Market drivers and catalysts
Equities: U.S. tech slid on artificial intelligence disruption fears, Europe was flat, Japan hit records while Hong Kong edged higher.
Volatility: VIX back at 18, short-dated hedging active, macro and earnings in focus
Digital assets: Crypto stabilises, IBIT inflows selective, ETHA modest support
Fixed income: US treasuries and Japanese government bonds steady
Currencies: USD comeback was rejected Tuesday. JPY continues to crawl weaker ahead of Sunday election in Japan.
Commodities: Gold trades back above USD 5,000; Oil rises on Mideast flare-up
Macro events: Eurozone Jan. Flash CPI, US Jan. ADP Employment Change, US Jan. ISM Services
Macro headlines
The RealClearMarkets/TIPP Economic Optimism Index for the US rose to 48.8 in February 2026, exceeding expectations. The Six-Month Economic Outlook increased to 43.8, Personal Financial Outlook improved to 56.9, and Confidence in Federal Economic Policies grew to 45.7.
The S&P Global Australia Services PMI jumped to 56.3 in January from 51.1 in December, showing the fastest growth in nearly four years. The increase was due to strong service activity, new orders, and export demand. Employment grew amid labor constraints, while business confidence fell and inflation pressures eased.
- A new AI automation tool from Anthropic triggered a selloff across software, financial services, and asset management stocks. The move began ahead of the US open after details appeared on Anthropic’s website, with the tool’s ability to automate tasks such as contract reviews and legal briefings intensifying competitive concerns flagged by Morgan Stanley analysts.
New Zealand Q4 Unemployment Rate rose to 5.4% vs. 5.3% expected and 5.3% in Q3, although the higher number was due to a higher participation rate as employment change numbers were positive.
Michael Burry, who bet against the US housing market ahead of the 2008 financial crisis, warned that Bitcoin’s plunge could deepen into a self-reinforcing “death spiral,” inflicting lasting damage on companies that have spent the past year stockpiling the token.
Macro calendar highlights (times in GMT)
1000 – Eurozone Jan. Flash CPI
1315 – US Jan. ADP Employment Change
1500 – US Jan. ISM Services Index
1530 – US Weekly DoE Crude Oil and Product Inventories
Earnings events
Today: Alphabet, Eli Lilly, AbbVie, Novartis, Novo Nordisk, Uber, Qualcomm, UBS, Boston Scientific, ARM Holdings
Thursday: Amazon.com, Shell, Linde, Unilver, KKR
Friday: Toyota, Philip Morris,
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 fell 0.8% to 6,917.81, the Nasdaq 100 slid 1.6% to 25,338.62, and the Dow dropped 0.3% to 49,240.99 as tech led the pullback. Investors questioned high prices in artificial intelligence (AI) linked shares after faster-moving AI tools raised fresh worries about which business models stay defensible. PayPal sank 20.3% on weak guidance, Novo Nordisk dropped 14.6% after flagging a softer 2026 outlook, Palantir rose 6.8% after upbeat results, and Nvidia slipped 2.8% as chip shares cooled. Attention then shifted to the next wave of earnings and whether tech volatility stayed contained.
Europe: Europe finished almost flat, with the STOXX 600 up 0.1% to 617.93, the Euro STOXX 50 down 0.2% to 5,995.35, and the FTSE 100 off 0.3% to 10,314.59. Germany tracked the tone, with the DAX 40 edging 0.1% lower to 24,775 as investors balanced steady data with a fresh wobble in global tech sentiment. Daimler Truck jumped 5.9% on a bullish broker call, while Siemens Energy rose 4.7% after outlining a $1 billion push to expand U.S. production. Zalando sank 12.1% as analysts warned social media commerce could squeeze its growth, and focus turned to the European Central Bank (ECB) and the next wave of company guidance.
Asia: Asia turned more upbeat, led by Japan where the Nikkei 225 jumped 3.9% to 54,720.66, helped by a weaker yen and a broad rebound in economy-sensitive shares. Hong Kong was steadier, with the Hang Seng edging up 0.2% to 26,834.77 as U.S. data and firmer mainland equities improved risk appetite. Advantest gained 7.1% as chip-related names rallied, while CSPC Pharmaceutical climbed 8.2% to lead healthcare. The next tests were follow-through in China’s risk tone and Hong Kong’s December retail-sales print.
