General Market News

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

Tech sector selloffs intensified as chipmakers and mega-caps tumbled, with AMD plunging 17% and Palantir dropping 12%. The software sector has lost nearly $1 trillion in value over one week as investors reassess AI development's impact. Alphabet's plan to double capital spending to as much as $185 billion also unsettled markets, raising concerns about massive AI investments paying off.

• AMD fell 17% and Palantir declined 12%, with volatility spreading to Asian markets where South Korea's Kospi dropped nearly 4%
• Alphabet announced capital expenditure of $175-$185 billion for 2026, roughly double prior year levels, causing its stock to fall 2% after hours
• The software sector has lost almost $1 trillion in market value in just one week as anxiety grows over AI's disruptive threat to existing businesses

Kevin Warsh, President Trump's nominee for Federal Reserve Chair, faces scrutiny over whether he will implement the rule-based, limited-intervention monetary policy he has advocated for 15 years, or take a more pragmatic approach. His nomination tests long-standing conservative ideas about constraining the Fed's expansive role in the economy, including its $6 trillion balance sheet. Warsh has recently suggested flexibility on rate cuts despite above-target inflation, raising questions about his commitment to strict policy rules.

• Warsh has called policy rules 'aspirational' rather than binding, and recently cited productivity gains as justification for rate cuts even with inflation above the Fed's 2% target, aligning with Trump's preferences
• Colleagues describe Warsh as 'rules with discretion' - hawkish on inflation but pragmatic about markets and politics, not 'hidebound' to strict monetary frameworks despite his Hoover Institution affiliation
• Warsh aims to shrink the Fed's balance sheet from over $6 trillion to around $3 trillion, but acknowledges changes 'will take time' and cannot happen overnight, with success dependent on building market trust in Fed independence

Major U.S. tech stocks plunged after Alphabet announced capital expenditures of $175-$185 billion for the year, significantly exceeding Wall Street estimates and heightening concerns about unsustainable AI investment levels. The sell-off spread globally, with Asian equipment providers dropping sharply and precious metals tumbling, as investors who had increased tech exposure ahead of earnings season faced substantial losses.

• Alphabet's capex guidance of $175-$185 billion shocked analysts and triggered a broad tech sell-off despite solid quarterly results
• Asian markets suffered steep losses with South Korea's index down 3.5% and Taiwan off 1%, while silver plummeted 14% and gold fell below $5,000 per ounce
• The ECB and Bank of England are expected to hold rates steady, with the ECB concerned about euro strength potentially causing inflation to undershoot targets

The U.S. Federal Reserve announced it will keep large bank capital buffers unchanged during the 2026 stress testing cycle and will not revise stress capital buffers until 2027. This pause allows the Fed to review potential deficiencies in its stress test models and incorporate planned changes aimed at increasing transparency in the annual exercise.

• Fed Vice Chair for Supervision Michelle Bowman stated capital buffer revisions will be delayed until 2027 to allow time to identify model deficiencies
• The Fed proposed changes in October to make its stress testing models and scenarios open to public feedback for greater transparency
• Large banks will maintain their current capital requirements through the 2026 testing cycle while the Fed evaluates its methodology

Tech stocks are experiencing a significant sell-off as investors rotate into defensive sectors and value stocks, a shift market experts are calling 'healthy' for the broader market. The S&P 500's tech sector is the worst performer year-to-date, down 4%, while energy and consumer staples have risen double digits. Concerns about AI's disruptive potential and rich tech valuations, combined with accelerating earnings growth outside the Magnificent Seven, are driving the rotation away from Big Tech's longstanding market dominance.

• Bank of America clients have invested more in consumer staples stocks in the past month than any four-week period since 2008, while selling tech stocks in four of the past five weeks
• The Magnificent Seven now account for a record 27.8% of S&P 500 earnings, but 90% of S&P 500 companies beat Q4 earnings estimates, suggesting growth is broadening beyond Big Tech
• JPMorgan strategists view the rotation as addressing concentration risk concerns, with defensive sectors like consumer staples and industrials positioned to benefit from current market dynamics and Washington policy initiatives

Hedge funds have generated $24 billion in profits by short-selling software stocks in 2026, and are increasing these bets as the sector experiences a brutal sell-off. The software industry has lost $1 trillion in market value this year, with the iShares Expanded Tech-Software Sector ETF down 30% from its September 2025 peak. Funds are targeting companies providing basic automation services that could be easily replaced by new AI tools.

• The iShares Expanded Tech-Software Sector ETF (IGV) has fallen 30% from its all-time high in September 2025, with major holdings like Salesforce and ServiceNow down 15% and 21% respectively
• TeraWulf has over 35% of its float sold short, while Dropbox and MongoDB have 19% and 17% short interest respectively, indicating concentrated bearish bets
• Analysts believe the software sector may be undergoing a 'structural change' driven by AI disruption, with hedge funds targeting companies whose automation services can be replicated by AI tools

AT&T announced a partnership with Amazon's AWS and Project Kuiper satellite network to provide fixed broadband services to business customers in underserved areas. The announcement caused significant selloffs in satellite communications competitors AST SpaceMobile and GlobalStar, with their stocks falling 13% and 6% respectively. The partnership appears focused on enterprise connectivity rather than consumer mobile phone satellite services.

• ASTS stock tumbled over 13% to 100.03 and GSAT stock fell more than 6% to 57.91 on the news, while AT&T stock rose 1% and Amazon stock dipped 2%
• Amazon's Project Kuiper, still in testing phase, plans to launch over 3,000 satellites to provide internet connectivity to 400-500 million households, competing with Elon Musk's Starlink
• The partnership will enable AT&T to deliver fixed broadband services to business customers using Project Kuiper's low-Earth-orbit satellite network and AWS cloud capabilities

The software sector experienced its worst selloff since 2022, falling nearly 4% on Tuesday and another 1% on Wednesday for a sixth consecutive session, but failed to attract typical dip-buying activity from bargain hunters. Unlike previous tech routs, investors and options traders showed little interest in purchasing beaten-down software stocks, maintaining a predominantly defensive stance. The absence of buyers marks a notable shift in market behavior for a sector that has historically drawn strong support during downturns.

• The S&P 500 software and services index fell nearly 4% on Tuesday and declined another 1% on Wednesday, marking the worst drawdown since the 2022 rate-driven selloff
• Options flow in software ETFs like IGV and ARKK remained 'overwhelmingly defensive' with traders pressing downside exposure rather than buying dips, according to Susquehanna Financial
• Microsoft was a notable exception attracting some buyers, but even there short interest increased by about 20% over the past week as shorts added positions into weakness rather than covering