Schwab Market Update
Stocks Up Ahead of Amazon Earnings, Jobs Report

Published as of: February 6, 2025, 9:15 a.m. ET
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The markets | Last price | Change | % change |
---|---|---|---|
S&P 500® index | 6,061.48 | +23.60 | +0.39% |
Dow Jones Industrial Average® | 44,873.28 | +317.23 | +0.71% |
Nasdaq Composite® | 19,692.33 | +38.31 | +0.19% |
10-year Treasury yield | 4.42% | Unchanged | -- |
U.S. Dollar Index | 107.98 | +0.40 | +0.37% |
Cboe Volatility Index® | 15.85 | +0.08 | +0.01% |
WTI Crude Oil | $71.38 | +0.35 | +0.49% |
Bitcoin | $98,472.87 | +1,009.88 | +1.04% |
(Thursday market open) After climbing two days in a row amid easing tariff concerns, lower yields, and mixed earnings news, stocks inched up again ahead of Friday's pivotal January nonfarm payrolls report. Trading might be cautious as investors await the big number. The S&P 500® index (SPX) is up slightly this week, a sharp contrast to the 1.6% drop out of the gate Monday.
An appetizer to the payrolls report arrived this morning with weekly initial jobless claims. A small rise to 219,000 slightly topped analysts' estimates but was near the mid-point of recent data and appears unlikely to have much market impact. Analysts now see January jobs growth of around 170,000, up from the consensus earlier this week, with unemployment staying at 4.1% and hourly earnings growth up 0.3%. December saw 256,000 jobs added, well above the three-month average of 170,000, but that number could be revised when the data arrive at 8:30 a.m. Friday.
Ahead of jobs, earnings occupy the driver's seat with Amazon (AMZN) on tap later and investors assessing results from MicroStrategy (MSTR), Ford (F), Eli Lilly (LLY), Qualcomm (QCOM), and Arm Holdings (ARM). As of mid-week, blended fourth quarter S&P earnings growth including companies that have reported and estimates for those yet to report was 12%, up from 9.5% entering earnings season. Concern centers on falling estimates for full-year 2025 S&P 500 EPS growth, now at 12.9% and down from 14% a month ago. With valuations historically high, any sign of earnings growth failing to keep up could be a shot across the bow.
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Three things to watch
- Amazon: After mixed news on cloud growth and demand from competitors Microsoft (MSFT) and Alphabet (GOOGL), Amazon's Amazon Web Services (AWS) cloud platform growth will be in the spotlight when Amazon releases earnings after the close today. Alphabet's slower-than-expected 30% quarterly cloud gains at first aroused suspicion of general retreat, especially after Microsoft's cloud growth disappointed. But in its earnings call, Alphabet cited capacity restraints as one reason for the sequential slowdown and discussed plans to continue its heavy spending. That reinforces the importance of digging deeper into the headline numbers when Amazon reports. Last time Amazon reported, its AWS growth accelerated rapidly from a year earlier to 19%. It also cited growth in its advertising business and announced heavy capital spending on AI. On the call, investors might home in on anything Amazon has to say about China's DeepSeek AI model. Such technology potentially could threaten AWS with cheaper cloud competition down the road.
- Yield retreat mulled: As the benchmark 10-year Treasury note yield fell 9 basis points to 4.42% yesterday and stayed in that seven-week low territory today; shorter-term yields fell less. If this becomes a trend it could potentially signal investors starting to price in slower U.S. economic gains. "Yields are moving lower on concerns about growth," said Cooper Howard, director, fixed income strategy at the Schwab Center for Financial Research. "The yield curve is reflecting the thought that inflation may rise and the economy may slow due to the potential for a trade war. There are a lot of unknowns at this point, so volatility is likely to remain high." Several Treasury auctions occur next week, which could provide fresh signals for yields. The Treasury Department announced this week that auction sizes would stay steady, which also may have contributed to the yield retreat. The high U.S. deficit and heavy debt issuance helped drive yields higher over the last year, but the Treasury's latest announcement and remarks by Treasury Secretary Scott Bessent—who said the administration will focus on bringing down the 10-year yield—calmed supply fears for the moment.
