General Market News

A San Francisco Federal Reserve study found that the recent decline in unauthorized immigration to the U.S. has slowed employment growth, particularly in construction and manufacturing sectors. The research analyzed immigration patterns from 2021 through early 2024, showing local job growth moved in lockstep with unauthorized immigrant worker flows. The findings have significant implications for the labor market and housing supply under the Trump administration's immigration crackdown.

• U.S. job additions dropped dramatically to only 181,000 in 2025 from 1.459 million in 2024, with economists linking the decline to sharply reduced immigration flows
• Construction sector showed the most notable impact, with falling unauthorized immigrant worker flows potentially slowing residential construction and housing supply growth
• Fed economists warn that employment growth will likely face continued downward pressure as long as declines in unauthorized immigrant worker flows persist

Mining stocks fell sharply on Tuesday as gold and silver prices dropped approximately 3% and 6% respectively from recent all-time highs. Major silver and gold miners including Pan American Silver, Wheaton Precious Metals, and Barrick Mining declined 3-6% despite the sector approaching a critical earnings period with analysts expecting substantial profit growth.

• Key mining stocks like Wheaton Precious Metals and Barrick Mining are down about 14-15% from their late January peaks, when they hit historic highs alongside precious metals prices
• SSR Mining, Coeur Mining, Pan American Silver, and Kinross Gold are reporting earnings this week with analysts projecting dramatic growth: Coeur's EPS expected to triple to 38 cents, while SSR Mining's EPS is forecast to quintuple to 77 cents
• Despite strong fundamentals, even blockbuster earnings have failed to lift mining stocks, as Barrick Mining's 115% EPS growth report earlier this month did little to reverse the sector's decline

President Trump predicted the Dow Jones Industrial Average will reach 100,000 by January 2029 after the index recently hit 50,000 for the first time. Market experts view this target as unlikely, noting it would require the 30-member index to post annual returns in the mid-20% range for three consecutive years, far exceeding historical averages. A more realistic three-year target is 60,000 to 70,000, according to portfolio managers.

• Historical data shows the Dow took roughly eight years to move from 25,000 to 50,000; based on averages dating back to 1928, reaching 100,000 would typically require about 10 years
• Constituent companies would need approximately 25% annual earnings growth to hit the 100,000 target, with the index's price-to-earnings ratio already at a historical high of around 30
• The Dow is a price-weighted index of 30 blue-chip companies led by Goldman Sachs, Caterpillar, and Microsoft, with high-growth tech stocks like Nvidia and Apple having smaller weightings

Major U.S. stock indexes declined on Tuesday as investors rotated out of tech and AI stocks following a reassessment of the sector's strength. The S&P 500 fell below its 50-day moving average at 6,893.79, entering a technically weak position for the third consecutive session. Traders are questioning valuations across all three major indexes as AI stocks diverge sharply and concerns grow that not all AI-themed companies will survive competitive pressures.

• The S&P 500 broke below its 50-day moving average for a third session, with key support levels identified at 6,762.10 to 6,705.42 (short-term value zone) and 6,510.99 (200-day moving average)
• Investors are recognizing that AI expansion threatens not just employees but entire software business models, causing sharp divergence among AI stocks as the market reprices risk
• All three major indexes are declining simultaneously, including the Dow Jones, raising concerns about where capital can be safely deployed outside of equities

Multiple prominent stocks experienced significant declines last week, with financial sector stocks, software companies, and growth names among the worst performers. Bank stocks struggled broadly while earnings disappointments hit companies like Robinhood, Cisco, and DraftKings. The analysis highlights a choppy market environment with notable weakness across various sectors despite ongoing earnings season.

• Robinhood (HOOD) missed Q4 revenue estimates and suffered four price-target cuts, with J.P. Morgan slashing its target to $113, resulting in five consecutive weekly losses
• Cisco Systems (CSCO) fell for four straight days despite a top-line earnings beat, as rising memory chip prices and AI hardware demand created supply shortages
• DraftKings (DKNG) posted a top-line beat but issued a disappointing fiscal year revenue forecast, triggering price-target cuts; the consensus target of $43.61 represents a 96% premium to current levels

JP Morgan analysts have created a research basket called 'Top Mispriced Stocks Amid AI Disintermediation' to identify companies unfairly punished by market fears of AI disruption. The basket includes stocks across defense, payments, software, and consumer sectors where analysts believe protective business moats have been undervalued. JP Morgan argues that certain business models with regulated datasets, proprietary workflows, and embedded enterprise integrations are more resilient to AI automation than recent sell-offs suggest.

