Wall Street set for muted open after tech rebound; economic data awaited

By Twesha Dikshit and Purvi Agarwal

Feb 10 (Reuters) - U.S. stock indexes were on track to open flat on Tuesday after a sharp rally in the previous session as tech stocks bounced off a bruising rout, while investors parsed retail sales figures that kicked off a series of crucial economic data releases this week.

U.S. retail sales were unexpectedly unchanged in December, putting consumer spending and the overall economy ?on a slower growth path heading into the new year. Economists polled by Reuters had expected a 0.4% increase.

"It's really the retail sales data that's come out ?below expectations (and) that's driving some of the weakness, indicating that maybe the economy wasn't as strong as people ?expected going through the fourth quarter," said Charlie Ripley, vice president of portfolio management at ?Allianz Investment Management.

The Dow notched ?its second consecutive closing record high on Monday, while the S&P 500 closed a few points shy of its January peak.

Despite being knocked back by ?last week's tech selloff, the Nasdaq was about 3% from ?its all-time high, with diversification away from pricey tech shares helping undervalued pockets of the market, including small- and mid-cap companies.

At 08:43 a.m., Dow E-minis were down 17 points, or 0.03%, S&P 500 ?E-minis lost 3 points, or 0.04%, and Nasdaq 100 ?E-minis dropped 7.75 ?points, or 0.03%

This week, focus will be on the delayed nonfarm payrolls data, followed by crucial inflation numbers that could influence expectations for the U.S. Federal Reserve's monetary policy trajectory.

White House economic adviser Kevin Hassett ?said on Monday that U.S. job gains could be lower in the coming months due to slower labor force growth and higher productivity.

"Hassett's comments were aimed at resetting expectations for what 'normal' job growth looks like as population growth slows and productivity improves," said Miles Sampson, vice president and head of asset allocation research at Franklin Templeton Investment Solutions.

Markets currently expect the central bank to keep rates on hold until June, when President Donald Trump's Fed chair nominee, Kevin ?Warsh, could take ?charge, pending confirmation from the U.S. Senate.

Federal Reserve policymakers Beth Hammack and Lorie Logan are slated to speak later in the day.

Meanwhile, corporate earnings continued to draw investor attention.

Spotify's shares soared 11.6% in premarket ?trading after the audio-streaming platform forecast first-quarter earnings above expectations, benefiting from strong user growth and price hikes.

Coca-Cola's shares fell 3.7% after the company missed Wall Street expectations for fourth-quarter revenue.

Shares of S&P Global plunged 17.2% after forecasting 2026 profit below analysts' estimates.

Onsemi's shares dropped 3.2% before the bell, after the chipmaker missed estimates for fourth-quarter revenue.

The AI trade has come under renewed scrutiny, with ballooning capital expenditure projections and concerns over measurable returns weighing on investor sentiment. The next test will be chip giant Nvidia's (NVDA) results later ?this month.

UBS downgraded the S&P 500 information technology sector to "neutral" from "attractive".

Software shares have faced the brunt of shifting investor expectations after a severe drubbing last week fueled by fears of competition from AI tools.

Despite clawing back some losses in the previous two sessions, the S&P 500's software index has ?lost 16% so far this year.

(Reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru; Editing by Saumyadeb Chakrabarty and Pooja Desai)