General Market News

Moody's downgraded Indonesia's credit rating outlook from stable to negative on Thursday, citing reduced policy predictability and weakening governance under President Prabowo Subianto. This follows MSCI's transparency concerns that triggered over $80 billion in market selloffs, putting additional pressure on Indonesian markets including the rupiah, stocks, and government bonds.

• The rupiah remains near its record low of 16,985 per U.S. dollar, down nearly 1% year-to-date, while the Jakarta Composite Index has fallen 2.7% this week after declining 6.9% last week
• Moody's maintained Indonesia's Baa2 rating but warned that persistent governance issues could erode the country's policy credibility, with other ratings agencies potentially following suit within 12-18 months
• Foreign investors have sold approximately $860 million in Indonesian assets, and despite government assurances about solid economic fundamentals, markets continue experiencing outflows amid concerns about fiscal deficits and central bank independence

Vanguard's chief investment officer is encouraging some clients to consider allocating more than 50% of their portfolios to bonds, marking a potential shift from the traditional 60/40 stock-bond allocation. With 10-year Treasury yields at 4.2%, bonds are offering real yields above inflation for the first time in nearly a decade. Vanguard expects stock and bond returns to be comparable over the next decade due to elevated stock valuations and AI investment risks.

• The 10-year Treasury yield stands at 4.2%, providing a premium over current inflation and marking the first time in almost a decade that bonds are earning real yields above inflation
• U.S. stocks have been overvalued according to Vanguard's CIO, with the S&P 500 up about 90% since October 2022, but the firm predicts stock and bond returns will be 'pretty comparable' over the next decade
• Recent market action demonstrated bonds' appeal as stocks fell for three consecutive days (S&P 500 down 2.5%, Nasdaq down 4.5% since Monday) while bond prices surged Thursday

U.S. employers announced 108,435 job cuts in January 2026, the highest level for the month since 2009 and a 205% increase from December. The surge, driven by cuts in transportation, technology, and healthcare sectors, suggests employers are pessimistic about the 2026 economic outlook, with layoffs attributed to contract losses, market conditions, and restructuring.

• Transportation led with 31,243 cuts (mostly UPS eliminating 30,000 jobs due to reduced Amazon shipments), followed by technology with 22,291 cuts (primarily Amazon management restructuring)
• Healthcare announced 17,107 cuts, the sector's highest since April 2020, driven by inflation, high labor costs, and lower Medicaid/Medicare reimbursements
• Hiring plans dropped to 5,306 in January, the lowest since tracking began in 2009, down from 6,089 in January 2025 and 10,496 in December 2025

InvestorPlace analyst Louis Navellier argues that despite market uncertainty, several positive economic indicators suggest strong growth ahead, with U.S. GDP potentially reaching 6% annualized growth in 2026. He predicts an 'AI Dislocation' where market leadership shifts from mega-cap AI stocks to smaller companies building AI infrastructure and enabling technologies. Small-cap stocks surged 7% in January, significantly outpacing major indexes, signaling a potential rotation in market leadership.

• U.S. economy posted 4.4% GDP growth in Q3 2025 following 3.8% in Q2, marking the strongest back-to-back quarters since 2021, driven by 3.5% consumer spending growth
• The Russell 2000 small-cap index gained 7% in January, far outperforming the S&P 500's 1.4% and Dow's 1.6%, suggesting a leadership rotation toward domestic-focused smaller companies
• Navellier predicts an 'AI Dislocation' around February 25 where investors move beyond obvious mega-cap winners like NVIDIA and Microsoft toward smaller AI infrastructure and enablement companies

Reddit stock rose in after-hours trading following the company's fourth quarter earnings report that exceeded analyst expectations. The social media platform also announced a $1 billion stock buyback authorization and reported adjusted earnings of $1.24 per share.

• Reddit's Q4 earnings beat Wall Street expectations with adjusted earnings of $1.24 per share
• The company authorized a $1 billion stock repurchase program, signaling confidence in its financial position
• The positive earnings report comes after Reddit stock had slumped earlier in January on mixed feedback from advertising agencies

Mexican officials are in talks with the U.S. to find a way to send fuel to Cuba as humanitarian aid without triggering tariffs threatened by President Trump against countries supplying oil to the island. Cuba faces severe fuel shortages after Venezuelan shipments ceased and Mexico halted deliveries in mid-January under U.S. pressure. The situation has prompted U.N. warnings of a potential humanitarian collapse in Cuba.

• Cuba requires fuel imports for two-thirds of its energy needs and is experiencing acute shortages after Mexico, its largest supplier, halted shipments in mid-January due to Trump administration pressure
• High-level Mexican officials are holding talks 'almost every other day' with U.S. counterparts to determine if fuel can be sent as humanitarian aid, potentially including gasoline, food, and supplies within days if agreement is reached
• Mexico faces competing pressures: avoiding U.S. tariffs while maintaining ideological ties to Cuba, as President Sheinbaum warns that tariffs on oil suppliers could trigger a humanitarian crisis affecting Cuban hospitals and basic services

CNBC tested AI coding tools by building a clone of Monday.com's project management platform in under an hour using Claude Code, demonstrating the potential threat AI poses to certain software companies. The experiment highlights which software stocks may be most vulnerable to AI disruption, particularly those that 'sit on top of the work' rather than serving as core business systems.