• The basket includes C.H. Robinson (NASDAQ:CHRW), which was caught in an AI-driven sell-off triggered by concerns around a competitor that was 'formerly a karaoke machine importer'
• Wayfair (NYSE:W) was identified as less vulnerable to AI-driven shopping agents because home furnishings require high-involvement decisions that cannot be reduced to simple automated commands
• JP Morgan worked with its Delta One team to package picks from multiple sectors where the market's 'shoot-first reaction has outpaced fundamentals'

US stock futures opened lower on Tuesday after a long weekend, with the Nasdaq poised to extend its fifth consecutive weekly decline - its longest losing streak since 2022. Technology stocks continue to face pressure amid concerns over AI investment returns and business model disruption, with the S&P 500 down 1.4% last week and the Nasdaq dropping over 2%.

• Nasdaq futures fell 0.8%, leading declines ahead of the S&P 500 (-0.4%) and Dow Jones (-0.2%), as investors question returns on massive AI spending commitments
• US software and services sector now trades at a discount to the broader market for only the second time in 30 years, according to Hargreaves Lansdown
• Key catalysts ahead include Palo Alto Networks earnings, Federal Reserve meeting minutes on Wednesday, and Friday's core PCE inflation data

AI stocks have experienced significant volatility in early 2026, with software companies particularly hard hit amid concerns that AI model builders like OpenAI and Anthropic will become competitors. Hyperscalers including Amazon, Alphabet, Meta, Microsoft, and Oracle have announced massive capital spending increases totaling $645 billion for 2026, a 56% jump, while none remain in positive territory year-to-date. The market is rotating away from tech into traditional sectors like energy, materials, and healthcare.

• Software stocks face a 'SaaS-pocalypse' as concerns grow that AI agents and coding tools will disrupt traditional software-as-a-service business models and per-seat pricing structures
• Four major hyperscalers are expected to spend $645 billion on AI infrastructure in 2026, up $230 billion from 2025, with companies like Google raising $9 billion through bond sales to fund AI ambitions
• Most major AI stocks are down year-to-date including Palantir (-26%), Salesforce (-28%), Oracle (-18%), Amazon (-14%), and Microsoft (-17%), with Nvidia earnings on Feb. 25 expected to bring additional volatility

Prediction market platforms like Kalshi and Polymarket face at least 20 federal lawsuits from state regulators who argue these companies are operating as unlicensed gambling operations. The platforms classify themselves as federally-regulated financial exchanges offering 'event derivatives' under CFTC oversight, allowing them to bypass state gaming laws that govern traditional sportsbooks. The legal dispute could reach the Supreme Court as states seek to enforce gambling regulations and collect taxes.

• Kalshi's January trading volume reached nearly $10 billion (mostly sports-related), with over $1 billion traded during Super Bowl Sunday alone, as major operators like FanDuel and DraftKings launch competing platforms
• Unlike state-licensed sportsbooks (available at 21+ with consumer protections), prediction markets operate nationwide for users 18+ without state gambling taxes, age restrictions, or responsible gaming mandates
• Trump's CFTC has reversed course from the Biden administration, with new chair Michael Selig signaling support for event contracts and creating an advisory committee including CEOs from Kalshi, Polymarket, Coinbase, and FanDuel

Kevin Warsh, nominated to lead the Federal Reserve, has long advocated for shrinking the Fed's balance sheet from its current $6.7 trillion level, but experts warn this goal faces major technical and regulatory obstacles. The Fed's current monetary policy framework requires banks to hold large reserve levels, making significant balance sheet reduction potentially destabilizing to money markets without substantial changes to financial regulations and Fed operating procedures.

• The Fed's balance sheet peaked at $9 trillion in spring 2022 and has been reduced to $6.7 trillion, but further contraction (quantitative tightening) was halted in 2024 when money markets became unstable
• Analysts say shrinking the balance sheet further would require regulatory reforms to reduce banks' demand for reserves, a process taking 'quarters, not months,' and could increase financial stability risks
• Most Fed watchers believe Warsh will be constrained by financial realities, with analysts stating a return to pre-crisis policy tools or renewed quantitative tightening is unlikely as it would raise bond market borrowing costs

Top Wall Street executives including Goldman Sachs CEO David Solomon and Nasdaq CEO Adena Friedman will headline a 'World Liberty Forum' at Mar-a-Lago on Wednesday, hosted by Donald Trump Jr. and Eric Trump. The event, organized by the Trump family's crypto business World Liberty Financial, will also feature federal regulators and lawmakers, raising conflict of interest concerns among ethics experts given the Trump family has made over $1 billion from crypto projects during the president's first year in office.

