During the week of February 2-6, 2026, U.S. financial markets experienced high volatility, marked by a strong sell-off mid-week, followed by a significant recovery on Friday. The period was characterized by capital rotation moving out of the technology sector into broader sectors, with concerns about massive AI investments as well as their impact on the software industry. Soft labor market data led to expectations of more cuts by the Federal Reserve in 2026. Despite the turbulence, the Dow Jones reached a historic milestone, closing above 50,000 points for the first time.
Stock indices ended the week mixed, with value companies and small caps outperforming technology giants, which came under pressure. The Nasdaq declined approximately 1.8% for the week, while the S&P 500 closed slightly lower (-0.1%) after a 2% recovery on Friday. The Russell 2000 (small caps) showed strength, rising 2.2%. In the fixed income market, 10-year Treasury yields fell from about 4.29% at the beginning of the week to approximately 4.20%, as investors sought safety amid increased risk aversion.
Crypto and precious metals also showed high volatility, reacting to macroeconomic data and risk sentiment shifts. Bitcoin fell to near $60,000 on Wednesday before recovering to over $70,000 on Friday. Gold, meanwhile, showed strength at the end of the week, reaching approximately $4,956 per ounce. For this new week, the main drivers will be the payroll report, consumer inflation figures and corporate earnings results.