• Non-developers created a working Monday.com clone with AI integration in under one hour for just $5-$15 in compute credits, suggesting easier-to-replicate software may face significant competitive pressure
• Most exposed companies include project management and workflow tools like Atlassian, Adobe, HubSpot, Zendesk, and Smartsheet that aren't core to business operations
• Systems of record like Salesforce and cybersecurity stocks like CrowdStrike and Palo Alto Networks are considered safer due to network effects and enterprise data anchoring that make them harder to replicate

Anthropic released Claude Opus 4.6, a new AI model with enhanced legal analysis capabilities and tools for knowledge workers in Excel and PowerPoint. The announcement triggered stock market declines in legal and professional services sectors, as investors fear AI displacement of white-collar jobs. Despite Anthropic being known by less than 5% of the US population, analysts warn this could signal a shift from AI exuberance to bubble concerns.

• The legal analysis plug-in for Claude chatbot caused immediate stock market reactions in professional services sectors, with analysts describing the market as being in 'seek and destroy mode' hunting for AI-vulnerable industries
• Claude Opus 4.6 outperformed previous models in 38 of 40 cybersecurity investigations according to Norway's Sovereign Investment, and can now handle complex tasks in enterprise applications like building presentation decks and working with large codebases
• Financial analysts suggest this could be the 'canary in the coal mine' for an AI bubble burst, following historical bubble patterns where winners narrow before market-wide collapse

Treasury Secretary Scott Bessent refused to rule out a potential DOJ investigation of Federal Reserve Chair nominee Kevin Warsh if he declines to cut interest rates as President Trump desires, stating such decisions are 'up to the president.' The exchange occurred during Senate Banking Committee testimony with Sen. Elizabeth Warren, amid ongoing concerns about Fed independence following an unprecedented DOJ investigation into current Fed Chair Jerome Powell.

• Bessent would not commit that Warsh would avoid investigation or lawsuit if interest rate decisions displease Trump, breaking with traditional White House deference to Fed independence
• Current Fed Chair Jerome Powell is already under DOJ investigation related to renovation cost overruns, widely viewed as retaliation for refusing to lower rates to Trump's preference
• Democrats and some Republicans have called for halting Warsh's nomination until investigations into Powell and Fed Governor Lisa Cook are ended, with critics characterizing the probes as attempts to strong-arm the independent central bank

Anthropic launched its upgraded Claude Opus 4.6 AI model on Thursday, offering improved coding and finance capabilities along with the ability to process 1 million tokens per prompt. The release comes amid a market selloff in traditional software stocks, with companies like Salesforce, Workday, and Thomson Reuters trading approximately 3% lower as investors fear AI disruption. Industry leaders and Anthropic itself argue that AI will complement rather than replace older software companies.

• Claude Opus 4.6 can handle 1 million tokens in a single prompt and features autonomous agents in the Claude Code programming tool to complete tasks faster
• Traditional software stocks including Salesforce, Workday, and Thomson Reuters each declined around 3% Thursday, extending a week-long selloff driven by AI advancement concerns
• Anthropic's head of product stated the company aims to 'partner and actually lower the floor to get more value' from existing software tools rather than replace them

U.S. employers announced 108,435 job cuts in January 2026, marking the highest level for the month since 2009 and representing a 205% increase from December. The surge was primarily driven by major layoffs at UPS (30,000 cuts) and Amazon (16,000 cuts), signaling employer pessimism about the economic outlook for 2026.

• Transportation sector led with 31,243 job cuts, mostly from UPS scaling back its Amazon shipping operations
• Technology firms announced 22,291 cuts, with Amazon reducing management layers amid restructuring rather than AI-driven eliminations
• Healthcare and health products manufacturers cut 17,107 jobs due to inflation, high labor costs, and lower Medicaid/Medicare reimbursements

Major U.S. stock indexes plunged on Thursday, with the S&P 500 hitting a two-week low and the Nasdaq dropping to its lowest level in over two months. The selloff was triggered by concerns over massive AI spending after Alphabet announced plans to double capital expenditure and Qualcomm issued a weak forecast, raising questions about when AI investments exceeding $500 billion will generate returns.