• World Liberty Financial's USD1 stablecoin has surpassed $5 billion in circulation to become the fifth-largest stablecoin globally, with a 49% equity stake sold for $500 million to an Abu Dhabi-linked investment vehicle in January 2025
• Federal officials attending include CFTC Chairman Michael Selig, SBA Administrator Kelly Loeffler, and Under Secretary of State Jacob Helberg, alongside NYSE President Lynn Martin and Franklin Templeton CEO Jenny Johnson
• Six ethics experts expressed divergent views on conflicts of interest, with critics concerned about regulators and financial firms appearing to support a Trump family business, while defenders argue all presidents face inherent conflicts and note speakers are unpaid

U.S. Treasury yields declined on Tuesday during a holiday-shortened week as investors awaited several delayed economic data releases. The 10-year yield dropped over 3 basis points to 4.02%, while the 30-year yield fell to 4.66%, with markets closed Monday for Presidents' Day.

• Key data releases expected include ADP Employment Change, Empire Manufacturing Index, NAHB Housing Market Index on Tuesday, and delayed November-December housing data plus the Fed's preferred inflation gauge (PCE) on Friday
• FOMC minutes due Wednesday will be scrutinized for insights on the last interest rate decision and future monetary policy direction
• Traders are pricing in a 90% probability that the Federal Reserve will keep interest rates unchanged in the 350-375 basis point range

Luxury stocks including LVMH, Kering, and Hermes are experiencing heightened volatility as they recover from a two-year sales slowdown, driven by heavy hedge fund short positions and AI-related market concerns. The sector faces pressure from reduced wealthy consumer spending, with hedge funds' active trading against passive index funds amplifying price swings during earnings season.

• Luxury stocks and consumer discretionary sector were among the most shorted by hedge funds entering earnings season, with high short positions exacerbating volatility as investors bet on price declines
• Kering CEO warned that a potential AI market bubble and crash could severely impact luxury demand, as many wealthy Americans hold savings in stocks that fund their luxury purchases
• Valuation gaps are widening among luxury leaders: Hermes trades at 45 times forward earnings (over double LVMH's valuation) despite the sector slowdown, prompting investors to rotate between stocks seeking turnaround opportunities

Chinese equity markets have outperformed major US indices in 2026, driven by strong external demand and expectations of continued policy support from Beijing. The USD/CNY exchange rate fell below 7.0 as China reduced its US Treasury holdings to the lowest level since 2008, reflecting a strategic shift away from dollar dependence. The SSE Composite and Hang Seng Index are trading above key moving averages, targeting resistance levels near 4,191 and 30,000 respectively.

• Chinese exports rose 6.6% year-over-year in December 2025, with exports to Africa surging 25.8% while US-bound exports fell 20%, as Beijing diversifies trade partners ahead of April's Trump-Xi meeting.
• China plans to eliminate tariffs for 53 African nations starting May, after annual trade exceeded $300 billion, and now accounts for 20.9% of Latin American exports (excluding Mexico), surpassing both the US (16.4%) and EU (12.4%).
• Key downside risks include intensifying US-China trade tensions, potential tariffs from multiple governments, China's relationship with Iran as a major oil importer, and ongoing domestic challenges including deflation and the housing market crisis.

Cocoa beans from Ivory Coast's main harvest are piling up unsold in warehouses as exporters refuse to pay the government-set farmgate price of 2,800 CFA francs ($5.09) per kg amid a global cocoa price slump. The Coffee and Cocoa Council regulator has intervened to purchase 100,000 metric tons of unsold inventory, while some farmers are forced to accept illegal below-market prices as low as 1,500 CFA francs per kg due to financial pressures.

