Weekend Update, February 2nd, 2026

Index, Sector, and Asset Performance

Every weekend in 2026 has brought a surprise event, and last weekend was the news of potentially more tariffs on longtime allies. The S&P 500 hit another all-time high but has showed signs of fatigue since late last October when technology stocks, ex-semiconductors, started to give up their leadership role. With the bond markets sniffing out slowing growth and rising inflation, the momentum trade has waned as investors rotated instead of outright exiting the markets.

US equities posted a gain last week, with the S&P 500 up +0.3%, at 6940, helped by earnings and a stable macro. The Federal Reserve left rates unchanged and avoided hawkish notes, reinforcing that policy is on hold while keeping open to cuts later in 2026. YTD performance has the S&P 500 +1.4%, led by Energy up +14.2%, Materials up +8.64%, Consumer Staples up +7.51% and Industrials up +6.65%. The laggards YTD are Financials -2.43%, Technology -0.06% and HealthCare -0.04% after January.

Last week energy outperformed on Iran tensions and an end of week Fed Chairman nomination of a priorly hawkish contender, leading to a dollar short squeeze, gold, silver and copper mining stocks cratering, and investors rotating from U.S. to foreign equities and shifted from high beta to yield/value stocks. January finished with a positive return making it 7 months out of the last 8 that we ended with a gain. We are in the 10th month of the rally off April 4th 2025 Tariff lows and the market historically has churned at best for 2-4 months and more often dropped 5-8% over the next few months.

Source: Bloomberg

The continued rise in real-time inflation expectations finally caught up with micro-cap, small cap and other mid-cap names that had been leading in the 4q25 through the 1st half of January.

Source: Bloomberg

Communication services had the largest percentage gain last week, climbing +4.2%, followed by a +3.9% increase in energy and a +1.7% in utilities. Consumer staples, financials, industrials, real estate and financials also rose. Verizon Communications (VZ) and AT&T (T) led gains in communication services as they reported Q4 adjusted earnings per share and revenue above analysts’ expectations on new I-phone sales. Verizon’s shares jumped +13% on the week while AT&T climbed +11%.

The advance in energy came as crude oil futures reached a four-month high this week amid geopolitical tensions. Chevron (CVX) and Exxon Mobil (XOM) were among the best performers as with better-than-expected fourth-quarter results amid higher oil output. Chevron’s shares rose +6.1% on the week while Exxon Mobil added +4.8%.

Healthcare had the largest percentage loss last week, dropping -1.7%, followed by a -1.4% decline in consumer discretionary and a -1.2% decrease in materials. Technology fell. UnitedHealth Group (UNH) was among the health care sector’s hardest-hit stocks, tumbling 19% amid mixed fourth-quarter results. The company’s earnings topped market expectations but revenue fell short of estimates, and the insurance company forecast 2026 revenue below expectations.

Economic Indicators and Earnings Commentary

The Fed held steady rates on Wednesday at 3.5-3.75%, citing stable labor markets and steady inflation. There was no suggestion that more rate cuts would come soon, as the Fed will remain data dependent. President Donald Trump’s chose Kevin Warsh, who served as a governor on the central bank’s board from 2006 to 2011, as head of the Federal Reserve. Before joining the Fed. Warsh was part of the George W. Bush White House and had worked at Morgan Stanley.

The key economic data release this week are S&P Global Manufacturing PMI, ISM Manufacturing PMI, and ISM Manufacturing Prices hit Monday, followed by JOLTS job openings on Tuesday. Wednesday brings ADP private payrolls plus S&P Global Services and Composite PMI readings. Initial jobless claims are announced Thursday, and Nonfarm Payrolls and the unemployment rate on Friday.

Earnings reports expected this week are extensive with technology, autos, consumer goods, defense, financials, energy, real estate, and travel. This week’s earnings calendar includes Disney (DIS), Advanced Micro Devices (AMD), Merck (MRK), PepsiCo (PEP), Alphabet (GOOG, GOOGL), Eli Lilly (LLY), Amazon.com (AMZN), ConocoPhillips (COP) and Philip Morris International (PM)

Per Goldman: Consensus expects S&P 500 EPS growth of 7% year/year in 4Q 2025, but this forecast appears too conservative once again S&P 500 mid-season earnings check-in. S&P 500 4Q 2025 results have been strong, with 59% of companies beating profit expectations, and overall earnings growth tracking about +11% YTY versus roughly +7% expected at the start of the season with over half of guiding companies raising the bar and overall estimates implying about +12% growth. Mega-cap Tech firms have so far beaten sales and earnings forecasts, but share price movements have been mixed, reflecting revenue outlooks. Expectations for cloud/AI data center investment continue to rise and management commentary beyond the Tech remains heavily focused on AI.

Commodities and Currencies

Oil crossed above $63 on geopolitics and concerns over Iran. Energy stocks rallied strongly last week, with the sector up about 3.8%, as crude prices jumped on a renewed geopolitical risk premium and weather-related supply disruptions. Brent moved toward four-month highs near the low 70s, driven by escalating tensions with Iran and concerns over potential disruption through key shipping lanes, while a major US winter storm temporarily curtailed production, tightening near term balances.

Copper, gold, silver and other industrial metals got clobbered late in the week on historic reversals.

Silver tanked Friday, down- 28% on the day. Today, Monday the ongoing slaughter in Gold, at one below $4,500/oz, down -15% from last Wednesday’s high. However, year to date, silver is still up more than +17%

Crypto assets and bitcoin have been volatile since pulling back from their mid-summer $125k ATH and sit near $80k.

The US dollar was weaker until the new Fed Chair announcement last week which cause a long bond selloff and a dollar rally.

OHFG Stock Talk

1Q26 Risks – Inflation Also Rises

Per Seeking Alpha:

Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.