• The Dow fell nearly 400 points (0.8%), the S&P 500 dropped 0.9%, and the Nasdaq declined 230 points (1%), with tech mega-caps Microsoft and Tesla falling 3.4% and 3.7% respectively
• The S&P 500 software and services index dropped 3.2% for its seventh straight negative session, erasing roughly $830 billion in market value since January 28 as investors worry AI tools could erode demand for traditional software
• Market rotation accelerated out of expensive AI stocks into small-caps, value stocks, and mid-caps, with the CBOE volatility index rising to 20.49, its highest level in over two months

US job openings fell to 6.542 million in December 2025, the lowest level since September 2020, representing a decline of 386,000 positions. November data was also revised downward from 7.146 million to 6.928 million openings. The decline signals a softening labor market, though economists note the market remains in a 'low hire, low fire' mode rather than showing recessionary layoff patterns.

• Job openings dropped below economist forecasts of 7.20 million, while hiring increased modestly by 172,000 to 5.293 million positions in December
• Weekly jobless claims jumped 22,000 to 231,000 for the week ended January 31, the largest increase since early December, likely distorted by snowstorms and seasonal adjustment difficulties
• Despite the decline in openings, economists see no signs of recession-level layoffs, with claims remaining within the two-year range and the labor market characterized as stable

US markets opened sharply lower on February 5, 2026, led by a tech selloff after Alphabet announced plans to nearly double its capital expenditure to $175-185 billion in 2026, far exceeding analyst expectations. The Nasdaq fell 1.45% at open, continuing a five-day decline of 4.2%, while January job cuts surged to 108,400, well above the 43,000 expected.

• Alphabet shares dropped over 4% in early trading after revealing 2026 capex plans of $175-185 billion, nearly double the prior year's spending and significantly above consensus forecasts
• The Nasdaq Composite declined nearly 1,000 points or 4.2% over five days to around 22,500, with Strategy and Qualcomm leading losses at over 7% each
• January Challenger job cuts reached 108,400, up from 35,550 in December and nearly triple the 43,000 expected, adding to market concerns about economic conditions

U.S. tech stocks experienced significant declines on February 5, 2026, led by Alphabet's 4% drop after announcing major AI spending increases and Qualcomm's 11% plunge due to memory shortage forecasts. The S&P 500 broke below its 50-day moving average, turning bearish for the year, while the Nasdaq-100 showed relative weakness among major indices.

• Alphabet shares fell 4% premarket after announcing increased AI spending that spooked investors, while Qualcomm dropped 11% on disappointing guidance citing global memory shortages
• U.S. employers announced 108,435 layoffs in January, the highest since the financial crisis, adding pressure alongside rising weekly jobless claims
• The S&P 500 broke below its 50-day MA at 6,929.77 and turned negative for the year, with technical support targets at 6,813-6,814.50 and potential further decline to 6,583 if that level breaks

US stocks opened lower on Thursday as the Nasdaq fell 0.6% and the S&P 500 dropped 0.46%, extending a tech selloff driven by doubts over AI valuations and profitability timelines. The selloff reflects a 'crowded trade' unwind as investors rotate away from high-growth technology stocks into defensive sectors like utilities and consumer staples. Higher bond yields and Fed uncertainty are intensifying pressure on long-duration growth stocks.

• The Dow Jones fell roughly 240 points (0.4%) as investors cut exposure to semiconductor and software names where AI-driven optimism had pushed valuations to extremes
• A risk-off rotation is underway, with outflows from growth stocks moving into safer sectors like utilities, healthcare, and consumer staples that offer steadier earnings
• Elevated bond yields are making it harder to justify lofty tech valuations, as future profits are discounted more heavily when benchmark interest rates remain high

US stocks opened lower on Thursday as the Nasdaq fell 0.6% and the S&P 500 dropped 0.46%, extending a tech selloff driven by investor doubts about AI valuations and profitability timelines. The decline reflects a 'risk-off' rotation away from crowded tech and growth trades into defensive sectors like utilities and consumer staples. Higher bond yields and uncertain Fed policy are amplifying pressure on long-duration growth stocks.

• The selloff centers on 'crowded trades' where excessive investor concentration in AI and semiconductor stocks has created vulnerability as earnings guidance turns cautious and capital spending concerns mount
• Higher bond yields are making it harder to justify elevated tech valuations, as future earnings are discounted more heavily when benchmark interest rates remain elevated
• Market divergence shows this is a targeted reassessment rather than broad economic pessimism, with defensive sectors holding up better while investors demand proof of profitability from high-growth narratives

US initial jobless claims rose by 22,000 to 231,000 in the week ended January 31, exceeding expectations of 212,000 due to severe winter weather disruptions. Despite the spike, the labor market remains resilient with claims at levels indicating gradual cooling rather than sharp weakening. January layoff announcements reached 108,435, the highest since 2009, while corporate hiring plans dropped to their lowest January level on record.

• Continuing claims increased by 25,000 to 1.844 million, suggesting unemployed workers are taking longer to find jobs as labor demand eases
• January layoff announcements more than doubled year-over-year to 108,435 (highest since 2009), while hiring plans fell to just 5,306 (lowest January since tracking began in 2009)
• The Federal Reserve held rates steady at 3.50%-3.75%, with analysts expecting a cautious approach as policymakers balance slowing job growth against economic uncertainties and trade policy concerns