Key Takeaways
- US private sector job growth significantly underperformed in January, with ADP reporting a mere 22,000 new jobs, well below the 45,000 estimate and December's 41,000.
- The US yield curve has steepened to its most pronounced level in four years, with the 2- and 10-year Treasury yield gap widening to approximately 69 basis points, driven by concerns over mounting debt and anticipated policy shifts.
- AbbVie (ABBV) delivered robust Q4 2025 earnings, surpassing revenue and adjusted EPS estimates and providing an optimistic outlook for 2026 adjusted EPS.
- China has issued strong warnings to the European Union, vowing "necessary actions" to protect its companies amidst an EU subsidy probe, accusing Brussels of undermining investment confidence.
- AT&T (T) is expanding its high-capacity fiber network to connect Amazon Web Services (AWS) data centers, enhancing critical infrastructure for cloud and AI services.
Economic Data Signals Slowdown Amidst Steepening Yields
The latest economic data from the United States paints a picture of decelerating private sector job growth. The ADP National Employment Report for January revealed a modest increase of just 22,000 jobs, a significant miss compared to economists' expectations of 45,000 and a sharp decline from December's revised figure of 41,000. This indicates a weaker-than-anticipated start to the year for the labor market. While education and health services saw notable gains, sectors like manufacturing and professional and business services experienced a slowdown.
Concurrently, the US yield curve has reached its steepest point in four years, with the spread between 2-year and 10-year Treasury yields widening to around 69 basis points. This steepening reflects growing investor apprehension regarding rising national debt, potential inflationary pressures, and shifts in monetary policy, particularly ahead of upcoming Treasury bond auctions. The 10-year Treasury note yield rose to 4.28% on February 4, 2026.
Corporate Highlights: AbbVie Shines, AT&T Expands
In corporate news, pharmaceutical giant AbbVie (ABBV) reported strong financial results for the fourth quarter of 2025, exceeding analyst expectations. The company announced net revenue of $16.62 billion, outperforming the estimated $16.42 billion, and adjusted earnings per share (EPS) of $2.71, higher than the $2.65 consensus. Looking ahead, AbbVie also provided an optimistic adjusted EPS guidance for 2026, projecting $14.37 to $14.57, which is above the analyst estimate of $14.22. Strong performance in its immunology and neuroscience portfolios was cited as a key driver, successfully offsetting the anticipated decline in Humira sales due to biosimilar competition.
Telecommunications leader AT&T (T) announced plans to bolster its high-capacity fiber network by connecting Amazon Web Services (AWS) data centers. This strategic move is part of AT&T's broader initiative to expand its fiber footprint, targeting 40 million customer locations across the United States by the end of 2026. The expansion is crucial for supporting the increasing demand for cloud services and high-bandwidth AI workloads.
China-EU Tensions Escalate Over Trade Practices
Geopolitical tensions are escalating between China and the European Union as China issued a series of strong rebukes against the EU's trade practices. Beijing has vowed to adopt "necessary actions" to safeguard the interests of its companies in response to an ongoing EU subsidy probe. China urged the EU to "correct its mistake" regarding the investigation, which it views as protectionist.
Chinese officials have also accused the EU of hurting the investment confidence of Chinese companies operating within the bloc. These statements come as the EU considers measures to phase out "high-risk" foreign telecom suppliers and has launched anti-subsidy investigations into various Chinese industries, which China's Ministry of Commerce has called "egregious" and discriminatory.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.