General Market News

SpaceX and xAI have established a share exchange ratio of 0.1433, allowing xAI investors to convert their holdings into SpaceX stock. Some xAI executives may choose cash payments of $75.46 per share instead of equity. This deal facilitates cross-investment between two of Elon Musk's major ventures.

• xAI investors will receive 0.1433 shares of SpaceX for each xAI share they hold
• xAI executives have the option to receive $75.46 cash per share rather than SpaceX stock
• The arrangement enables value transfer between Musk's aerospace and artificial intelligence companies

The U.S. and India reached a trade agreement in which India will increase purchases of American goods and stop buying Russian oil, while the U.S. will lower reciprocal tariffs on India. U.S. stock markets rose on Monday despite continued losses in precious metals like gold and silver, with the S&P 500 gaining 0.54% and Nasdaq climbing 0.56%. The deal marks a significant shift in trade relations between the world's largest economy and most populous nation.

• Elon Musk announced SpaceX is acquiring xAI, with the combined company preparing for an IPO valued at $1.25 trillion according to Bloomberg
• Bitcoin fell below $80,000 over the weekend for the first time since April 2025, down about 12% over seven days due partly to forced liquidations
• Spot gold and silver extended losses on Monday, while bitcoin proxy MicroStrategy dropped 6.7% amid the precious metals rout

President Donald Trump stated that the criminal investigation into Federal Reserve Chairman Jerome Powell should continue, despite Republican Senator Thom Tillis threatening to block Trump's Fed chair nominee Kevin Warsh until the probe is resolved. The unprecedented investigation, led by U.S. Attorney Jeanine Pirro, focuses on the Fed's multibillion-dollar headquarters renovation, with Powell's term ending in May.

• Sen. Thom Tillis (R-N.C.) announced he will oppose any new Fed nominee until the Powell investigation is fully resolved, potentially creating a Banking Committee stalemate that could block Kevin Warsh's confirmation.
• Trump suggested the Fed headquarters renovation involves 'either gross incompetence or theft of some kind, kickbacks,' while Powell has accused the administration of threatening prosecution due to the Fed's independent rate-setting decisions.
• The investigation involves grand jury subpoenas that the Fed has not yet fully complied with, according to reports, marking an unprecedented criminal probe of a sitting central bank chairman.

Larry Kudlow defends President Trump's tariff policies in response to a Wall Street Journal op-ed by Trump, arguing the tariffs have been economically successful rather than harmful. Kudlow claims the tariffs prompted trade deals instead of retaliation, helped reduce the budget deficit by 27 percent, and contributed to economic growth. He frames Trump's approach as a successful combination of trade reciprocity and national security strategy.

• Trump's effective tariffs averaged around 15 percent, far below the 60-70 percent Smoot-Hawley levels, and generated deals with China, EU, UK, Japan and Southeast Asian countries rather than trade retaliation
• A Harvard Business School study cited shows foreign producers and non-American corporations are paying at least 80 percent of tariff costs, while the levies helped lower the budget deficit by 27 percent
• Tariffs served as a diplomatic tool, with recent example of India agreeing to stop buying Russian oil in exchange for reduced U.S. tariff rates from 25 percent

Elon Musk is reportedly combining SpaceX, his rocket manufacturing company, with xAI, his artificial intelligence startup, ahead of a potential IPO. The move was reported by sources familiar with the matter, though details remain limited as this is breaking news.

• The combination involves merging SpaceX's established rocket manufacturing business with Musk's AI startup xAI
• The integration is reportedly happening in preparation for a potential initial public offering
• This represents a consolidation of two major Musk ventures spanning aerospace and artificial intelligence sectors

Elon Musk plans to merge SpaceX with his AI startup xAI at a combined valuation of $1.25 trillion ahead of a planned IPO later this year, according to Bloomberg News. The deal, announced in a memo, would consolidate Musk's rockets, Starlink satellites, X social media platform, and Grok AI chatbot under one company. SpaceX is currently the world's most valuable private company at $800 billion.

• The combined entity is expected to go public later in 2026 with a valuation likely exceeding $1 trillion
• SpaceX was valued at $800 billion in its most recent private funding round before the merger announcement
• The merger consolidates multiple Musk ventures including space operations, satellite internet, social media, and artificial intelligence capabilities

Bitcoin investors liquidated $2.56 billion in positions following a broader sell-off in risk assets, with bitcoin dropping 6% on Saturday to trade around $78,396. The decline was triggered by concerns about AI spending after disappointing Microsoft Azure results and a precious metals sell-off sparked by Trump's nomination of Kevin Warsh as Fed chair.

• Bitcoin fell from a record high above $126,000 to as low as $104,783 during October 10-11, currently trading around $78,396 after Saturday's 6% drop
• Microsoft's Azure cloud revenue growth only slightly exceeded expectations, raising concerns about AI spending and impacting broader risk sentiment
• Gold recorded its steepest daily fall since 1983 and silver its largest drop following Warsh's Fed nomination, which markets interpret as leaning hawkish with expected rate cuts and tighter balance-sheet policy

New York Attorney General Letitia James issued a warning to consumers about prediction markets like Polymarket and Kalshi ahead of Super Bowl 60, stating these platforms offer trades that 'masquerade' as bets without proper regulatory oversight. James highlighted that these unregulated markets lack consumer protections and supervision from the New York Gaming Commission, with billions of dollars expected to be wagered on Super Bowl-related outcomes.

