General Market News

Wall Street broker Clear Street slashed its U.S. IPO valuation target to $7.2 billion from an initial $11.8 billion, representing a 39% reduction. The New York-based company also reduced its share offering from 23.8 million to 13 million shares following investor pushback on the original valuation. The stock is expected to price on Thursday and list on Nasdaq under the symbol 'CLRS'.

• The valuation cut from $11.8 billion to $7.2 billion marks a significant 39% haircut, reportedly due to investor resistance to the initial pricing
• Clear Street reduced its share offering by 45%, from 23.8 million shares initially marketed to 13 million shares
• Goldman Sachs, BofA Securities, Morgan Stanley, UBS Investment Bank, and Clear Street itself are serving as lead book-running managers for the offering

While SpaceX IPO speculation generates excitement, tech companies are raising massive amounts of debt to fund AI infrastructure buildouts. UBS estimates tech and AI-related debt issuance could reach $990 billion in 2026, up from $710 billion in 2025, as major tech firms prioritize debt sales over equity offerings to finance their capital expenditure needs.

• Tech's four hyperscalers (Microsoft, Amazon, Google, Meta) are projected to spend close to $500 billion this year on AI-related capital expenditures and finance leases
• Oracle raised $25 billion and Alphabet sold over $30 billion in debt this year, with Alphabet's offerings priced at yields only narrowly higher than Treasury rates despite the risk
• Tech concentration in investment grade debt indexes is approaching 9% and could reach mid-to-high teens, raising concerns about market contagion if AI startups like OpenAI hit growth walls

Prediction markets like Polymarket and Kalshi saw $1.2bn in trading volume on Super Bowl Sunday, sparking debate over whether these platforms constitute gambling. Unlike traditional betting sites, they're regulated as financial derivatives and allow users as young as 18 to bet on everything from elections to foreign policy. Critics warn they carry similar risks to gambling while insider trading concerns and political influence remain largely unaddressed.

• Prediction markets are available in all US states to users 18+ and regulated as financial derivatives rather than gambling, avoiding restrictions that apply to conventional sports betting platforms
• Trump administration has taken a lenient stance on the industry, with Donald Trump Jr. serving as investor/adviser to Polymarket and paid adviser to Kalshi, while Trump Media plans to launch its own platform called Truth Predict
• Experts warn of gambling-related risks including financial harm and impulsive behavior, while insider trading concerns persist after suspicious bets timed around events like the Venezuela operation prompted calls for congressional regulation

U.S. stock markets retreated after January's unexpectedly strong jobs report showed 140,000 payroll additions (double the 70,000 forecast) and unemployment falling to 4.3%, dampening Federal Reserve rate cut expectations. Markets now price in only two rate cuts for the year, with the first not fully expected until July, as labor market stabilization allows the Fed to focus on inflation still well above target.

• January payroll gains of 140,000 nearly doubled the 70,000 forecast, while unemployment unexpectedly fell to 4.3% despite rising labor force participation and accelerating wage growth
• Rate futures now price only two cuts in 2026 with the first not fully expected until July, returning to expectations from when Fed Chair Powell previously indicated labor market stability
• Congressional Budget Office projects cumulative 10-year deficit $1.4 trillion (6%) higher than January 2025 estimates, with debt-to-GDP ratio forecast to exceed 1946 peak of 106% by 2030

President Trump's disruptive approach to global order is prompting 'middle powers' like Europe and Canada to pursue strategic autonomy through new trade deals and increased defense spending. Investors are responding by shifting toward non-U.S. equities, energy stocks, and currencies like the euro and Canadian dollar. Financial markets see emerging opportunities as these nations strengthen ties independent of American influence.

• European stocks are outperforming U.S. markets, with London's FTSE 100 up 5% in 2026 versus S&P 500's 1.4% rise, and over 73% of STOXX 600 companies beating Q4 earnings expectations
• Defense stocks have surged 200% since February 2022, while European energy stocks are near 2008 highs as nations focus on supply chain resilience and critical resource independence
• Major new trade agreements include EU deals with Mercosur and Indonesia, and a Canada-China pact, though analysts note U.S. trade remains difficult to replace and impact will take time

Chinese AI stocks rallied Thursday as several companies released upgraded models and policymakers called for broader AI adoption. Hong Kong-listed Zhipu AI surged 30% after launching its GLM-5 open-source model with enhanced coding capabilities. The rally reflects intensifying competition as Chinese developers race to match U.S. rivals with a flurry of new releases.