• Global cocoa prices fell to two-year lows due to declining demand, making Ivory Coast cocoa (world's largest producer) too expensive for exporters at the guaranteed farmgate price
• The regulator launched a January program to buy 100,000 metric tons of held cocoa and accelerated purchases in February due to concerns about declining quality in poor storage conditions
• Some buyers are illegally offering farmers 1,500-1,800 CFA francs per kg (46-64% of the regulated price), which desperate farmers accept due to lack of resources and mounting debts

London's FTSE 100 and FTSE 250 indexes rose 0.41% and 0.36% respectively on Monday, driven by a rebound in financial stocks following last week's AI-driven selloff. The gains come ahead of key UK economic data releases this week, including inflation, retail sales, and manufacturing activity reports that could influence the Bank of England's monetary policy decisions.

• British banks led gains with NatWest up 4.3% and Barclays up 2.7%, recovering after UK lenders posted their biggest weekly fall since late-March 2025 due to AI disruption concerns
• Investors are pricing in a 25-basis-point interest rate cut next month despite inflation remaining above the Bank of England's 2% target, as tight monetary policy weighs on the economy
• Pinewood stock plunged 28% after Apax Partners withdrew its $792 million buyout bid citing challenging market conditions, while SkinBioTherapeutics fell 41.4% on a profit warning and investigation into its former CEO

Major technology stocks have lost hundreds of billions in market value in early 2026 as investors grow skeptical about whether massive AI spending will deliver returns justifying their high valuations. Microsoft, Amazon, Nvidia, Apple, and Alphabet have collectively shed over $1.3 trillion in market capitalization. Meanwhile, non-AI-focused companies like TSMC, Samsung, and Walmart have gained significant value.

• Microsoft lost approximately $613 billion in market value amid concerns about AI business risks and competition from Google's Gemini and Anthropic's Claude, with its valuation dropping to $2.98 trillion
• Amazon's market cap fell by $343 billion (down 13.85%) to $2.13 trillion after announcing capital spending would jump more than 50% this year
• The shift reflects changing investor sentiment from rewarding long-term AI ambitions to demanding near-term earnings visibility, while TSMC, Samsung, and Walmart collectively added $746 billion in market value

European markets opened higher on Monday, with the pan-European Stoxx 600 up 0.4%, as investors assessed outcomes from the Munich Security Conference. The event highlighted growing concerns about transatlantic relations and Europe's push for greater defense spending and strategic autonomy. German Chancellor Friedrich Merz acknowledged a 'deep divide' in the transatlantic partnership, warning the post-World War Two rules-based order 'no longer exists.'

• Major European indices rose in early trading: London's FTSE 100 gained 0.15%, Germany's DAX advanced 0.34%, and France's CAC 40 climbed 0.1%
• European leaders at the Munich Security Conference emphasized the need for increased defense spending and discussed a common nuclear shield to enhance the continent's strategic autonomy
• Japan's economic growth came in at 0.2% annualized for the December quarter, significantly below the expected 1.6%, while U.S. markets remained closed for Presidents' Day

Global markets are bracing for continued volatility driven by AI disruption fears as major industry leaders gather at India's AI Impact Summit. Recent weeks saw sharp sell-offs across software, wealth management, credit, transport and real estate sectors as investors reassess which industries face disruption from agentic AI. The summit features top executives from Anthropic, Microsoft, and Mistral AI, with expectations of major cloud deals and AI infrastructure announcements.

• European software and analytics firms were hit hard, with RELX recording its worst session decline since 1988, while wealth managers also suffered significant losses
• UBS analysts warn that AI-driven disruption is accelerating beyond software and credit implications remain only partially priced in, with risks expected to increase through 2026-2027
• India's AI Impact Summit is expected to yield major partnership announcements and cloud deals as tech giants target India's large customer base and engineering talent pool

Federal Reserve Governor Stephen Miran, a Trump appointee, is advising Fed Chair nominee Kevin Warsh to adopt a forward-looking approach to monetary policy rather than the data-dependent stance favored by outgoing Chair Jerome Powell. Miran's comments signal a potential shift in the Fed's policymaking framework as Warsh's confirmation faces delays due to Republican opposition tied to a Justice Department probe into Powell.

• Miran argues the current economy does not warrant strict data dependence, stating 'The time for data dependence is when you have enormous uncertainty. I don't think we have enormous uncertainty.'
• Sen. Thom Tillis (R-N.C.) has placed a hold on Warsh's nomination until the administration concludes its investigation into Powell, requiring an unlikely 60-vote discharge to advance confirmation.
• Miran joined the Fed board in August amid turmoil including a legal clash between the Trump administration and Governor Lisa Cook, whose case is now before the Supreme Court.