By Alex Eule

Cold Snap. A cooler-than-expected inflation report left stocks flat on the day, but pushed Treasury yields lower as investors priced in the possibility of more rate cuts in the months to come.

The 2-year and 10-year Treasury bonds were each down roughly five basis points on the day, or 0.05 percentage points. Over the last two days the two- and 10-year yields have dropped 10 and 12 basis points, respectively. That's their largest two-day declines since October.

Stock investors were less moved. Though the major indexes were all substantially higher in midday trading, they closed essentially flat. The Dow Jones Industrial Average was up 49 points, or 0.1%. The S&P 500 was barely changed. And the Nasdaq Composite shed 0.2%. All three indexes saw weekly declines of more than 1%, with the tech-heavy Nasdaq falling the most, down 2.1% on the week.

The day kicked off with a surprise pullback in inflation. The consumer price index for January showed a year-over-year gain of 2.4%, below a 2.5% estimate and down from December's 2.7% rate. Perhaps most notably, "everyday expenses such as food, gasoline and housing also showed signs of cooling," my colleague Megan Leonhardt notes.

Fed policymakers may be the happiest group. Megan writes:

Even Fed officials may be pleased with the January CPI print. "With a headline CPI print like this, the door to another Fed rate cut in the near term opens wider," writes Olu Sonola, head of U.S. economic research at Fitch Ratings. "Tariff-induced increases are visible in the details and will raise some eyebrows, but if overall goods inflation continues at this pace, it's a green light for the Fed in the months ahead."

That green light means traders now expect an extra quarter-point of cuts by the end of the year, with more than a 50% change of the fed-funds rate ending the year at 2.75% to 3%, down from a current 3.5% to 3.75%

Review & Preview will be off on Monday, with markets closed for Presidents Day. We'll see you Tuesday evening.

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This Weekend's Magazine

The Calendar

Markets are closed Monday for Presidents Day. When trading resumes, investors will get a fair number of economic data releases, highlighted by the personal consumption expenditures price index on Friday from the Bureau of Economic Analysis. On Wednesday the Census Bureau releases the durable goods report and the Federal Open Market Committee releases the minutes of its last monetary-policy meeting.

Roughly 50 S&P 500 index companies are set to report next week. So far with 369 having reported, 77% have beaten earnings-per-shares estimate, while 73% have surpassed revenue expectations.

Cadence Design Systems and Palo Alto Networks report quarterly results on Tuesday followed by Analog Devices and Booking Holdings on Wednesday. Deere and Walmart release their earnings on Thursday.

-- Dan Lam

What We're Reading Today

   -- Buy This Stock to Own a Piece of Ferrari. It's a Low-Risk Bet for Value 
      Seekers. 
 
   -- Looking for Dividends? Consider Europe. 
 
   -- Sphere Arena's Success Is Sweet for Combative CEO James Dolan 
 
   -- Move Over, Arizona and Florida. These States May Be the Best Places to 
      Retire for Your Health. 
 
   -- And this weekend's cover story: America's Cattle Crisis: a Shrinking Herd, 
      Soaring Beef Prices, and Little Relief in Sight 

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February 13, 2026 19:55 ET (00:55 GMT)

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