Market Report.
📅 Non-farm payrolls for January 2026 are not being released on the usual “Jobs Friday” because a partial U.S. government shutdown forced the Bureau of Labor Statistics (BLS) to halt data publication and push the report back to 11 February, just as risk assets are already under pressure globally.
📉 A tech sell-off occurred on Thursday, driven by soaring capital expenditures (capex) and fears that AI is eroding the value of software firms. Amazon’s shares plunged over 11% in extended trading after the company reported Q4 earnings that missed expectations. The main concern came from Amazon’s projected capex of $200 billion, far above analysts’ estimates of $146.6 billion and significantly higher than the roughly $131 billion in 2025.
💰 Amazon’s capex projection dwarfs Alphabet’s projected capex range of $175 billion to $185 billion, which already gave traders and analysts pause. Investors are growing wary of how much Big Tech companies are spending to chase the next phase of artificial intelligence, as there are fears that AI is eroding the value of software firms.
🤖 In fact, these are not the only factors that have disrupted the technology sector globally. There are other issues as well. The software sector has been under pressure for months due to concerns about the potential impact of AI on their business models. The release of a new AI automation tool from Anthropic has sparked a widespread selloff in software, financial, and other related stocks.
⚙️ A new AI automation tool launched by Anthropic PBC caused a $285 billion drop in stocks in the software, financial services, and asset management sectors.
📉 Anthropic’s tool can automate work like contract reviewing and legal briefings, heightening competition and being viewed as a potential negative by Morgan Stanley analysts. The selloff impacted software stocks globally, with Indian IT companies like Tata Consultancy Services and Infosys, as well as cloud-based accounting software maker Xero in Australia, seeing significant declines.
🏦 Shares of business development companies, credit providers, and asset managers were also caught in the selling, as fears of AI disruption rattled the broader market.
₿ The other major player that saw sharp declines yesterday was Bitcoin.
📉 Bitcoin experienced a volatile trading session, briefly falling over 50% from its October peak before bouncing back. It fell close to the 60,000 $ level, a more than 50% retreat from its all-time high of over $126,000 in October.
💥 About $2.1 billion of bullish bets across all cryptocurrencies were liquidated in the past 24 hours, putting pressure on crypto holders like Michael Saylor’s MicroStrategy. In fact, his company bought 855 BTC during the week of 26 January to 1 February 2026 for about 75.3 million USD.
🏢 In the corporate world, Novo Nordisk’s decline in recent sessions has also been impressive. Since the end of January, the company has lost more than 30% of its market capitalization.
⚖️ Novo Nordisk has announced it will take legal action against telehealth provider Hims & Hers after the company revealed a $49 copycat version of Novo’s Wegovy weight loss pill. The Novo Nordisk pill costs three times as much.
🚨 Novo Nordisk called Hims & Hers’ actions “illegal mass compounding that poses a significant risk to patient safety” and said they will take legal and regulatory action to protect their intellectual property and the integrity of the U.S. drug approval process.
📉 Shares of Novo Nordisk and rival Eli Lilly both fell around 7% after Hims announced the cheaper Wegovy copy, which it says uses a different formulation and delivery system than the FDA-approved Wegovy.
📊 The news adds to the pressure Novo Nordisk has been facing, with the company forecasting sales and profits declining 5-13% in 2026 due to pricing pressures and loss of exclusivity for its semaglutide products. In contrast, Eli Lilly sees sales growing by about 25% this year as it prepares to launch its own oral GLP-1 weight loss drug, orforglipron.
🏛️ The battle between the administration and the Fed does not seem to have dissipated with the nomination of Powell’s successor.
⚠️ Treasury Secretary Scott Bessent refused to rule out the possibility of a criminal investigation of Federal Reserve chair nominee Kevin Warsh if Warsh does not cut interest rates to President Trump’s liking. During questioning from Senator Elizabeth Warren, Bessent said it is “up to the president” whether Warsh would be sued or investigated by the Department of Justice for not cutting rates as Trump wants.
🏦 This raises concerns about the independence of the Federal Reserve, as presidents typically do not interfere with the central bank’s interest rate decisions. The DOJ is already investigating current Fed Chair Jerome Powell over cost overruns on the Fed headquarters renovation, which has been seen as a thinly veiled attempt by Trump to pressure the Fed.
🏛️ Senator Thom Tillis has vowed to block Warsh’s nomination unless the probe into Powell is dropped, while Warren and other Democrats have called for holding up Warsh’s nomination until the investigations into Powell and Governor Lisa Cook are ended.
