Market Recap - Monday February 2, 2026
Stocks Rally on Strong Manufacturing Data as AI and Cyclicals Lead
Stocks kicked off the new week on a strong note, finishing higher across all major indexes. The Dow rose 1.05%, the S&P 500 gained 0.54%, the Nasdaq added 0.56%, and small caps rebounded with the Russell 2000 up 1.02%. Trading ended near the day’s highs as investors leaned back into economically sensitive areas like banks, transports, machinery, industrial metals, and travel-related stocks. Semiconductor stocks continued their leadership streak, once again outperforming software by a wide margin. Strength also showed up in payments, department stores, casual dining, hotels, and parts of healthcare. On the weaker side were energy stocks (as oil fell), managed care, utilities, REITs, and software. Big tech was mixed, with Nvidia standing out as a notable laggard.
Markets were also influenced by sharp moves in currencies and commodities. The U.S. dollar strengthened for a second straight session, while gold and silver fell again after last week’s historic volatility, suggesting investors are still unwinding crowded positions in precious metals. Bitcoin dropped nearly 7%, sliding back below $80,000 as risk appetite cooled in parts of the crypto market. Oil prices fell almost 5% after comments from President Trump about progress in talks with Iran eased fears of immediate supply disruptions. Overall, the day reflected a shift away from defensive hedges and back toward growth and cyclical sectors tied to the economy.
Economic data gave investors more reasons to feel optimistic. The ISM Manufacturing Index jumped into expansion territory at 52.6, its highest level since mid-2022, with new orders and production showing strong improvement. This reinforced the idea that the U.S. economy remains resilient despite higher interest rates. At the same time, the Federal Reserve is now seen as slightly less likely to cut rates aggressively this year, with markets pricing in fewer cuts than they were just days ago. Lending data from banks showed tighter standards for business loans but stronger demand from large and mid-sized companies, signaling continued corporate activity even as credit conditions stay cautious.
Corporate and policy headlines were busy. Nvidia cooled expectations around a massive investment in OpenAI, though CEO Jensen Huang said the company still plans to participate in funding AI growth. Oracle announced plans to raise up to $50 billion to expand its cloud and AI infrastructure, which investors largely viewed as a sign of strong demand rather than a warning sign. Disney reported earnings that beat expectations but still slipped as investors focused on mixed outlooks for its media and sports segments. A new U.S.–India trade deal also helped sentiment, with President Trump announcing lower tariffs and expanded trade commitments between the two countries. Meanwhile, the government shutdown continued to disrupt some economic data releases, including delays to key labor market reports.
Here’s Our Take
Today’s rally shows that investors are still willing to bet on a resilient economy, especially when data like the ISM manufacturing report points to renewed momentum. The market’s leadership remains clear: semiconductors and AI-linked infrastructure continue to shine, while software and defensive sectors lag. At the same time, the pullback in gold, silver, and crypto highlights how quickly sentiment can flip when crowded trades unwind and the dollar strengthens. With key labor data delayed and earnings season still unfolding, markets are likely to stay sensitive to both economic signals and headlines around AI investment and geopolitics. For now, the tone is cautiously optimistic — but volatility remains close to the surface.
P.S. Know someone who’d appreciate smarter stock insights and clearer investing strategies? Forward this email or share this link: subscribe.triplegains.com
Triple Gains - Stock Analysis - Thematic Insights - Portfolio Strategy
DISCLAIMER: The content provided in this newsletter does not constitute investment advice, financial advice, trading advice, or any other form of personal recommendation. Nothing in this newsletter should be interpreted as a suggestion to buy, sell, or hold any investment or security. All content is for general informational purposes only and should not be relied upon for making investment decisions. Readers should conduct their own research and consult qualified financial advisors before making any investment decisions. To read our full disclaimer, click here.