General Market News

A Federal Reserve Bank of Kansas City analysis found that tariffs implemented in 2025 may have cost the U.S. economy approximately 19,000 jobs per month from January to August. Employment growth slowed significantly from 170,000 jobs per month in 2024 to only 75,000 per month through August 2025, prompting the Fed to cut interest rates three times.

• Sectors with greater exposure to tariffs experienced larger declines in job growth compared to less-exposed industries
• The analysis estimates tariffs may have increased the unemployment rate by 0.1 percentage points, with the December 2024 rate at 4.2%
• Economists noted that tariff effects are occurring alongside other workforce factors including AI emergence, aging population, and reduced immigration

Elon Musk's SpaceX and xAI are in merger discussions ahead of a planned IPO later in 2026, aiming to combine satellite infrastructure with AI computing capabilities. The strategic goal is to launch orbital data centers that Musk claims will become cost-competitive with ground-based AI compute within two to three years. No final agreement has been reached, with key terms like valuation, timing, and structure still undecided.

• SpaceX was valued at roughly $800 billion in a recent insider transaction, making this potentially Musk's largest corporate consolidation after previous moves like folding X into xAI in 2025 and Tesla's 2016 SolarCity acquisition
• xAI already holds a Pentagon contract valued at up to $200 million to provide Grok AI products to the Defense Department, with integration planned as part of the military's 'AI acceleration strategy'
• Two Nevada entities were established on January 21 to facilitate the transaction, with SpaceX CFO Bret Johnsen listed as managing member, though regulatory approval and defense contracting reviews may delay the deal

Meta and Microsoft both significantly exceeded AI infrastructure spending expectations last quarter, contributing to projected Big Tech spending of $500-700 billion in 2026. However, investor reactions diverged sharply: Meta's stock soared on strong revenue growth (24% ad revenue increase) demonstrating AI monetization, while Microsoft's stock fell despite beating estimates, as Azure growth and Microsoft 365 performance disappointed investors seeking clearer AI returns.

• Meta's Q4 ad revenue grew 24% with 18% more impressions and 6% higher prices, while forecasting 33.5% revenue growth for the current quarter—its fastest rate since 2021—convincing investors that AI investments are paying off
• Microsoft's Azure grew 38% but missed Wall Street expectations, and Microsoft 365 showed only mid-teen growth despite AI Copilot rollout, making its 66% year-over-year capex increase harder to justify
• The five hyperscalers (Microsoft, Meta, Alphabet, Amazon, Oracle) are expected to spend $500-700 billion on AI infrastructure in 2026, fueling growth for hardware companies like Nvidia, Broadcom, and ASML

Initial unemployment claims fell slightly to 209,000 for the week ending January 24, down 1,000 from the previous week's revised 210,000 figure. Despite low jobless claims signaling stability, growing worker uncertainty is affecting consumer spending, particularly among the 60 million Labor Economy workers earning under $25 per hour who represent 15% of total consumer spending.

• The 4-week moving average for jobless claims increased to 206,250, up 2,250 from the previous week's revised average, with data potentially affected by Martin Luther King Jr. Day and severe winter storms
• Labor Economy workers' personal job security sentiment dropped 6.7 points in November to 75.2 on a 100-point scale, marking the most negatively impacted dimension in consumer sentiment
• Growing uncertainty about steady hours and pay is causing workers to delay purchases, trade down to cheaper options, and reduce discretionary spending even before actual job losses occur

Tech stocks plunged on January 29, 2026, with the software sector entering bear market territory after falling 22% from recent highs. Microsoft's 12% drop—its worst session since March 2020—triggered broad selling across AI-related stocks after the company issued weak guidance on operating margins and slowing cloud growth. The Nasdaq Composite fell 1.62% to test its critical 50-day moving average at 23,312, just one day after approaching record highs.

• Microsoft's weak guidance on fiscal Q3 operating margins and slowing Q2 cloud growth sparked investor exodus, pressuring other 'Magnificent Seven' and AI-related stocks including Nvidia and AMD
• The software sector ETF dropped 22% below recent peaks, officially entering bear market territory amid heightened investor focus on forward guidance rather than historical results
• Nasdaq technical breakdown sees index falling from near-record highs to test 50-day moving average at 23,312; recovery above 23,962 needed to restore uptrend, otherwise further decline likely

The first week of February 2026 will feature earnings reports from major companies including Alphabet, Amazon, Eli Lilly, PepsiCo, PayPal, Pfizer, Qualcomm, and Disney, alongside key economic data releases. The week's economic calendar is relatively light but will focus heavily on employment data toward the end of the week. This convergence of big-name earnings and jobs reports will provide important indicators for market direction.

• Major earnings reports scheduled from tech giants (Alphabet, Amazon), healthcare companies (Eli Lilly, Pfizer), and consumer brands (PepsiCo, Disney) throughout the week
• Employment data will dominate the economic calendar with job openings (Feb 3), ADP employment (Feb 4), weekly jobless claims (Feb 5), and the full employment report with hourly wages (Feb 6)
• Additional economic indicators include ISM manufacturing and services indexes, consumer sentiment, and consumer credit data spread across the week

U.S. factory orders rose 2.7% in November, exceeding expectations of 1.6%, driven primarily by a 97.6% surge in commercial aircraft demand. The rebound follows a revised 1.2% decline in October, though indicators suggest business equipment spending growth moderated in Q4. Manufacturing faces headwinds from Trump's import tariffs but shows cautious optimism for 2026 improvement.