🏦 And now, returning to the technical waters of central banks: The Bank of England believes it has brought inflation under control, but its latest forecasts show a higher peak in unemployment compared to previous projections.
📉 While inflation is expected to drop to around the 2% target by April and stay there for the next three years, the BOE had to make difficult trade-offs between controlling inflation and the risks to the job market.
🗳️ The Monetary Policy Committee voted 5-4 to keep interest rates at 3.75%, with Governor Andrew Bailey casting the deciding vote. Some members, like Deputy Governor Sarah Breeden, argued for faster rate cuts to mitigate the risks to the labor market.
⚖️ The BOE is now balancing the need to maintain its focus on the 2% inflation target against the growing risks to the job market and economic growth, which could lead to a rate cut as soon as next month.
🇪🇺 The European Central Bank (ECB) left interest rates unchanged as expected, signaling comfort with the recent weakness of the U.S. dollar. The ECB acknowledged continued uncertainties around global trade policy and geopolitical tensions, but said it still sees inflation stabilizing at its 2% target over the medium term.
💶 The central bank discussed opening its liquidity facility more widely to give central banks outside the euro zone greater access to euros in times of crisis, hoping to capitalize on the shift away from the U.S. dollar.
📈 Markets expect the ECB to keep interest rates on hold for the rest of 2026, followed by some policy tightening later in 2027. Assuming that the European economy, especially the German economy, can afford such increases, given its precarious economic situation, having accumulated three consecutive years without economic growth.
🌍 Geopolitics.
🇮🇱 Benjamin Netyanahu now has problems with Egypt.
⚠️ Israeli Prime Minister Benjamin Netanyahu has expressed concerns about the growing strength of the Egyptian military, stating that Israel must “monitor it closely and prevent its excessive strengthening.”
🗺️ In 2025, Netanyahu reportedly asked the U.S. to pressure Egypt to scale back its military deployments and infrastructure development in the Sinai Peninsula, framing it as a violation of the peace treaty between the two countries.
🇪🇬 From Egypt’s perspective, the military buildup in Sinai is necessary for its own security and to prevent any mass displacement of Palestinians from Gaza into Egyptian territory, which is considered a red line for Cairo.
🕵️ New developments in the Epstein case. CBS reports that newly released DOJ video footage appears to show an unidentified person entering Jeffrey Epstein’s jail tier at approximately 10:39 p.m. on the night of his death. According to the report, this detail was not included in prior official accounts or reports and is being disclosed publicly for the first time.
📺 CBS notes that the footage has raised new questions, though authorities have not announced any revised conclusions or identified the individual shown.
☢️ Iran and the United States are set to hold high-stakes negotiations in Oman today over Tehran’s nuclear program, but there are deep rifts over the agenda.
⚔️ The U.S. wants the talks to cover Iran’s nuclear program, ballistic missiles, support for armed groups in the region, and “treatment of their own people”, while Iran insists the talks should only focus on nuclear issues.
🚢 Tensions are high, with the U.S. having conducted strikes on Iranian nuclear targets last June, and a buildup of U.S. naval forces in the region following a crackdown on protests in Iran.
🚨 Iran has warned it would respond harshly to any military strike, and has cautioned neighboring countries hosting U.S. bases that they could be targeted.
📈 Market Review.
📉 Market declines are continuing, driven primarily by weakness in the US technology sector. We have provided detailed analysis in the news section. E‑mini S&P 500 futures are currently searching for support around the 6,800‑point level, while Nasdaq 100 futures are doing the same near 24,500 points.
💵 The US dollar continues to strengthen gradually, with the DXY index approaching the 98‑point mark. As a result, EUR/USD has slipped below 1.18, although without extending too far, and is currently trading around 1.1790.
🇪🇺 European markets are also showing mild declines, although some stabilisation is emerging. DAX 40 futures are rebounding modestly and are currently trading around 24,590 points, while Euro Stoxx 50 futures are also attempting a rebound towards 5,935 points.
🛢️ The oil market remains range‑bound, with spot Brent crude trading around $68.24 per barrel.
🥇 Gold futures have also moved into a sideways consolidation phase in recent hours, hovering around $4,850 per ounce.
₿ Finally, Bitcoin has experienced dramatic volatility, plunging during late trading hours towards the $60,000 level before rebounding to approximately $64,800.
