General Market News

Global private equity exits rose 5.4% to 3,149 deals in 2025, but total deal value fell 21.2% to $412.1 billion, reflecting an industry under pressure to monetize aging assets at lower valuations. The trend stems from firms finally recalibrating expectations after years of holding out for higher prices, creating a backlog that has constrained returns to investors and dampened fundraising.

• PE fundraising declined 11% in 2025 to $490.81 billion, marking the second consecutive annual slowdown as limited partners receive lower cash distributions
• The pricing gap originated in 2022 when the S&P 500 fell 19% amid rising rates, but many PE firms avoided marking down portfolio company values
• Blackstone reported $33.9 billion in realizations for 2025, with Q4 generating $10.8 billion—the highest quarterly total of the year—and successfully executed the largest-ever U.S. PE-backed IPO with Medline, which raised over $4 billion and surged 30% post-debut

US stock markets showed mixed performance on February 3, 2026, with the Dow Jones rising 0.12% while the S&P 500 and Nasdaq fell 0.36% and 0.87% respectively due to technology sector weakness. The tech selloff was led by declines in Nvidia and Microsoft, both down over 2%, as investors awaited key earnings reports from Alphabet and Amazon while remaining cautious about AI investment returns.

• Technology sector dropped 2.37%, offsetting gains in Materials (up 2.96%) and Energy (up 1.78%), with seven of eleven sectors posting positive returns
• Merck rose over 3% and Pepsi gained 4% on strong earnings, while Palantir jumped 6% on upbeat guidance, helping lift the Dow
• March E-mini S&P 500 futures struggled below the record high of 7043.00, with technical support at the 50-day moving average of 6920.78 becoming critical as markets face uncertainty over AI profitability and upcoming tech earnings

Federal Reserve Governor Stephen Miran is calling for aggressive interest rate cuts of more than 100 basis points in 2025, maintaining his dissenting position after voting against the Fed's decision to hold rates steady at 3.5-3.75% in January. Miran argues current rates are too high due to measurement quirks in inflation calculations rather than actual price pressures, putting him at odds with other Fed officials who favor a more cautious approach.

• Miran dissented alongside Governor Christopher Waller at the January 28 FOMC meeting, voting for a quarter-point cut while the committee voted 10-2 to hold rates unchanged after three consecutive cuts in late 2024
• He advocates for 'a little bit more than a point' (over 100 basis points) of cuts this year, significantly more aggressive than market expectations of two 25 basis point cuts
• Miran's Fed term expired January 31, though he may remain until a successor is confirmed, with Kevin Warsh nominated as Fed chair and potentially filling Miran's vacancy

Schaeffers Research has identified 25 stocks to buy for February 2026 based on 10 years of historical data, with software company Fortinet (FTNT) topping the list. The analysis comes as investors digest January's geopolitical tensions, inflation data, and earnings reports, with all three major indexes posting modest gains for the month despite weekly volatility.

• Fortinet (FTNT) has finished February higher in 9 of the past 10 years with an average return of 8.5%, which would bring shares from $81.02 to $87.90 if repeated
• FTNT's put/call open interest ratio of 1.19 sits in the 91st percentile, indicating heavy bearish sentiment that could unwind and boost the stock
• The Dow Jones logged its ninth straight January gain and longest January winning streak since 2018, despite finishing Friday with a third consecutive weekly loss

The U.S. dollar is experiencing extreme volatility in early 2026 due to unpredictable White House policies and concerns over Federal Reserve independence, triggering 'Sell America' trades. After falling nearly 2% to four-year lows in January, the dollar's sudden rebound caused chaos across metals, currency, and equity markets. Analysts warn the dollar has detached from traditional economic metrics, posing risks to the nearly $70 trillion in U.S. assets held by foreign investors.