Volatility
Market volatility moved higher again on Tuesday, underlining how sensitive investors remain to macro and earnings headlines. The VIX closed at 18.00 on 3 February, up more than 10% on the day, as the S&P 500 fell 0.84% to 6,917.81. Short-dated volatility rose even faster, with VIX1D jumping above 14, showing that investors were actively hedging near-term risk rather than long-term uncertainty.
The backdrop remains event-driven. Markets are balancing softer growth momentum against firm labour data, sticky services inflation and an earnings season where investors are increasingly demanding evidence that heavy AI and technology spending will translate into profits. Today’s macro calendar, including US ADP employment, ISM services and JOLTS, adds to the sense that volatility could stay elevated through the rest of the week.
SPX expected move (to Friday 6 February): ~±83 points, or ~±1.2%, based on current options pricing.
Skew check – today’s expiry (4 February): options pricing shows no meaningful downside skew at the money. Near 6,915–6,920, call implied volatility is slightly higher than put implied volatility, pointing to a relatively balanced short-dated market and no clear panic bid for immediate downside protection.
Digital assets
Digital assets attempted to stabilise after recent weakness, but price action continues to mirror broader risk sentiment rather than charting an independent path. Bitcoin traded around $76,500, up modestly on the day, while ether hovered near $2,275. The message remains clear: crypto is still behaving like a high-beta macro asset, closely linked to equity volatility, rates and the US dollar.
ETF flows reinforced that selective tone. On 3 February, IBIT recorded inflows of $60m, even as total US bitcoin ETF flows were negative, highlighting dip-buying in the largest product rather than broad allocation back into crypto. Ethereum ETFs were marginally positive overall, with ETHA seeing inflows, offset by outflows elsewhere, suggesting cautious positioning rather than strong conviction.
Fixed income
US treasuries found support on a rough day for risk sentiment in equities. The benchmark US 2-year ended the day unchanged near 3.57% after an earlier extension higher to 3.59%, while the benchmark 10-year eased back lower to 4.27% after testing near 4.30% early Tuesday.
Japanese government bonds steadied Wednesday, with the benchmark 2-year benchmark JGB yield easing slightly lower to 1.28%, a basis point below the prior day’s multi-decade high. The benchmark 10-year JGB yield also eased lower and remains rangebound.
Commodities
Gold’s strong rebound following Friday’s historic slump continues, with prices back above USD 5,000, supported by fresh dip buying amid concerns over technology stock valuations and continued weakness in the crypto sector. While gold has retraced more than half of its recent decline, silver’s recovery has been more subdued, with the XAUXAG ratio showing little sign of renewed silver acceleration, while premiums in China has moderated. Resistance seen around USD 90.60, the 38.2% retracement of the recent slump.
Platinum’s inferior liquidity triggered a dramatic correction, with prices retracing 50% of the USD 2,000 rally from last April before staging a comeback. The episode clearly highlights the risks that emerge when liquidity momentarily disappears.
Oil prices rose for a second consecutive day, with Brent trading near USD 68, as geopolitical tensions resurfaced after the US downed an Iranian drone near an American aircraft carrier. Ahead of today’s EIA inventory report, the API said crude stockpiles fell by 11 million barrels last week, the largest draw since June.
HG copper is holding above USD 6, supported by renewed investor interest and reports that China, the world’s largest consumer, plans to expand its strategic copper inventories.
Currencies
The US dollar weakened Tuesday and in the Asian session Wednesday, with EURUSD rebounding back above 1.1830 after the recent 1.1776 low, GBPUSD back near 1.3720 after a 1.3651 low Monday and AUDUSD back above 0.7030 after a 0.6909 low, perhaps on strong AUDNZD flows as New Zealand reported higher unemployment than expected, sending NZD lower.
The JPY was weaker than a weak US dollar, with USDJPY rising above 156.25 on anticipation that this weekend’s Japanese election will deliver a majority to the LDP and more pressure on the yen.