• Prediction markets are susceptible to insider trading and operate without the consumer protections available on regulated gambling platforms
• Billions of dollars in trading volume are expected on platforms like Kalshi and Polymarket for Super Bowl 60, covering both game events and predetermined outcomes like which companies will advertise
• The AG warned about concerns regarding prohibitions against insider betting and the lack of regulatory review to ensure financial stability and integrity of these gambling operators

U.S. banks anticipate stronger business loan demand throughout 2026, driven by expectations of lower interest rates and increased spending needs, according to a Federal Reserve survey released Monday. Business loan demand from large and medium firms already rose in Q4 2025, while household loan demand weakened except for credit cards. Banks generally tightened lending standards in Q4 but do not expect further tightening this year.

• Business loan demand from large and medium-sized firms increased in Q4 2025, while demand from small firms remained flat
• Banks reported they are more likely to lend to firms with high exposure to artificial intelligence
• The Fed held its benchmark rate at 3.50%-3.75% last week and signaled rates will likely remain stable due to higher-than-optimal inflation and stabilizing labor markets

The Bureau of Labor Statistics postponed the January 2026 jobs report, originally scheduled for February 6, due to an ongoing government shutdown. While data collection is complete, the report cannot be released until federal funding resumes, following a congressional standoff over Department of Homeland Security funding and Immigration and Customs Enforcement restrictions.

• The delayed report will provide critical data on the US labor market after 2025 saw the weakest job growth since 2020, with only 584,000 jobs added compared to 2 million in 2024
• The BLS has already faced significant disruptions from a 43-day shutdown in October-November, the longest federal government shutdown in US history
• The current shutdown stems from Democratic senators demanding restrictions on ICE agents following killings of two US citizens by federal agents last month

The partial government shutdown that began Saturday will delay the release of the January jobs report, originally scheduled for Friday. The Bureau of Labor Statistics announced the report will be rescheduled once government funding is restored, as nonessential workers responsible for gathering data and compiling economic reports are furloughed during shutdowns.

• The BLS will resume normal operations and update its release calendar once funding is restored
• A previous 43-day government shutdown from October 1 to mid-November also disrupted economic data releases
• Federal agencies furlough nonessential workers during shutdowns, impacting those tasked with gathering data and compiling monthly economic reports

The Bureau of Labor Statistics announced it will not release the January 2026 jobs report as scheduled on Friday, February 6, 2026, due to the ongoing partial government shutdown. The report will be rescheduled once government funding resumes, creating uncertainty for markets and policymakers who rely on this key economic indicator.

• The January employment situation report, typically released on the first Friday of each month, has been postponed indefinitely pending resolution of the government shutdown
• BLS Associate Commissioner Emily Liddel confirmed the delay in an official statement, with no specific rescheduled date provided
• The delay impacts a critical economic data release that investors, the Federal Reserve, and businesses use to assess labor market conditions and inform decision-making

Elon Musk is reportedly in advanced talks to merge SpaceX with his AI firm xAI, with an announcement potentially coming this week. The merger would combine SpaceX's rocket capabilities with xAI's artificial intelligence operations, though negotiations could still fall apart. The deal would impact SpaceX's reported plans for a mid-June IPO.

• xAI was valued at $200 billion in a fall fundraising round, while SpaceX is seeking to raise $50 billion at a $1.5 trillion valuation
• Musk aims to launch AI data centers into space, requiring SpaceX's rocket technology and significant capital investment to handle growing AI data demands
• SpaceX recently asked the FCC for permission to deploy satellites into orbit to support AI infrastructure, citing cost and energy efficiency benefits over terrestrial data centers

Gold and silver prices recovered modestly after historic Friday sell-offs, while bitcoin tested its lowest level since Trump's election. Despite the pullback, Deutsche Bank maintains a $6,000 per ounce gold target, citing ongoing institutional diversification away from dollar assets and continued central bank accumulation, contrasting this situation with prior long-term tops in 1980 and 2013.

• Gold futures rose 0.9% to $4,786 Monday after peaking at $5,613 Thursday; silver bounced 4.5% to $82.09 from a peak above $121, with both metals still up 9% and 15% year-to-date respectively
• Trump's nomination of Kevin Warsh as Fed chairman initially pressured precious metals, but Deutsche Bank views his policy stance as 'less hawkish than first impressions' and notes current conditions differ from past sell-offs with dollar depreciation expected
• Bitcoin fell to $74,675 (lowest since Trump's election) while Strategy (MSTR) stock dropped 4.5% to 143.03, facing potential exclusion from MSCI indexes and diminishing firepower for bitcoin purchases as its stock premium narrows

US stock markets opened lower on Monday, with the S&P 500 down 0.3% and the Dow falling 143 points, pressured by technology sector weakness and ongoing volatility in cryptocurrencies and precious metals. Bitcoin's drop below $80,000 for the first time since April and dramatic selloffs in gold and silver reinforced a broader risk-off mood across markets.

