MPC Morning Call 13th February 2026 – “Higher for Longer” Rates and Software fears trigger sea of red on Wall St
Stocks closed in a sea of red overnight, as traders moved away from equities and into bonds a day ahead of key inflation data, sending yields lower.
Technical issues with youtube this morning MPC Morning Call 13th February 2026 – “Higher for Longer” Rates and Software fears trigger sea of red on Wall St Stocks closed in a sea of red overnight, as traders moved away from equities and into bonds a day ahead of key inflation data, sending yields lower. A stronger-than-expected U.S. jobs report dominated market sentiment over the past 24–36 hours, sharply reducing expectations for near-term Federal Reserve rate cuts and triggering a broad risk-off move. Payrolls rose 130,000 in January with unemployment dipping to 4.3%, though prior revisions revealed some underlying labour weakness. CME FedWatch now prices above a 90% chance the Fed holds at the March FOMC meeting, cementing the "higher for longer" narrative. With government shutdown risks, an upcoming Fed chair change, and Friday's CPI print still ahead, policy uncertainty remains elevated. U.S. equities sold off broadly, with the Dow down 1.34%, the S&P 500 off 1.57%, and the Nasdaq falling 2.04%, as tech and rate-sensitive growth names underperformed. Market breadth was negative across both the NYSE and Nasdaq, and the VIX jumped to 20.83, reflecting more fragile risk sentiment. Q4 2025 earnings are nonetheless running ahead of expectations with double-digit growth overall, though individual names saw sharp divergence — Cisco slumped over 12% on margin misses tied to AI-driven memory chip costs, while McDonald's and Walmart hit record highs on solid consumer demand. After the close, Applied Materials projected second-quarter results above estimates, citing accelerating AI processor and high-bandwidth memory investment, while Rivian beat revenue expectations and flagged a 53% jump in 2026 deliveries from its lower-priced R2 SUV, albeit with significantly higher capital expenditure. These results highlight a market increasingly separating AI infrastructure winners from those caught in its cost pressures. In commodities and currencies, gold and silver retreated as the stronger dollar and reduced Fed-cut bets weighed on precious metals, though geopolitical tensions between the U.S. and Iran limited the downside. Oil fell around 2.6–2.7%, with Brent slipping back below $70, as inventory builds and demand concerns offset Middle East supply risks. The U.S. dollar remains broadly supported by robust data and the higher-for-longer rate profile, while Treasuries caught a bid as traders positioned defensively ahead of Friday's CPI release. Commodities, Energy & FX ASX Overnight: SPI 8895 (-0.87%) The Day Ahead: The ASX will be dominated by earnings again today. Corporate news COH earnings – Click here to read summary WBC Earnings - Click here to read summary
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