HOOD dropped −8.91%, and COIN fell −5.73%. Coinbase’s strategic pivot toward institutions continues to reshape its revenue mix—Monexa AI notes that institutional trading now represents 81% of trading-volume dollars, and subscription revenue remains relatively resilient. The company is slated to discuss its Q4 and full-year 2025 results on February 12, which could influence after-hours sentiment and next-day trading (Coinbase IR.

Healthcare outperformed on the back of providers and biopharma. UHS jumped +8.71% and HCA gained +5.86%, while large-cap GILD advanced +5.82%. Managed care bellwether UNH rose +2.08%, an important stabilizer for broader healthcare indices. Conversely, research services player CRL fell −8.42%, underscoring stock-specific risks even within favored sectors.

In Industrials, the standout was GNRC, up +17.93%, alongside electrical equipment champion ETN +4.93% and heavy machinery leader CAT +4.40%, a trio that reinforced the notion of resilient infrastructure and grid investment. Airlines and engineering services weighed, with LUV −4.88% and J −5.82%.

Energy’s breadth remained a positive index contributor: XOM +2.66%, COP +3.45%, EOG +4.90%, SLB +3.07%, and BKR +3.55%. The sector’s free-cash-flow and capital return profiles look particularly compelling when the discount rate rises and duration valuations compress.

Real Estate’s crosscurrents were defined by CBRE, which fell −12.24% ahead of its quarterly report slated for February 12 (per Monexa AI and analyst previews), offset by gains in healthcare REITs WELL and VTR and data-center operator EQIX. The bifurcation between services-heavy and core REITs maps to the market’s preference for visible cash flows and secular demand moats.

Defense and government services flashed risk after reports that the Pentagon plans to penalize habitually late contractors. LDOS dropped −11.15%, while primes LMT −0.14% and NOC −0.90% softened. The White House issued an executive action directing the DoD to identify underperformers and consider remedies, including potential restrictions on buybacks and dividends, with Bloomberg and the Wall Street Journal noting that enforcement is being formalized (White House; Bloomberg; WSJ. Near-term, this policy overhang argues for patience until clarity emerges around contract-specific implications.

Finally, software saw a stark divergence. U cratered −26.32% despite a Q4 revenue beat at $503.1 million after the company issued a softer-than-expected Q1 revenue outlook and a broker cut its target to $29, raising demand and bookings visibility questions (Monexa AI, company materials). By contrast, DDOG continues to grow at a near-30% clip—its Q4 revenue rose 29% year over year and a major bank set a $160 price target—yet the stock was still dragged modestly lower in today’s growth-factor re-rating (company release linked above).

Extended analysis: end-of-day sentiment and next-day indicators#

Three elements defined the closing hour. First, breadth improved away from megacaps: the NYSE Composite closed +0.31% even as the Nasdaq finished lower, a tell that cyclicals and defensives carried the tape while richly valued growth faced a yield headwind (Monexa AI). Second, volatility receded—VIX 17.65 (−0.79%) and RVX 22.99 (−0.61%)—consistent with rotation rather than panic. Third, volume was lighter than average on the S&P 500, which often dampens the signal strength of minor declines.

Into after-hours and the next session, dispersion catalysts are clear. Coinbase’s Thursday earnings should influence sentiment across crypto-adjacent financials, especially after today’s −5.73% pullback in COIN and −8.91% in HOOD (Monexa AI; Coinbase IR. CBRE’s print will test appetite for Real Estate services after the stock’s −12.24% downdraft. In Tech, the semis-versus-software divide is likely to persist: the memory upcycle and AI-capex supply chain are providing durable tailwinds to MU, SNDK, and LRCX, whereas enterprise software with premium multiples remains more sensitive to incremental yield backup and any hint of demand normalization.

On the macro front, stronger jobs and resilient nominal growth underpin the day’s sector winners. If the next data set—PCE and PMIs—keeps the growth narrative intact without re-accelerating inflation, the market’s preference for free-cash-flowing defensives (staples, energy, select utilities) and hard-asset cyclicals (materials, diversified industrials) should remain in place. Conversely, any upside surprise in inflation proxies could add pressure to long-duration equities and keep Financials choppy, particularly exchanges and crypto-linked names where volume elasticity is key to estimates.

We also flag policy risk in Defense. The DoD’s performance review initiative introduces a tangible overhang on primes’ capital return and margin narratives. While today’s price action in LMT and NOC was modest relative to LDOS, the policy trajectory warrants elevated monitoring of program-by-program delivery metrics and any updates on remediation plans (sources linked above).

A brief note on data discrepancies: Monexa AI’s sector-closing table shows Energy +0.22% and Utilities −0.29%, while the intraday heatmap highlighted notably stronger Energy and Utilities moves and weaker Real Estate due to stock-specific selloffs. Given our end-of-day focus, we anchor on the sector-closing table for headline attribution and use the heatmap to contextualize where flows concentrated beneath the surface. This approach reconciles the differing time windows and universes captured by each dataset and keeps the analysis faithful to the official close while still explaining the leadership that defined the last hour.

Conclusion: what mattered from midday to the bell—and what’s next#

From midday optimism to the final print, the market chose rotation over risk escalation. The major averages finished near flat, but the composition changed meaningfully: defensives and commodity-levered cyclicals outperformed, while tech (ex-semis) and market-structure financials lagged. According to Monexa AI, the S&P 500 held its uptrend just a breath below record levels at 6,941.46 (−0.01%), the Dow slipped to 50,121.39 (−0.13%), and the Nasdaq eased to 23,066.47 (−0.16%), with the NYSE Composite’s +0.31% close illustrating where late-day bids congregated. Volatility bled lower, and volumes were subdued—classic tells of a market adjusting exposures rather than abandoning risk.

For after-hours and the next session, the setup is straightforward. Watch:

— Whether semiconductors continue to shoulder tech leadership while software digests valuation. MU +9.94%, SNDK +10.65%, and LRCX +3.76% argue that AI-infrastructure momentum still has legs even as rates wobble.

— How crypto-adjacent financials trade around Coinbase’s earnings after a sectorwide selloff today. COIN −5.73% and HOOD −8.91% leave room for a sharp reaction depending on mix, subscription resilience, and regulatory color (Coinbase IR.

— Policy risk for Defense primes. The Pentagon’s review of habitually late contractors and potential penalties could reshape capital returns and margins—keep an eye on disclosures and contractor commentary (White House, Bloomberg, WSJ links above).

— The macro calendar. With Presidents’ Day up next and a compressed week to follow, the FOMC Minutes, PCE, and PMIs will either validate the current higher-for-longer, rotation-friendly stance or pull forward a broader risk reset if inflation re-firms (event previews via Bloomberg.

In a market where leadership is rotating and idiosyncratic risk is rising, active selection and risk budgeting matter. The data favor maintaining a defensive sleeve—staples, healthcare, select utilities—while keeping exposure to energy and materials that benefit from nominal growth and inflation hedges. Within technology, the semiconductor complex retains fundamental support from AI infrastructure demand, but software and market-structure financials look more yield-sensitive and headline-prone. The closing prints confirm that posture.

Key takeaways#

The indices were little changed, but the message was clear: rotation, not retreat. Stronger jobs increased yields and dialed back near-term cut hopes, pushing investors toward cash-flowing defensives and commodity-levered cyclicals while pressuring high-duration tech and market-structure financials. Into after-hours, company-specific catalysts—most notably Coinbase—will keep dispersion high, and next week’s macro slate will determine whether this selective risk-on can persist just below all-time highs.