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US markets traded quietly on Monday as Presidents’ Day shut cash trading and thinned liquidity. Stock index futures held near flat lines. Bond yields stayed steady after softer US inflation data. The print reinforced expectations for Federal Reserve rate cuts later in 2026. Markets reopen fully on Tuesday.
At 10:35 a.m. in New York, S&P 500 futures remained unchanged, and Dow futures rose 0.2%. Europe’s Stoxx 600 gained 0.2% and the MSCI World Index also held near flat. In currencies, the Bloomberg Dollar Spot Index added 0.1%. The euro slipped 0.1% to $1.1854. Sterling eased 0.1% to $1.3632, and the yen weakened 0.4% to 153.36 per dollar.
Bitcoin fell 2% to $67,415.2 and Ether slipped 0.9% to $1,940.23. WTI crude rose 0.8% to $63.37 a barrel. Spot gold dropped 1.3% to $4,977.27 an ounce.
US equity futures moved in a tight range after Friday’s inflation data. Investors also waited for fresh catalysts. Europe posted small gains, and NatWest Group Plc climbed about 4% after Citigroup Inc. raised its price target on the UK lender.
“The backdrop for equities is positive post CPI,” said Andrea Gabellone, head of global equities at KBC Securities. “More dispersion” could follow as investors reassess AI-linked sectors, he said.
Thin volumes shaped the session. The United States market holiday reduced participation. Mainland China also remained closed for the Lunar New Year break, which limited regional trading flows.
Treasury trading stayed calm after yields hit their lowest levels since December on Friday. The 10-year US yield held near 4.05% in the latest session. Germany’s 10-year yield eased to 2.74%, and the United Kingdom’s fell to 4.39%.
Inflation data helped cement the rate outlook. Traders fully priced a first Fed cut for July. They also kept a strong probability in June, based on the market positioning described in the wrap.
Friday’s bond rally led to shorter maturities, which react faster to Fed policy shifts. The two-year Treasury yield fell toward 3.4%, marking the lowest level since October. It also marked its lowest closing level since 2022, according to the rate-cut positioning analysis.
Attention now shifts to near-term US data and policy signals. ADP’s next NER Pulse is scheduled for February 17. Investors also expect minutes from the Fed’s January meeting this week.
Technology shares remained sensitive to the AI trade’s cross-currents. NASDAQ 100 futures fell 0.5%. Strategists warned that AI could disrupt some workflows and pressure revenues in exposed sectors.
Banks also built products around the split. Goldman Sachs Group Inc. launched a software pair-trade basket. The basket goes to long-term firms, seen as harder for AI to displace. It shortens businesses viewed as more exposed to automation.
Gold slipped below $5,000 as traders took profits after Friday’s jump. Lighter holiday dealing amplified moves. Crypto also stayed under pressure after a weekend rally faded, leaving Bitcoin volatile.
Warner Bros. Discovery weighed reopening sale talks with Paramount Skydance after a revised hostile offer surfaced.
The possible studio deal could trigger a renewed bidding contest with Netflix for control of the asset.
Alibaba Group Holding launched a major upgrade of its flagship AI model.
NatWest Group jumped about 4% after Citigroup lifted its price target to a Street-high.
Citi also raised NatWest's pretax profit and EPS forecasts after the Evelyn Partners acquisition and stronger net interest income.
Orsted rose as much as 4% after an upgrade from Kepler Cheuvreux.
Volkswagen planned a 20% cost cut by the end of 2028, according to Manager Magazin.
A group led by Macquarie Asset Management agreed to buy Qube Holdings in an A$11.7 billion deal.
Norsk Hydro fell 4.4% after downgrades by Goldman Sachs and RBC Capital Markets.
KGHM slid 3.3% after Citi cut the stock to sell on valuation concerns.
Pinewood Technologies dropped 32% after Apax Partners ended its possible cash-offer process.
Goldman also launched an ‘AI-proof’ software pair-trade basket, long perceived winners and short potential AI-disrupted workflows.
As full trading resumes, investors will look to upcoming economic data and Federal Reserve signals for clearer direction on rate cuts, bond yields, and overall market momentum.
Also Read: US Stock Market Today: S&P 500 Edges Higher as Treasury Yields Fall on Softer Inflation Data