• Gold suffered its biggest daily drop since the early 1980s, falling 5% on Monday after the dollar rebounded following Trump's nomination of a new Fed chair to replace Jerome Powell, disrupting popular currency debasement trades.
• Currency volatility has spiked dramatically, with the euro/dollar three-month volatility gauge hitting its highest level since July, while Barclays identifies a new 'U.S. policy risk premium' detaching the dollar from traditional valuation metrics.
• Foreign investors hold nearly $70 trillion in U.S. assets, but Bank of America warns a 'disorderly' dollar decline of 5% monthly could trigger drastic Treasury sell-offs, with portfolio managers now hedging aggressively and reducing North American exposure.

Bank of America has raised its S&P 500 price target, projecting a 12% gain over the next 12 months to approximately 7,815 from the current level of 6,974. The bullish outlook is based on the bank's Sell Side Indicator, which tracks Wall Street strategists' equity allocations and currently signals further upside despite already strong market sentiment.

• The Sell Side Indicator reached its most optimistic level since March 2025, but remains below thresholds historically associated with market peaks
• Bank of America analysts see no conditions typically preceding a market top, with strategists maintaining steady equity exposure amid confidence in corporate earnings
• Wall Street analysts continue forecasting double-digit earnings growth for 2026 with no downward revisions in early reporting season results

The Dow Jones Industrial Average closed January 2026 with a three-week losing streak, underperforming other major indices due to weakness in software and financial stocks. Major Dow components including Salesforce (down 20%), Microsoft (down 12%), and financials like JPMorgan Chase and American Express faced pressure from sector-specific headwinds. Despite the decline, analysts view the volatility as normal and note the Dow's relatively modest valuation of 23.6x trailing P/E compared to the S&P 500 and Nasdaq 100.

• Software stocks led Dow declines with Salesforce dropping 20% and Microsoft falling 12% year-to-date, while UnitedHealth Group declined 13%
• Financial sector stocks faced pressure from Trump administration's credit card cap proposals, impacting JPMorgan Chase and American Express
• The Dow's limited exposure to mega-cap AI tech stocks may prove a disadvantage if AI monetization accelerates, despite its lower valuation multiple

European software, data analytics, and advertising stocks suffered a sharp selloff on Tuesday as new AI models, particularly Anthropic's updated Claude chatbot, raised concerns about whether incumbent firms can defend their business models. Companies previously seen as AI winners, including RELX, Wolters Kluwer, and SAP, experienced significant declines as investors questioned their ability to monetize AI investments and compete with rapidly evolving AI technologies.

• RELX and Wolters Kluwer, both serving the legal analytics industry, dropped over 10% following Anthropic's Claude chatbot updates
• SAP plunged over 16% last week after missing cloud revenue forecasts, wiping out $40 billion in market value in one day
• Advertising firms face particular pressure, with a Barclays survey identifying them as the most exposed European media sector to AI disruption, ranking WPP, Omnicom, and Publicis as top 'AI losers'

US stock futures edged higher on Tuesday as investors responded to a strong earnings season kickoff, with S&P 500 futures up 0.1% and Nasdaq 100 futures gaining 0.31%. Market sentiment was boosted by upbeat results from tech companies like Palantir and Teradyne, though volatility persisted in commodities and crypto markets. Over 100 S&P 500 companies are set to report earnings this week, including AMD, Pfizer, Amazon, and Alphabet.

• Palantir surged 11% on strong Q4 results and guidance, while Teradyne jumped over 20% on better-than-expected forecasts driven by data-center demand; Nvidia fell 3% after reports its OpenAI investment plans had stalled
• Bitcoin dropped to its lowest level since April as risk appetite waned, while precious metals rebounded sharply with spot gold up 5.52% to $4,917.17 per ounce and silver rising 9.5% to $86.83
• A partial US government shutdown has delayed key economic data releases including January employment figures and JOLTS, adding uncertainty as investors assess growth and returns from AI-related capital spending

Indian markets have responded positively to the recent India-US trade breakthrough, raising hopes that foreign institutional investors (FIIs) may return after months of net selling. FIIs withdrew ₹106,606 crore from Indian equities since August 2025 amid trade tensions, while domestic institutional investors (DIIs) invested a record $90.1 billion in 2025, cushioning the market impact.