• Zhipu AI's GLM-5 model reportedly approaches Anthropic's Claude Opus 4.5 in coding benchmarks and surpasses Google's Gemini 3 Pro on some tests
• Multiple Chinese AI companies released upgrades this week, including DeepSeek's flagship model update, MiniMax's M2.5 model, and Ant Group's Ming-Flash-Omni 2.0 multimodal model
• Chinese Premier Li Qiang called Wednesday for AI implementation 'in diverse scenarios to unlock the potential of the technology', signaling government support for the sector

Chinese factories and ports are experiencing a surge in activity a year after Trump's tariffs, with container volumes at major ports up 40% year-over-year in early February 2026. The pre-Lunar New Year rush shows manufacturers operating near full capacity, particularly for U.S.-bound shipments, indicating that despite initial tariff concerns, Chinese exports to America remain robust.

• Major Chinese ports handled 40% more containers during the week ended Feb. 1 compared to a year earlier, marking the fastest growth in over 12 months and well above the 10% average weekly growth in 2025
• Large container shipments to the U.S. ran above 2024 and 2025 levels for most of January into February, with freight rates rising and some Ningbo port terminals operating beyond capacity with vessels overbooked by more than 20%
• Despite 'China-plus-one' diversification strategies, U.S. customers have resumed ordering and new product development after a year-long trade truce kept tariffs at lower levels, with factories like Agilian Technology maintaining pre-tariff export volumes to America

Major tech companies including Alphabet and Amazon have announced massive AI infrastructure spending plans of up to $185 billion and $200 billion respectively for 2026, causing stock selloffs despite strong earnings. The heavy capital expenditures on data centers and compute capacity, combined with rising memory chip costs and fears that AI agents may disrupt traditional SaaS business models, have created anxiety across tech sectors. With 59% of S&P 500 companies having reported Q4 2025 results showing 13% EPS growth, investors are now watching whether AI infrastructure spending benefits the broader ecosystem.

• Amazon stock fell 7% after missing Q4 EPS estimates by two cents and announcing $200 billion in 2026 capex, while Alphabet's stock softened despite record $400 billion annual revenue after forecasting up to $185 billion in 2026 spending
• Software sector experienced a selloff led by Salesforce and Adobe due to concerns that new AI agents like Anthropic's legal-tech tools could replace traditional SaaS subscription models rather than complement them
• Apple and Qualcomm warned about rising memory chip costs impacting margins, with Apple noting the impact will become 'a bit more significant' in coming months as AI infrastructure consumes high-end memory supply

Pakistan's new power pricing plan, requiring IMF approval, will end business subsidies for households, causing middle-class electricity bills to rise roughly 50% while reducing industrial rates by 13-15%. The shift is expected to add 1.1 percentage points to inflation over 12 months but aims to ease costs for export-focused industries and cut 102 billion rupees ($365 million) in subsidies.

• Households using 100-300 units monthly will face rate increases up to 76% due to new fixed charges, while lowest-income users (1-100 units) will see fixed charges jump from zero to PKR 400
• Industrial electricity prices will fall 13-15%, addressing complaints that high power costs erode Pakistan's export competitiveness in textiles and manufacturing
• The pricing overhaul follows Pakistan's 2023 inflation spike of nearly 40%, though inflation has since cooled to 5.8%; analysts warn new power prices could reverse this progress

The Pentagon is conducting a review to identify and penalize defense contractors with histories of delays and cost overruns, following a White House executive order that caps executive compensation at $5 million and bans stock buybacks. Defense stocks fell this week as the review continues, with companies facing potential contract cancellations if deemed 'underperformers.'

