Macro View - February 04, 2026 (EOD)

 ## Macro Summary Today, the market experienced significant volatility largely influenced by macroeconomic concerns surrounding the tech sector and broader economic indicators. The ongoing tech selloff was exacerbated by fears of artificial intelligence (AI) disrupting traditional software business models, leading to a reassessment of valuations across the tech landscape, particularly affecting major players like **AMD** and **NVIDIA**. This cautious sentiment was reflected in the performance of the Nasdaq, which struggled against a backdrop of rising interest rates and inflationary pressures. Additionally, economic data released today painted a mixed picture of the labor market. The ADP jobs report indicated a modest increase in private payrolls by only 22,000 jobs in January, significantly lower than expectations, raising concerns about the strength of the economic recovery. This disappointing data contributed to a risk-off sentiment among investors, while also prompting discussions on the potential for the Federal Reserve to adjust its monetary policy stance in response to softening labor conditions. ## Economic Data Reaction - **ADP Employment Change:** 22,000 vs. 150,000 expected - Market reaction was negative, contributing to the tech selloff and overall market anxiety. ## Fed & Central Banks Federal Reserve commentary remained focused on inflation risks, with several officials, including Fed Governor Cook, emphasizing the need for vigilance despite recent economic softening. The potential appointment of Kevin Warsh as the new Fed Chair also looms large, introducing uncertainty into future monetary policy direction. Investors are keenly awaiting clarity on how these developments will shape interest rate decisions moving forward. ## Rates & Bonds - 10-Year yield: 3.50% (+0.12%) - 2-Year yield: 4.20% (+0.10%) The yield curve steepened slightly, indicating a market perception of potential rate hikes in the near term driven by inflation expectations. ## Currency & Dollar The U.S. dollar showed mixed performance, strengthening against the yen amid ongoing election uncertainties in Japan, while losing ground against the euro as inflation data from the Eurozone suggested a cooling trend. This duality reflects the market's complex response to global economic conditions, with the dollar's strength negatively impacting commodities priced in USD. ## Commodities Wrap - Oil: $64.50 (+1.5%) - Gold: $5,025 (+2.3%) - Silver: $600 (+1.7%) Oil prices rose amid renewed geopolitical tensions, particularly related to U.S.-Iran relations, while gold and silver saw rebounds as investors sought safety in precious metals amidst ongoing market volatility. ## Global Markets Close - Europe: The FTSE 100 closed down 1.2%, while the DAX fell 0.8% as concerns over tech valuations spread. - Asia: The Nikkei 225 was down 1.5%, reflecting the cautious sentiment and potential broader market impacts from the tech sector's challenges. ## Tomorrow's Macro Focus Key macroeconomic events to watch include the release of the non-farm payrolls report, which will provide further insight into labor market trends and could influence Fed policy. Additionally, any updates regarding the Fed Chair nomination will be closely monitored as markets seek clarity on the future direction of monetary policy and its implications for market stability.