U.S. Markets Under Pressure as Tech-Led Selloff, Volatile Commodities, and Dovish Rate Expectations Shape Risk Sentiment

Index Update:  On Thursday, U.S. equities extended their decline for a third session as technology stocks led losses, driven by concerns over rising AI-related capital spending and weakness across semiconductors, while softer labor market data reinforced a broader risk-off mood among investors.  AI and crypto-related stocks drove a premarket rebound led by gains in Nvidia, AMD, Broadcom, Micron, and Coinbase, while Amazon tumbled sharply on heavy AI spending plans, dragging Apple and Alphabet lower, as major U.S. indices headed for a weak first week of February—particularly the Nasdaq.

Market Movers:  On Thursday, the top gainers were Liminatus Pharma, Inc. (+43.36%), followed by Phibro Animal Health Corporation (+21.95%). On the contrary, Geospace Technologies Corporation. (-41.50%), and Fluence Energy, Inc. (-34.63%) declined the most the same day.

Commodities Update:  Brent and WTI crude futures hovered near $67.5 a barrel on Friday, giving up earlier gains and heading for their first weekly decline in seven weeks as Middle East supply fears eased, while uncertainty around U.S.–Iran nuclear talks and Saudi Arabia’s price cuts for Asian buyers pointed to ongoing market caution and potential oversupply. Gold rebounded to around $4,870 an ounce amid sharp market volatility but remained on course for a second straight weekly decline, as weaker U.S. labor data supported expectations of Fed rate cuts while earlier record highs triggered heavy profit-taking. Silver saw even more dramatic swings, surging over 4% after a steep drop, yet stayed well below its January peak and headed for another weekly loss, with speculative positioning and a stronger dollar amplifying pressure across precious metals.

Macro Updates:  Dollar Holds Near Two-Week High on Safe-Haven Demand and Fed Policy Shifts

The U.S. dollar hovered just below 98, supported by risk-off flows amid broad market weakness and a boost from Kevin Warsh’s nomination as Fed chair, which reinforced expectations of tighter balance sheet management. While softer U.S. labor data fueled hopes for rate cuts later this year, the greenback remained firm against major currencies, rising most sharply versus the yen and holding gains against the euro and pound.

Bonds Commentary:  The U.S. 10-year Treasury yield dropped to a three-week low below 4.2% as a series of weak labor market reports strengthened expectations for multiple Federal Reserve rate cuts this year, while steady Treasury issuance plans—tilted toward short-term bills—aimed to contain borrowing costs in a high-rate environment.

Futures Update:  U.S. stock index futures posted mild gains on Friday, clawing back some of the sharp declines from the previous session even as Amazon shares weighed on sentiment after the company signaled a substantial rise in capital spending for 2026. Dow futures were higher by 130 points, or 0.3%, S&P 500 futures increased 28 points, or 0.4%, and Nasdaq 100 futures rose 135 points, or 0.6%.

Following the mixed performance in the previous session, major U.S. stock indices all declined sharply during Thursday's trading. The technology-heavy Nasdaq led the decline, tumbling to its lowest closing levels in over two months. The S&P 500 fell by 84.32 points, or 1.23%, closing at 6,798.39. From a technical perspective, the index is approaching immediate support levels and may experience some relief rally in today’s session, potentially moving upward. However, resistance could be encountered at its falling moving averages, which are positioned above the current price. The 14-day Relative Strength Index (RSI) remains below the midpoint, indicating a continued negative bias. Key support is observed around 6,700, a level that could trigger a rebound, while resistance is near 6,900.