• Northrop Grumman fell over 4%, Boeing and L3 Harris dropped nearly 3% each, RTX declined 1%, and Huntington Ingalls eased 1% as the Pentagon extended its review deadline beyond the original Feb. 6 date
• Boeing's new Air Force One delivery is delayed by more than four years until 2028 and is $1.5 billion over budget, while Northrop Grumman faces possible penalties for delays in Ukraine armaments
• The Pentagon is specifically examining companies that directed cash to buybacks and dividends rather than factory investments, with penalties including potential contract cancellations for habitual delays

The U.S. economy added 130,000 jobs in January, beating expectations with unemployment at 4.3%, but annual revisions revealed nearly 900,000 fewer payroll jobs than previously reported for 2025. The strong headline masks growing concerns about AI-driven automation replacing knowledge workers, potentially disrupting the traditional labor-to-consumption economic feedback loop that drives growth.

• Total job growth in 2025 was revised down sharply from 584,000 to just 181,000, indicating last year's labor market was materially weaker than believed in real time
• January job cuts surged 118% year-over-year to 108,435 (highest since 2009), while announced hiring plans fell to 5,306, the lowest January total on record since tracking began in 2009
• AI agents now create 80% of databases and 97% of test environments on platforms like Databricks (versus near-zero two years ago), allowing companies to boost productivity without adding workers and threatening the traditional wage-consumption economic cycle

U.S. markets face a holiday-shortened trading week with Presidents' Day closure on Monday, followed by a packed schedule of delayed economic reports, Federal Reserve January meeting minutes, and key inflation data. The week features crucial PCE index readings, manufacturing and services PMI data, and earnings reports from major companies including Walmart, Palo Alto Networks, and Newmont. Investors will monitor delayed housing data from November and December alongside regular weekly economic indicators.

• FOMC will release January meeting minutes on Wednesday, Feb. 18, alongside delayed housing starts, building permits, durable goods orders, and retail/wholesale inventories
• Friday's calendar includes the critical PCE and core PCE index for December, GDP update, S&P flash manufacturing and services PMIs for February, plus delayed new home sales reports for November and December
• Major earnings reports scheduled from Walmart, Palo Alto Networks, Newmont, Kinross Gold, Carvana, DoorDash, Etsy, Live Nation, and Wayfair

Technical analyst Dr. Ter Schure predicts the NASDAQ 100 will peak around March 18, 2026, at approximately $26,600, based on mid-term election year seasonality patterns and Elliott Wave analysis. The index has traded sideways since October 2025, creating uncertainty, but historical mid-term election patterns suggest a rally from early February through mid-March followed by a multi-month decline through October.

• Mid-term election year seasonality shows the NASDAQ 100 typically bottoms in early February, rallies to a March 18 peak, then declines through October. The index bottomed February 6, 2026, aligning with this pattern.
• The target of $26,608 represents 161.8% of the 2020-2021 rally measured from the 2020 low. When third waves miss targets, B-waves of fourth waves often reach them, as seen in July 2011, November 2015, October 2018, and February 2020.
• The analyst expects a multi-month correction following the March peak, potentially dropping to 5,800 (+/- 300) before the next rally phase can begin toward 8,100+.

January 2025 U.S. job gains showed improvement over 2025's stagnant performance, with unemployment falling to 4.3%, but concerns remain about the labor market's underlying health. Every month in 2025 saw negative revisions, with the year averaging just 15,000 monthly job gains and the final six months showing a net loss of 1,000 jobs. Economists warn of a potential 'income-less expansion' as both job growth and wage gains remain under pressure.

• Nearly all January job gains came from health care-related sectors, raising concerns about employment opportunities for workers in other fields
• Average hourly earnings growth slowed to 3.71% annually (lowest since July 2024), threatening consumer spending which drives over two-thirds of U.S. economic activity
• The weak labor market creates policy tensions at the Federal Reserve, with some officials opposing rate cuts due to inflation concerns while others advocate for reductions given employment weakness

Investors are rapidly selling stocks across sectors due to fears of AI disruption, with financial services companies being the latest casualty following new AI tool announcements. The sell-off has hit software, financials, and legal services stocks, despite analysts suggesting many companies are being unfairly 'mispriced' due to overreaction. Morgan Stanley reports that 30% of tracked companies cited measurable AI impacts in Q4, up from 16% a year earlier, making disruption concerns more quantifiable.