• Silver plunged approximately 30% on Friday in its worst single-day decline since 1980, while gold dropped roughly 9%; both metals remained down over 3% on Monday despite modest rebounds
• Over 100 S&P 500 companies are set to report earnings this week, including Amazon and Alphabet, with overall earnings growth tracking toward the strongest performance in four years
• Political uncertainty increased as the federal government entered a partial shutdown over the weekend, and President Trump's nomination of Kevin Warsh as Fed chair added monetary policy concerns

JPMorgan has reaffirmed its overweight position on emerging markets and eurozone equities, citing strong earnings momentum, contained inflation, and a weakening US dollar as key drivers. The bank's February 2026 strategy report highlights resilient economic activity and broadening earnings delivery across markets. This positioning reflects a favorable risk environment despite ongoing geopolitical tensions.

• Fourth-quarter earnings results have been encouraging with leading indicators pointing to further improvement, while inflation is expected to remain well-behaved despite higher commodity prices
• The US dollar is expected to continue its depreciation path, which typically favors equities, particularly in emerging markets where JPMorgan maintains a bullish stance
• Eurozone equities have reached new highs since early October, with JPMorgan reaffirming the overweight upgrade made in Q4 2025 as market leadership broadens to cyclical stocks and value plays

One month into 2026, AI stock performance has shifted significantly from 2025, with hardware outperforming software amid concerns about an AI bubble and upcoming earnings reports from major players like Palantir, Amazon, and Nvidia. Software stocks face pressure from worries that AI companies like OpenAI will emerge as competitors, while semiconductor stocks show mixed performance as demand shifts from AI model training to inferencing applications.

• Hardware stocks are outperforming software, with memory chip makers like Micron surging 45% in January 2026 on improved pricing, while software leaders like Palantir (-18%), Oracle (-15%), and Salesforce (-12%) have retreated significantly
• The AI accelerator market is shifting from training AI models to 'inferencing' (running AI applications), with Nvidia potentially in a trading range until next-generation 'Vera Rubin' chips ramp up production
• Investor concerns about an AI bubble center on massive debt for data center buildouts, infrastructure depreciation impacts on earnings, loan securitization, ecosystem 'circularity,' and U.S. electrical grid capacity lagging China's amid power-hungry data center expansion

Family offices managing ultra-wealthy families' investments are prioritizing protection against inflation and interest rate risks in 2025, with over 60% of U.S. family offices citing these as top portfolio concerns according to a J.P. Morgan Private Bank survey. The survey covered 333 single-family offices with average net worth of $1.6 billion. To hedge against inflation, these offices are increasing allocations to real estate and alternative investments, particularly private equity and hedge funds.

• Family offices concerned about inflation hold 60% of portfolios in alternatives with twice the exposure to real estate and hedge funds compared to others
• U.S. family offices allocate 40% to public equities and 34% to private investments including private equity, venture capital, private credit and real estate
• AI remains the top investment theme with 65% citing it as part of their portfolio, while 72% have no gold exposure despite retail investors favoring it as an inflation hedge

US stock futures trimmed earlier losses on February 2, 2026, as a commodities meltdown eased following sharp declines in gold, silver, oil, and other materials. The Dow futures fell less than 0.1% while S&P 500 and Nasdaq 100 futures dropped 0.4% and 0.7% respectively, ahead of major earnings reports and the nomination of Kevin Warsh as Fed chair.

• Gold plunged from near $5,600/oz last Thursday to lows of $4,400/oz before stabilizing at $4,775/oz (down 2.3%), while silver dropped from above $120/oz to below $72/oz and WTI crude fell 4.5% to $62.22/barrel
• Kevin Warsh's nomination as Fed chair sent 'shockwaves' through markets, signaling an end to easy money policies and raising concerns about reduced central bank intervention during future market stress
• Major earnings reports scheduled include AMD, Merck, PepsiCo, and Pfizer on Tuesday; Google, Eli Lilly, and Qualcomm on Wednesday; and Amazon on Thursday, with Friday's jobs report closing the week

The article identifies three warning signs suggesting the stock market may be in an AI bubble, despite tech stocks like the Nasdaq-100 gaining 117% over three years. Major tech companies are spending hundreds of billions on AI infrastructure, engaging in complex financing deals, while actual monetization and return on investment remain uncertain.

• Big tech firms spent hundreds of billions on AI capital expenditures last year, with OpenAI planning $1.4 trillion in spending over eight years despite only $20 billion in annualized revenue
• Companies are using unusual financial engineering including off-balance-sheet debt deals (Meta's $27 billion arrangement with Blue Owl Capital) and 'circular financing' arrangements that create risky interconnectedness
• Only 3% of AI users pay for premium services, raising doubts about adequate returns on massive infrastructure investments and whether AI will deliver transformative benefits comparable to previous innovations like PCs or cloud computing