U.S. Retail Sales Weaker; Fed Rate Outlook Tightens, Equities Split, Treasuries Rise

U.S. retail sales softer than expected on February 10 (2026-02-10) deepen expectations of U.S. central bank rate cuts this year, while Treas yields fall to near one-month lows. Major indices opened split: Dow Jones up +0.49% to 50,380.93, S&P 500 +0.16% to 6,975.82, Nasdaq +0.08% to 23,257.89, and the tech index +0.06%. The dollar index touched 99.185, crude oils and gold gained, and Bitcoin declined. The 10-year U.S. Treasury yield fell to 4.15%. Data showed U.S. retail sales growth eased in December to 0.0% (vs. 0.4% expected and 0.6% in November), with core retail sales down 0.1% and a seasonal revision to prior months. This weak momentum is elevating the probability of three rate cuts in 2026, with the 1-yr-ahead breakeven for the first cut at 4.35% and a 10-bp increase in the 2-yr breakeven. Markets now closely watch the January nonfarm payroll report for employment and the seasonal "baseline" revision, which could signal further softening in labor market gains and consumer spending.