A tale of two toy companies could send a warning sign for the broader U.S. economy. Hasbro and Mattel earnings diverged sharply, reflecting a broader division between American consumers.

If you look at Hasbro's earnings, everything seems like child's play. The toy maker said this week that shoppers were willing to swallow higher prices, meaning it could pass on an effective 24% tariff cost to consumers. A particular bright spot was Hasbro's Wizards of the Coast brand, with adults willing to spend on its "Magic: The Gathering" collectible card game.

It was a very different story for Mattel. The maker of Barbie dolls and Hot Wheels cars raised prices last summer in response to tariffs but now looks to be paying the price with cost-sensitive customers, as it was forced to offer discounts over the holiday period.

The split between the two companies points to a so-called K-shaped economy -- named that way because the upper arm rises while the lower arm droops. Higher-income households are fine as their wealth builds with a buoyant stock market, while lower-income consumers struggle.

There is a danger of reading too much into one quarter's worth of earnings from two companies -- Mattel is suffering from some specific issues such as a slow move into digital content. But unexpectedly weak retail sales in December and rising consumer debt and delinquency rates also suggest lower-income households are feeling the pinch.

The growing divide creates a dilemma for the Federal Reserve, which has to set interest rates for the economy overall. Weak data suggest a case for rate cuts, but wealthier consumers drive the majority of spending and apparently aren't feeling constrained -- meaning lower borrowing costs could overheat the economy.

The central bank will analyze this week's jobs data and inflation report to assess the case for resuming rate cuts. But this might be a toy story that doesn't have a happy ending for everyone.

-- Adam Clark

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Ford's New Tariff Hit Caps Off Weak Fourth Quarter

Ford Motor reported weaker-than-expected fourth-quarter earnings late Tuesday, including an unexpected move by the Trump administration that nearly doubled its hit from tariffs on imported auto components, to $900 million. But Ford's 2026 outlook was solid.

   -- Administration officials told Ford in December that a tariff-relief 
      program it announced in October would be retroactive only back to 
      November, not back to May as expected. The auto maker posted an $11.1 
      billion quarterly loss, compared with a $1.8 billion profit a year 
      earlier. 
 
   -- Ford had lobbied for the tariff-relief program that enabled auto makers 
      to apply for credits to offset tariffs on imported parts of U.S.-made 
      vehicles. Ford was forced to import heavily tariffed aluminum for its 
      F-series trucks last year after fires sidelined a key aluminum factory in 
      New York. 
 
   -- Quarterly adjusted earnings of 13 cents a share were below Wall Street 
      expectations. Revenue of $45.9 billion fell 5% from the year-ago quarter, 
      but beat projections. CEO Jim Farley reported "significant progress" in 
      lowering material and warranty costs and on improving quality. 
 
   -- Ford said in December that it expected to take a $19.5 billion charge to 
      retrench as electric-vehicle demand fell. For full-year 2025, Ford 
      reported an $8.2 billion net loss, down from a $5.9 billion profit in 
      2024. Revenue rose 1% to a higher-than-expected $187.3 billion. 

What's Next: Ford expects 2026 operating profit of between $8 billion and $10 billion, basically in line with Wall Street expectations at the midpoint. RBC analyst Tom Narayan expects a $1 billion improvement from 2025 as it recovers from the fires, along with organic improvement across Ford's divisions.

-- Al Root and Janet H. Cho

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Robinhood Clouded by Crypto Turmoil Despite Revenue Beat

Despite gaining traction with its prediction markets offering, mobile brokerage app operator Robinhood Markets posted lower fourth-quarter profit, and revenue fell short of expectations. Weakness in cryptocurrencies weighed on the quarter following last year's sharp drop in digital asset values.

   -- Crypto trading revenue fell 38%, offsetting the 27% gain in overall 
      revenue. Earnings of 66 cents a share were better than expected. In its 
      prediction markets business, sports was the most popular theme, and 
      customers traded a record 8.5 billion event contracts during the quarter. 
 
   -- Robinhood customers have also been embracing risk and trading on margin, 
      meaning they are borrowing money from their brokerage to buy stocks. The 
      company said its margin book increased 113% from a year ago to a record 
      $16.8 billion. Trading volumes for equities and option contracts reached 
      records for the quarter. 
 
