Wall Street held US equities near record levels on Tuesday after a softer retail sales report strengthened expectations that Federal Reserve rate cuts could still arrive later this year. Treasury yields fell on the data, while Bitcoin slid as traders reduced risk ahead of major labor and inflation releases.

The US government reported that consumer spending lost momentum at the end of 2025. The reading pushed some investors to shift toward bonds and reassess growth forecasts for early 2026.

US Retail Sales Flat Points to Slower Consumer Spending Momentum

Retail sales stayed unchanged in December 2025 after a 0.6% increase in November, missing forecasts that called for a modest rise. The report showed broad softness across categories, with declines in eight of 13 major groups.

Core measures also signaled weaker underlying demand. The Census Bureau data showed “control-group” sales, which feed into GDP estimates for goods spending, fell 0.1% after a downward revision to the prior month. Analysts often track that measure because it helps shape quarterly growth models.

Several segments posted notable pullbacks, including furniture and some discretionary goods. Meanwhile, a few areas, such as gasoline stations and food-related spending, held steadier, which limited the headline decline. The mix suggested consumers stayed selective rather than broadly retrenching.

Economists also flagged the timing effect from the holiday season. Some spending may have shifted earlier into November as promotions intensified, leaving December with less follow-through. This pattern can leave Q1 consumption vulnerable if jobs and wage growth cool.

Treasury Yields Fall as Rate-Cut Expectations Firm Ahead of Jobs Data

Bond markets reacted quickly. The benchmark 10-year Treasury yield fell about six to seven basis points to around 4.13%–4.14%, its lowest level in roughly a month, as traders priced a slightly higher chance of multiple rate cuts.

Futures pricing continued to imply at least two cuts as a base case, with the path beyond that tied to incoming labor and inflation data. Investors now focus on whether growth slows “just enough” to justify easier policy without triggering recession concerns.

Attention shifts next to the January US payrolls report due Wednesday. Forecasters surveyed in public previews expect job growth near the mid–five-figure to high–five-figure range, while they see unemployment holding around 4.4%. Many also expect annual benchmark revisions to reduce previously reported job gains for the year through March 2025.

If payrolls surprise on the downside, rate-cut expectations could firm further and lift bond prices again. If payrolls beat estimates, yields may rebound as markets reassess how quickly inflation can cool.

S&P 500 Steady Near Records as Traders Rotate Across Tech and Cryptocurrency

US equities showed limited index movement, but underlying participation widened. The S&P 500 stayed close to flat after a two-day rally, while a majority of its components finished higher. Chipmakers slipped after a strong run, while a software-focused ETF extended a multi-session rebound.

Strategists continued to debate how quickly artificial intelligence will reshape software business models. Some banks argued that the recent software sell-off priced in disruption too aggressively, which created room for a tactical bounce in higher-quality names.

Moreover, crypto moved the other way as risk appetite cooled. Bitcoin price fell to around the high-$60,000 range during the session, with traders watching whether upcoming macro data changes the rate outlook and the dollar’s direction.

Corporate Highlights 

• Alphabet Inc. prepared a large debt sale to fund AI investment needs.

• Apple Inc. and Google committed to app store changes under UK digital market rules.

• Meta Platforms Inc. increased safety messaging ahead of a major trial on teen product design.

• Spotify Technology S.A. surged after reporting record quarterly user additions.

• The Coca-Cola Company issued a conservative 2026 sales outlook and reviewed challenges in China.

• S&P Global Inc. slid after a 2026 profit forecast missed expectations.

• European Wax Center surged after agreeing to go private in an all-cash deal.

• BP halted share buybacks to support its balance sheet.

• Barclays PLC announced plans to return at least £15 billion to shareholders through 2028.

Market volume also stayed elevated across equities, reflecting heavy participation even as investors waited for confirmation from jobs and CPI reports later this week.

Also Read: US Stock Market Today: S&P 500 Rises as Semiconductors Lead Recovery and Bitcoin Bounces