• FIIs turned net buyers of ₹1,906 crore in early February 2026 after persistent selling, signaling a potential shift in sentiment following the trade deal
• India's equity market has underperformed other emerging markets by around 40% over the past year due to geopolitical pressures and domestic headwinds
• Analysts view the trade agreement as a structural positive that reduces policy risks and could re-anchor foreign capital to India's growth story, though execution risks remain

U.S. equities rose on Monday with the S&P 500 gaining on strong tech performance, while a sharp rebound in U.S. manufacturing activity is expected to limit Federal Reserve rate cuts. President Trump announced a trade deal with India requiring it to halt Russian oil purchases in exchange for reduced tariffs from 50% to 18%, boosting India's rupee and stocks significantly.

• U.S. manufacturing expanded in January per ISM survey, complicating the Fed's easing plans and interest rate outlook
• Gold surged over 5% on Tuesday, tracking for its largest single-day gain since 2008 after recent precious metals volatility
• India's rupee saw its biggest one-day boost in seven years following the U.S.-India trade deal, with Indian stock indexes jumping over 2%

U.S. space stocks rose on Tuesday after Elon Musk announced SpaceX's merger with xAI, valued at $1.25 trillion, aimed at expanding AI infrastructure in space. Musk projects space-based AI compute will become cost-effective within 2-3 years as the combined entity pursues artificial general intelligence. SpaceX is also planning an IPO that could value it above $1.5 trillion.

• Space stocks rallied with Rocket Lab and Planet Labs up 3%, Redwire up 4.9%, and several others posting gains of 1-2% in premarket trading
• The merger combines AI, rocket technology, satellite internet, and communications into a vertically integrated entity, with SpaceX recently requesting permission to launch solar-powered satellites for AI data centers
• Seraphim Space CEO called it 'the strongest validation yet that space will be the backbone of the next wave of AI' as global space tech investment accelerates

U.S. brokerage firms may start charging distribution fees to ETF managers to recover revenue lost from commission-free trading, according to J.P. Morgan. The shift comes as investors migrate from mutual funds to ETFs while brokers offer zero-dollar trading commissions. This could mark a significant change in the $13.5 trillion U.S. ETF market.

• J.P. Morgan estimates brokers could target 10-20% of ETF expense ratios, generating $2-4 billion annually in new distribution costs from the $21 billion U.S. ETF management fee pool
• Commission-free trading introduced by platforms like Robinhood forced traditional brokers including Fidelity and Charles Schwab to slash trade commissions to zero, pressuring revenue
• Large ETF managers like BlackRock and Vanguard are better positioned to negotiate fees, while mid-sized players like Invesco may face greater pressure from the new fee structure

A study published in Energy Research & Social Science finds that banning electricity disconnections for non-payment, as implemented in some European countries and Australia, can protect vulnerable consumers without destabilizing energy markets. The research examined policies in Spain, France, and Ireland, where 20 million European households faced disconnections in 2022, and proposes that similar protections could be adopted globally.

• Spain prohibits disconnecting vulnerable customers and covers costs for the most vulnerable, while France and Ireland ban winter disconnections and allow supply reduction instead of complete cutoffs
• About 23,000 Australian households lost electricity in 2023-24 for non-payment, with minimum debt thresholds of AU$500 before disconnection
• Researchers recommend extending protections to embedded network residents (apartment complexes, caravan parks) and prepayment meter users who currently lack standard consumer safeguards

Elon Musk's SpaceX has acquired his AI company xAI in a $1.25 trillion merger, combining aerospace, satellite internet, and artificial intelligence capabilities. The deal values SpaceX at $1 trillion and xAI at $250 billion, positioning the combined entity for a public offering later this year that would make it the world's most valuable private company going public.

