In early trading hours on February 4th Beijing time, US stocks saw their losses widen during Tuesday's late session. The Dow Jones fell by over 400 points, while the Nasdaq dropped 500 points. Investors sold off technology stocks, shifting their capital towards shares more broadly linked to the economic recovery. A partial US government shutdown will prevent the January jobs report from being released as scheduled this Friday.
The Dow Jones declined by 424.41 points, or 0.86%, to 48,983.25; the Nasdaq fell by 509.28 points, or 2.16%, to 23,082.82; and the S&P 500 dropped 98.13 points, or 1.41%, to 6,878.31. The Nasdaq erased its gains for the year, turning negative. Most technology stocks trended lower, including the majority of the "Magnificent Seven" that had already reported earnings—Microsoft, Meta Platforms, and Tesla fell by 3%, 2%, and 1%, respectively. NVIDIA also declined, with this AI bellwether's 3% drop further expanding its losses for the year. Meanwhile, software stocks continued their 2026 downtrend, with shares like ServiceNow and Salesforce each falling approximately 7%. Josh Brown, CEO of Ritholtz Wealth Management, stated, "I believe we see this type of market action once or twice a year. The catalysts are always different, but the outcome is invariably similar—the most popular trades from the preceding rally get completely hammered." He pointed to Palantir Technologies giving up some of its early-session gains as an example. After Palantir reported strong fourth-quarter financial results and optimistic guidance, its stock had surged as much as 10% at Tuesday's open. Josh Brown added, "This indicates that risk appetite is retreating from all areas associated with technology." The pressure was not confined to the tech sector. Taking cryptocurrency as an example, Bitcoin fell 4%, dropping to its lowest level since November 2024. Earlier over the weekend, Bitcoin had fallen below the $80,000 mark for the first time since last April. However, bright spots remained in the market. Driven by digital business growth and new customer acquisition, Walmart's stock surged 2% on Tuesday, pushing its market capitalization above the $1 trillion mark. PepsiCo's stock rose 4% after it reported strong earnings fueled by improved organic sales in its business. Additionally, bank stocks like JPMorgan Chase and Citigroup closed higher. Bill Northey, Senior Investment Director at U.S. Bank's Asset Management Group, commented, "Revenue trends appear very solid, but there are lingering concerns on the margin around the software space, particularly the potential disintermediation risk that AI might trigger. I don't believe this story is over, but ultimately we are seeing this sentiment reflected in the market right now." A rebound in silver and gold prices provided a slight boost to market sentiment, with spot gold rising 5% on the day and spot silver climbing 6%. Trading in gold and silver has become the most popular trade among retail investors this year. Last week's sharp decline in silver sparked market concerns that a breakdown of this trade could trigger a broad shift towards a risk-off mentality among this group. This week, investors are digesting earnings reports from over 100 S&P 500 component companies. Besides Alphabet, another member of the "Magnificent Seven," Amazon, is also scheduled to report its earnings later this week. Uncertainty regarding US policy remains high. The US Bureau of Labor Statistics stated that the Non-Farm Payrolls report, originally scheduled for release on Friday, will be postponed due to the partial shutdown. The US Bureau of Labor Statistics confirmed on Monday that the January jobs report, originally set for Friday, will not be released as planned due to the partial government shutdown. Emily Liddell, Deputy Commissioner of the US Bureau of Labor Statistics, said in a statement, "The January 2026 Employment Situation Report will not be released as scheduled on Friday, February 6, 2026." "The report will be rescheduled for release after government funding is restored." It is currently unclear whether the Commerce Department will face report delays due to the deadlock in Washington. This decision comes during a week packed with economic data releases, which was originally supposed to culminate with the Non-Farm Payrolls report, also known as the unemployment situation report. The market had previously anticipated the report to show an addition of 55,000 jobs, with the unemployment rate holding steady at 4.4%.
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