Dow hits third straight record but tech slips ahead of key jobs data

• December retail sales came in flat versus expectations of a 0.4% rise, with analysts noting that 'consumer spending has finally caught up with consumer sentiment' in a negative way
• U.S. 10-year Treasury yields fell to 4.15%, their lowest level since mid-January, bolstering expectations of a potential Fed rate cut in June
• The Employment Cost Index rose 0.7% in Q4 with compensation costs up 3.4% year-over-year, the slowest pace since early 2021, indicating a moderating labor market without adding meaningful inflation pressure

Market Summary: Dow Reaches Third Record, Tech Weakens Ahead of Jobs Data

Market Performance:

The Dow Jones closed at 50,188, up 52 points (+0.1%), marking its third consecutive record close. However, other major indexes declined: the S&P 500 fell 0.3% to 6,942, the Nasdaq dropped 0.6% to 23,102, and the Russell 2000 lost 0.4% to 2,679.

Key Economic Data:

December retail sales came in flat, missing the 0.4% expected rise, signaling cooling consumer spending that aligns with weak sentiment. The Employment Cost Index rose 0.7% in Q4 (below 0.8% forecast), with year-over-year compensation costs up 3.4%—the slowest pace since early 2021. The NFIB Small Business Optimism Index declined in January, ending a two-month winning streak.

Market Drivers:

Investors are adopting a selective approach, favoring companies with strong balance sheets amid signs of economic deceleration. U.S. 10-year Treasury yields fell to 4.15%, their lowest since mid-January, supporting expectations of a potential Fed rate cut in June. Wednesday's January jobs report is the week's focal point, with Friday's Consumer Price Index providing inflation insights.

Corporate Highlights:

ON Semiconductor and CVS Health reported better-than-expected Q4 earnings. Ford and Robinhood earnings are due after hours. Paramount Skydance received a sweetened $30/share bid.

Analyst Commentary:

Experts note the market has entered consolidation, with AI and data center stocks driving tech gains while broader advances remain limited by economic cooling. Labor market moderation reduces inflation pressure but heightens Fed concerns about employment mandate risks.