TRADING DAY-US data dims

By Jamie McGeever

ORLANDO, Florida, Feb 10 (Reuters) - The Dow Jones Industrials index crept up to a new high on Tuesday but other U.S. indices fell and Treasury yields slid, after unexpectedly soft U.S. retail sales figures raised doubts about the strength of the consumer and the broader economy.

In my column today, I look at the peculiar juncture the world economy is at right now - growth seems solid, ?markets are buoyant, an AI capex boom is underway, and there's no pandemic or financial ?crisis to fix. Yet governments are spending like crazy. It's a challenging environment for bond investors.

If you have more time to read, here are a few articles I recommend to help ?you make sense of what happened in markets today.

1. U.S. retail sales unexpectedly flat in December

2. White House sets lower job growth expectations; Fed grapples with ?same issue

3. Roaring global growth train emerging from 2026 fog: Mike Dolan

4. Hedging has changed. Portfolios need a new playbook: Taosha Wang

5. AI ?job angst is everywhere but ?the corner office

Today's Key Market Moves

* STOCKS: Dow hits new high but Nasdaq falls, Japan soars again - Nikkei +2.3% to new record, lifting Asia. Europe ends near all-time peak, UK slips.

* SECTORS/SHARES: U.S. utilities +1.6%, materials +1.3%; tech -0.6%, ?financials -0.8%. Disney +2.6%, Home Depot +2.3%, Walmart -1.8%, Coca-Cola -1.5%.

* FX: Yen rallies 1%, dollar weakens broadly. Chinese ?yuan extends gains to new three-year high. Bitcoin -2% below $69,000.

* BONDS: U.S. yields tumble as much as 7 bps on soft retail sales, 30-year yield's biggest fall since October, curve flattens. Long-dated JGB yields lowest in a month.

* COMMODITIES/METALS: Oil dips slightly, ?gold slips. Silver -3%.

Today's Talking Points

* Rotation, rotation, rotation

Whether it's across national boundaries, ?between industries, or intra-sector, ?the pace and scope of equity investors' rotation is increasing. The Dow is hitting new highs, the small-caps Russell 2000 isn't far behind, while tech-heavy Nasdaq is lagging.

It's part of the wider trend setting the tone for 2026, of active management taking ?the place of passive index-buying, investors being forced to pick winners and losers, and hedging and diversification taking on added significance.

* U.S. ?JANUARY JOBS, ANNUAL REVISION

January's U.S. employment report on Wednesday is expected to show payrolls rose by 70,000, up from 50,000 in December, while the unemployment rate held steady at 4.4%. More importantly, perhaps, revisions for the year through last March could show the economy created hundreds of thousands fewer jobs than first thought.

A degree of expectation management is coming from the White House, with officials noting that low hiring doesn't necessarily signal a weak jobs ?market because labor ?supply is also shrinking. Fed Chair Jerome Powell said in December the labor market seemed surprisingly resilient. ?We shall see.

* China's FX juggernaut

China's yuan is going from strength to strength, breaking through 7.00 per dollar late last year and now printing ?new three-year highs against the greenback on an almost daily basis. A test of 6.90 per dollar is imminent.

Beijing's preference for a stable yuan seems to have given way to favoring a stronger currency. This will no doubt please Washington, and Treasury Secretary Scott Bessent on Monday said that U.S.-China relations are in "a very comfortable place." The same probably goes for traders short dollars and long Asian FX right now too.

What could move markets tomorrow?

* China producer, consumer inflation (January)

* ECB Board Member Isabel Schnabel speaks

* Bank of Canada minutes of January 28 policy meeting

* U.S. employment report (January)

* U.S. federal budget (January)

* U.S. Treasury auctions $42 billion of ?10-year notes

* U.S. earnings including Cisco Systems, McDonald's, T-Mobile, Shopify

* U.S. Federal Reserve officials scheduled to speak include Kansas City Fed President Jeffrey Schmid, Cleveland Fed President Beth Hammack, and Vice Chair for Supervision Michelle Bowman

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Opinions expressed are those of the author. They do not reflect ?the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and ?freedom from bias.

(By Jamie McGeever; Editing by Nia Williams)