   -- A bull market has enticed investors to put more money in brokerage 
      accounts. Robinhood's total platform assets jumped 68% from the year 
      earlier, to $324 billion for the fourth quarter. And net deposits came in 
      at $15.9 billion for the quarter. 
 
   -- Transaction-based revenue rose 15% in the fourth quarter, while net 
      interest revenue rose 39%, mainly driven by interest-earning asset growth 
      and securities lending activities. Robinhood Gold subscription revenue 
      rose 56% in the quarter to around $50 million. 

What's Next: Operating expenses for 2026 are expected to rise 18%, Robinhood said, mostly to invest in new or recently introduced products such as its banking and prediction markets, and as it spreads to new markets.

-- Andrew Welsch and Liz Moyer

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Crude Rises Amid Threat of U.S. Seizing Iran Oil Tankers

Energy prices were in focus again Wednesday amid geopolitical tensions. Oil benchmarks were rising after The Wall Street Journal reported the Trump administration has discussed seizing additional tankers involved in transporting illicit Iranian oil.

   -- As part of a continuing blockade on Venezuela, the U.S. has already 
      seized several 'shadow tankers' carrying Iranian oil to buyers such as 
      China. Enhanced efforts to stop more sanctioned vessels from loading 
      Iranian oil would further squeeze Tehran's main revenue source. 
 
   -- The White House has discussed seizing additional tankers transporting 
      Iranian oil but have held off due to concerns about a retaliation by 
      Tehran and the potential disruption to crude markets, The Wall Street 
      Journal reported, citing U.S. officials. 
 
   -- The latest move follows recent talks between American and Iranian 
      officials over Tehran's nuclear program. Iran's Foreign Minister Abbas 
      Araghchi said on Friday that talks were a "very good start," the 
      country's IRNA news agency reported. 
 
   -- While both sides reported some progress in the negotiations, the 
      discussions were overshadowed by a U.S. advisory Monday warning ships 
      from transiting the Strait of Hormuz -- a key chokepoint for global oil 
      supplies. 

What's Next: Investors look set to switch their focus to OPEC's monthly market outlook, out Wednesday, to assess the cartel's supplies. Also on Wednesday, President Donald Trump is set to meet with Israel's Prime Minister Benjamin Netanyahu at the White House to discuss Middle East issues, which could also have a bearing on crude prices.

-- Alex Kozul-Wright

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Paramount's Sweetened Warner Bros. Offer May Fall Short

Paramount Skydance's sweetened offer for Warner Bros. Discovery seems unlikely to shift the takeover battle in its favor away from Netflix, mostly because it doesn't raise the purchase price. Warner shareholders have repeatedly signaled that they want more than $30 a share to break the existing agreement with Netflix.

   -- Paramount's new $30 a share offer includes an extra fee payable to Warner 
      shareholders for each quarter its transaction hasn't closed beyond the 
      end of this year. It amounts to about $650 million in cash each quarter. 
      Paramount is also offering to cover the $2.8 billion Netflix termination 
      fee. 
 
   -- Warner Bros said its board will carefully review the offer. Netflix's 
      $27.75 a share offer is for the movie and TV studios and HBO Max 
      streaming platform, with the cable channels spun out separately. 
      Paramount's offer is for the whole company, and it says the cable 
      channels would have no equity value. 
 
   -- Broadcast media ownership rules were debated at a Senate hearing on 
      Tuesday as Nexstar Media Group pushes for its $6.2 billion acquisition of 
      Tenga, a deal that would smash the current 39% national cap on ownership, 
      putting Nexstar's broadcast reach closer to 80% of American households. 
 
   -- The Federal Communications Commission is considering changing its rules 
      to raise the cap after FCC Chair Brendan Carr called the existing rules 
      anticompetitive. Nexstar competitor Newsmax CEO Chris Ruddy told senators 
      they are directly affected by media consolidation. "We need more 
      competition, not less." 

What's Next: Media watchdogs say Congress needs to change the ownership rules because it set them. But National Association of Broadcasters CEO Curtis LeGeyt backs reform, saying local broadcasters risk being drowned out by big tech platforms like Netflix, TikTok, and Google's YouTube. The restrictions distort the advertising marketplace, he said.

-- Angela Palumbo, George Glover, and Liz Moyer

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December Spending Unexpectedly Flat as Debts Pile Up

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February 11, 2026 06:55 ET (11:55 GMT)

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