Volatility Lingers as Traders Weigh the Next Move 12/02/2026

HOT stories for today

Market wrap:

• US stocks closed modestly lower Wednesday, with the Dow Jones Industrial Average snapping a three-day winning streak after a stronger-than-expected January jobs report failed to keep an early rally alive. The 30-stock Dow slipped more than 66 points, or 0.1%, while the Nasdaq Composite dipped about 0.2%. The S&P 500 finished essentially flat, ending just a hair lower. Markets initially pushed higher after the nonfarm payrolls report showed job gains of 130,000 in January, well ahead of forecasts and stronger than the downwardly revised December figure.
• The unemployment rate edged down to 4.3% from 4.4%. Still, the bid faded as the session wore on, leaving stocks to end in the red despite the “better news” on the labor front. In crypto, Bitcoin remained under pressure, sliding back through $70,000 and hovering near 52-week lows, conditions traders are increasingly framing as cold enough to qualify as a “crypto winter.” In corporate credit, Alphabet drew strong demand in Europe, with its long-dated AI-themed bond sale said to be well received Monday, pulling in roughly $32 billion equivalent across sterling and Swiss-franc tranches. On deck: fresh reads on the economy arrive Thursday, including weekly jobless claims and the existing-home sales report. Earnings continue as well, with Restaurant Brands International among the companies scheduled to report before the open.

Tariff windfall trims US deficit as Supreme Court ruling looms

• Tariff collections jumped in January, generating about $30 billion in customs duties and lifting the fiscal year-to-date total to $124 billion, up 304% from the same period a year earlier, as the levies provided a meaningful boost to federal revenue. The Treasury Department reported a January budget deficit of roughly $95 billion, about 26% smaller than a year ago. Through the first four months of the fiscal year, the shortfall narrowed to $697 billion, down 17% on an unadjusted basis, or 21% after calendar adjustments. 
• The numbers underscore how pivotal President Donald Trump’s tariff regime has become to the government’s cash flow — and the risk posed by a pending Supreme Court ruling on the authority used to impose the duties. The court heard arguments in November and has yet to issue a decision, fueling concern that an adverse outcome could force reimbursements of previously collected tariffs. Even with the revenue tailwind, debt servicing remains a heavy drag. Net interest payments totaled $76 billion in January, and gross interest reached $426.5 billion year to date, reflecting the growing cost of carrying $38.6 trillion in US debt.

Stocks on the move:

• Cisco Systems (CSCO): The networking hardware maker fell about 7% after reporting non-GAAP gross margin of 67.5%, slightly below the 68.1% estimate, according to LSEG. Its current-quarter guidance also came in softer than Wall Street expected, even as fiscal second-quarter results beat forecasts on both revenue and earnings. Shares are up about 11% year to date.
• McDonald’s (MCD): The fast-food giant slipped less than 1% after posting fourth-quarter adjusted earnings of $3.12 a share on $7.01 billion in revenue, topping estimates of $3.05 a share and $6.84 billion, according to LSEG.
• AppLovin (APP): The mobile technology company dropped more than 4% despite beating expectations, reporting fourth-quarter earnings of $3.24 a share on revenue of $1.66 billion. Analysts had been looking for $2.93 a share and $1.60 billion, per LSEG. The stock is down about 32% this year.
• Fastly (FSLY): The cloud-computing name jumped more than 28% after issuing full-year revenue guidance of $700 million to $720 million, well ahead of the $668 million consensus, according to LSEG. Fastly also topped quarterly estimates, with adjusted earnings of 12 cents a share on $172.6 million of revenue versus expectations for 6 cents and $161 million.

Watchlist: HOOD, COIN, MCD, FSLY, APP, CSCO, MSFT, MU

Key Economic Events Today:

EST time

08:30 am: USD Unemployment Claims
10:00 am: USD Existing Home Sales
07:00 pm: USD FOMC Member Logan Speaks


Earnings

BMO (Before Market Open): Anheuser-Busch (BUD), Brookfield Corp. (BN), Howmet Aerospace (HWM)

AMC (After Market Close): Applied Materials (AMAT), Arista Networks (ANET), Aibnb (ABNB)


The TEFS Analyst team wishes you a successful day!