• The merger consolidates xAI properties including the Grok chatbot and social media platform X under SpaceX ahead of a planned IPO reportedly timed to coincide with Musk's 55th birthday on June 28
• Musk cites space-based datacenters as key rationale, arguing that global electricity demand for AI cannot be met with terrestrial solutions and that 'space-based AI is obviously the only way to scale'
• xAI recently raised $20 billion in Series E funding at a $230 billion valuation despite controversies over Grok promoting racist ideology and nonconsensual deepfake images

India's Nifty 50 stock index surged 5% on Tuesday following a U.S.-India trade agreement that significantly reduces tariffs. The deal cuts U.S. tariffs on Indian goods from over 50% to 18%, while India commits to eliminating trade barriers against U.S. products and stopping purchases of Russian oil.

• U.S. tariffs on Indian exports dropped from over 50% (including a 25% levy related to Russian oil purchases) to 18%, while India agreed to reduce its tariff and non-tariff barriers to zero
• India committed to halt Russian oil purchases and increase purchases from the United States as part of the agreement reached between President Trump and Prime Minister Modi
• The sharp tariff reduction on 'made in India' products marks a major shift in bilateral trade relations and immediately boosted investor sentiment in Indian markets

US stock futures advanced on February 3, 2026, supported by easing AI spending concerns, strong manufacturing data, and optimism over a potential end to the US government shutdown. Markets are focused on upcoming JOLTs job openings data and Fed speakers for signals on potential rate cuts in 2026. A newly announced US-India trade deal, which reduces reciprocal tariffs and includes over $500 billion in US product purchases, also boosted risk appetite.

• The US-India trade agreement reduces US reciprocal tariffs from 25% to 18%, with India committing to buy over $500 billion in US products and stop purchasing Russian oil.
• Economists expect JOLTs job openings to decline from 7.146 million to 7.1 million, which would support expectations of multiple Fed rate cuts in 2026 and boost equity valuations.
• All three major index futures (Dow, Nasdaq 100, S&P 500) are trading above their 50-day and 200-day EMAs, signaling bullish momentum, with key upcoming earnings from PepsiCo, AMD, and PayPal.

Australia's Reserve Bank raised its policy rate by 25 basis points to 3.85% on Tuesday, marking its first rate hike since November 2023. The increase comes as inflation hit a six-quarter high, with central bank officials signaling further tightening may be necessary if inflation remains persistent above the 2.5% target.

• The 25 basis point hike to 3.85% matched economist expectations and follows six quarters of rising inflation
• RBA Governor Michele Bullock previously stated rate cuts were off the table 'for the foreseeable future' and indicated the bank would assess data meeting-by-meeting
• Australia's economy grew at its fastest pace in two years during Q3, expanding from a revised 2% in the previous quarter

Elon Musk is merging SpaceX with his AI startup xAI, ostensibly to build 'orbital data centers,' but the primary motivation appears to be securing capital for cash-strapped xAI. SpaceX is pursuing an IPO that could value it at up to $1.5 trillion, providing crucial funding access as xAI reportedly burned $9.5 billion through the first nine months of 2025. The deal, completed February 2, capitalizes on current investor enthusiasm for AI and a favorable regulatory environment under the Trump administration.

• xAI burned approximately $9.5 billion in the first nine months of 2025 and needs massive capital to compete with OpenAI (valued at $500 billion) and Anthropic (valued at $350 billion), while xAI's latest valuation stands at $230 billion
• SpaceX is pursuing an IPO to raise up to $50 billion at a potential $1.5 trillion valuation, with the merger allowing Musk to tap into AI investor appetite while SpaceX has limited capacity to deploy capital in its core satellite business
• The deal benefits from a favorable regulatory landscape including Trump-appointed officials at NASA, FCC, and FTC, with Musk's allies David Sacks as AI czar and former SpaceX customer Jared Isaacman now heading NASA