- Job report revisions ahead: Tomorrow brings annual "benchmark" revisions to jobs growth from the Bureau of Labor Statistics (BLS), covering the period from April 2023 through October 2024. "We should probably expect big revisions, as that's been the nature of the game over the last few years," said Alex Coffey, senior manager, trading and derivatives strategy at Schwab. Last August, the government subtracted 818,000 jobs from previously reported data, a move Fed policy makers referred to last summer as they voiced worries about slower-than-expected jobs growth. The Fed more recently said the jobs market has "cooled" but remains "solid." In other labor-related news, preliminary fourth quarter unit labor costs rose 3%, above the 2.6% Briefing.com consensus but below Bloomberg's consensus of 3.4%, while fourth quarter productivity rose 1.2%, better than the 0.8% expected. Treasury yields didn't immediately react.
On the move
- Qualcomm (QCOM) fell 4% despite earnings, revenue, and the chip company's outlook all beating analysts' consensus. Disappointment appeared linked to the company's intellectual property licensing revenue, which slightly missed expectations, causing worries that smartphone demand might be falling.
- Eli Lilly (LLY) added 1% in pre-market trading after quarterly earnings per share easily beat analysts' consensus view. Revenue came in as expected, and guidance met consensus as well. Overall revenue at the company grew 45% in the fourth quarter from a year earlier, driven by volume growth from diabetes and weight-loss drugs Mounjaro and Zepbound. Extracting those two products, revenue rose 20%. Lilly guided for revenue of $58 billion to $61 billion in 2025, the midpoint of which would be 32% growth, the same growth it posted in 2024.
- Arm Holdings (ARM) dropped 3.9% in pre-market trading despite reporting record revenue in its fiscal third quarter and receiving some price target increases from Wall Street analysts. The chip designer's outlook apparently disappointed some investors, though it met consensus expectations.
- Ford (F) shares fell 5.4% after earnings results late yesterday surpassed consensus. Investors seemed to focus instead on lighter-than-expected auto segment revenues and a profit outlook that didn't appear to impress Wall Street. The guidance "presumes headwinds related to market factors," Ford said in its earnings release, adding that it sees "lower wholesales and unfavorable mix."
- MicroStrategy (MSTR) shares fell sharply yesterday but swung back to nearly unchanged before today's open after the world's largest Bitcoin holder reported larger-than-expected quarterly losses. It also reported the biggest quarterly increase in Bitcoin holdings in company history, more than 200,000, during the fourth quarter to raise its total holdings to 471,107.
- Honeywell (HON) shares fell 3% in pre-market trading despite earnings and revenue beating Wall Street's estimates. Guidance looked disappointing. The company also announced plans to split into three publicly listed segments: Honeywell Automation, Honeywell Aerospace, and Advanced Materials.
More insights from Schwab
Trade gap: The U.S. trade deficit widened sharply in December, possibly as importers tried to get ahead of expected U.S. tariffs. The U.S. trade deficit with China shrank over the past five years, but the trade deficit with Canada and Mexico widened. Learn more about balance of trade and why it matters to investors in Schwab's latest analysis on tariffs.

Chart of the day

Data sources: Cboe. Chart source: thinkorswim® platform.
For illustrative purposes only. Past performance does not guarantee future results.
The 10-year Treasury note yield (TNX:CGI-candlesticks), seen here over the last nine months, closed below its 50-day moving average (blue line) yesterday for the first time since early December and is now down 8% from the 4.80% high it posted in January. Still, the yield is up sharply from September's low when rate cuts began and hasn't moved much from where it was last May before the Fed cut rates 100 basis points. The drop below the moving average could mean technical weakness for yields.
The week ahead
Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap this week.
February 7: January nonfarm payrolls, January unemployment, January average hourly earnings, University of Michigan preliminary January U.S. consumer sentiment.
February 10: Expected earnings from McDonald's (MCD).
February 11: Expected earnings from Lyft (LYFT), Coca Cola (KO), and Humana (HUM).
February 12: January Consumer Price Index (CPI) and expected earnings from CVS Health (CVS) and Cisco (CSCO).
February 13: January Producer Price Index (PPI) and expected earnings from Deere (DE), Applied Materials (AMAT), Coinbase (COIN), and Roku (ROKU).