• Financial sector stocks like Charles Schwab and LPL Financial dropped this week after Anthropic launched an AI model for financial analysis and Altruist introduced an AI tax planning tool; SPDR Software & Services ETF is down 19% year-to-date
• Analysts characterize the reaction as 'sell first, ask questions later,' with Morgan Stanley and Deutsche Bank identifying mispriced stocks including Microsoft, Intuit, Palo Alto Networks, and Spotify as potential opportunities
• Equity strategists warn that 'disruption-related volatility' will likely be recurring, though some believe meaningful AI disruption will play out over a much longer timeline than investors currently anticipate

The 10-year Treasury yield rose to 4.153% following January's jobs report, which showed 130,000 new jobs added, more than double the 55,000 consensus estimate. The stronger-than-expected employment data reduced market expectations for Federal Reserve interest rate cuts in 2025, with the 2-year yield surging over 4 basis points to 3.50%.

• January nonfarm payrolls of 130,000 vastly exceeded the 55,000 economist consensus and represented a significant improvement from December's 48,000 gain
• The unemployment rate fell to 4.3% from 4.4%, better than forecasts for no change, suggesting labor market stabilization
• The 2-year Treasury yield jumped more than 4 basis points to 3.50%, reflecting reduced expectations for Fed rate cuts this year

The Federal Reserve is reviewing all previously issued 'matters requiring attention' (MRAs) to banks as part of an overhaul of its supervisory approach under Vice Chair Michelle Bowman. The review aims to ensure examination directives focus on material financial risks rather than process-oriented issues, potentially downgrading some requirements to non-binding observations.

• MRAs that don't meet new standards for specificity and material financial risk could be downgraded to 'non-binding supervisory observations' instead of mandatory requirements
• The Fed plans to resolve clear-cut cases by end of March 2026 and complete reviews requiring further analysis by mid-July 2026
• The shift reflects Bowman's criticism that Fed examinations have become overly process-focused rather than concentrating on substantive financial risks to institutions

U.S. tariff collections surged 304% year-over-year to $124 billion through January 2026, helping reduce the federal budget deficit by 17-21%. The revenue increase follows President Trump's April 2025 tariffs on all imports and reciprocal duties on specific countries, but a pending Supreme Court decision could force the government to reimburse all duties collected if the tariffs are ruled unconstitutional.

• January tariff collections reached $30 billion, bringing fiscal year-to-date customs duties to $124 billion, up 304% from the same period in 2025
• The budget deficit fell to $95 billion in January (down 26% year-over-year) and $697 billion year-to-date (down 17-21% depending on calendar adjustments)
• The Supreme Court heard challenges to Trump's tariff authority in November 2025 but has not yet ruled, creating uncertainty as a negative decision could require the U.S. to reimburse all collected duties

The January jobs report exceeded expectations with strong headline numbers, but revealed underlying weaknesses. While payrolls beat forecasts and unemployment fell to 4.3%, annual revisions showed 898,000 fewer jobs were created in the April 2024-March 2025 period than initially reported. The strong headline numbers led traders to push back expectations for Federal Reserve rate cuts until at least June.

• Job gains were heavily concentrated in healthcare (82,000 jobs) and social assistance (42,000), with only construction (33,000) showing other notable growth, suggesting narrow employment strength
• Annual benchmark revisions revealed 898,000 fewer payroll additions than originally stated for April 2024-March 2025, and the economy lost a net 1,000 jobs in the final six months of 2025
• Futures markets now show only 8% probability of a Fed rate cut in March, with the next reduction not expected until June at earliest, as strong headline data suggests the central bank will remain on hold

Prediction markets experienced record growth during the Super Bowl, with platforms like Kalshi seeing downloads up 1,544% and daily active users reaching nearly 2 million. The sector now looks to capitalize on upcoming sports events including NBA All-Star Weekend, March Madness, the Winter Olympics, and the World Cup to sustain momentum and drive further trading volumes.

• Kalshi recorded over $100 million in trading on culture markets like 'What Bad Bunny was going to perform' during Super Bowl week, demonstrating diverse betting interest beyond traditional sports outcomes
• Robinhood reported 300% growth in event contract revenue, with 12 billion contracts traded in 2025 and 4 billion already in 2026, making it the company's fastest-growing business
• Traditional sportsbook leaders FanDuel (4.2 million users) and DraftKings (5 million users) still dominate but see prediction markets as complementary, particularly in states without legalized sports wagering