• Commercial aircraft orders soared 97.6% in November, with additional gains in electrical equipment, fabricated metal products, and machinery orders up 0.3%
• Core capital goods orders (non-defense excluding aircraft) were revised down to 0.4% growth from initially reported 0.7%, signaling slower business equipment investment
• Manufacturing accounts for 10.1% of the economy and faces pressure from import tariffs, though AI boom and new tax legislation with permanent bonus depreciation may support recovery in 2026

US jobless claims fell by 1,000 to 209,000 for the week ended January 24, remaining near historically low levels despite high-profile corporate layoffs. The labor market shows resilience with continuing claims dropping to 1.83 million, the lowest since September 2024, though hiring has slowed amid economic uncertainty over tariffs, AI adoption, and policy shifts.

• The four-week moving average of claims rose to 206,250, while continuing claims fell 38,000 to 1.83 million, suggesting layoffs remain limited even as firms like Amazon and UPS announce job cuts
• The Federal Reserve held interest rates steady at 3.50%-3.75%, with Chair Jerome Powell noting labor market conditions may be stabilizing after gradual softening
• Unemployment rate stood at 4.4% in December, but hiring intentions have weakened according to Conference Board measures, with consumer sentiment about job prospects deteriorating amid policy and technology concerns

US stocks opened mixed on Thursday as investors weighed major tech earnings against the Federal Reserve's decision to hold interest rates steady at 3.5%-3.75%. The S&P 500 edged up 0.1% but remained below 7,000, while divergent Big Tech results created sector volatility amid political concerns over Fed independence and geopolitical tensions with Iran.

• Meta Platforms surged 9% on strong advertising revenue and AI investment guidance, while Microsoft dropped sharply after reporting slowed cloud growth and softer operating margin guidance for Q3
• The Fed maintained rates with two governors dissenting in favor of cuts; markets now price in two quarter-point cuts by end of 2026, but expect rates to hold steady through Powell's May term conclusion
• Political risks emerged from a DOJ investigation involving Fed Chair Powell and efforts to remove Governor Lisa Cook, raising concerns about central bank independence alongside potential US strikes against Iran

Blackstone executives identified AI development as the largest driver of U.S. economic growth, with significant implications for private capital markets. The buildout of AI infrastructure, including semiconductor plants and data centers, requires massive amounts of private debt capital for construction, creating substantial opportunities for alternative asset managers.

• Blackstone's president and COO Jon Gray emphasized that AI infrastructure construction demands extensive private debt financing
• The investment opportunity spans semiconductor fabrication facilities and data centers needed to support AI development
• Private capital groups like Blackstone are positioned to benefit from the large-scale capital requirements of AI infrastructure buildout

President Trump publicly criticized Federal Reserve Chairman Jerome Powell as a 'moron' after the Fed held interest rates steady, escalating tensions between the White House and the central bank. Trump argued rates should be substantially lower and accused Powell of costing America hundreds of billions in unnecessary interest expenses. The confrontation marks the most challenging period of Powell's eight-year tenure, compounded by a Justice Department investigation into his congressional testimony.

• Trump claims Powell is harming national security and that the U.S. should have the 'lowest interest rate of any country in the world' due to tariff revenue inflows
• The Justice Department opened an investigation into Powell earlier this month regarding his congressional testimony about the Fed's building renovations, which Powell called 'unprecedented'
• Tensions escalate as the Supreme Court weighs Trump's authority to remove Fed Governor Lisa Cook and the White House considers a successor to Powell

The U.S. dollar has fallen to near four-year lows due to policy uncertainty, political polarization, and yen strength driven by intervention speculation. The decline reflects investor concerns over Federal Reserve independence, widening budget deficits, and erratic Washington policymaking including threats of government shutdown. This currency shift creates investment opportunities in inverse dollar ETFs, commodities, emerging markets, and digital currencies.

• The yen strengthened significantly, with Invesco CurrencyShares Japanese Yen (FXY) gaining 3.8% over the past week while the Invesco DB US Dollar Index Bullish Fund (UUP) lost 2.6%
• Dollar weakness is boosting commodities and real assets, with SPDR Gold (GLD) up 19.5% year-to-date and broader commodities tracking funds gaining about 10%
• De-dollarization trends favor emerging markets and digital currencies, with Pacer Emerging Markets ETF (ECOW) up 8.5% and Global X Blockchain ETF (BKCH) up 15.5% year-to-date

US stock futures pointed to a flat open on Thursday as investors processed mixed earnings from major tech companies and the Federal Reserve's decision to hold interest rates steady. The previous session saw minimal movement across major indices, with the S&P 500 briefly crossing 7,000 for the first time before finishing lower. Gold surged 4.9% in its best day since early COVID-19 pandemic.

• The Fed held rates steady with 'broad support' among policymakers after three cuts last year, with only two members voting for an immediate reduction
• After-hours earnings showed Microsoft's slowing cloud momentum, Meta's record revenues easing AI investment concerns, and Tesla pivoting focus to AI and robotics including its humanoid Optimus project
• Gold posted its strongest single-day gain since early 2020, rising 4.9% Wednesday and climbing another 2.4% in Asian trading to nearly $5,600 per ounce before retreating

Cryptocurrency exchange ByBit is launching banking services called 'MyBank' next month, allowing its 81 million customers to hold fiat currency balances in accounts with IBANs and transfer 18 currencies. This move reverses the typical neobank trajectory, as ByBit expands from crypto trading into traditional banking rather than the other way around.

• MyBank accounts will support 18 fiat currencies with IBAN functionality, enabling instant conversion to crypto upon deposit, pending regulatory approval for February 2026 launch
• ByBit is one of the world's largest crypto exchanges by trading volume, active in 200+ markets with partnerships across nearly 2,000 banks
• The company suffered a $1.5 billion hack in early 2025 (accounting for nearly half of all crypto thefts through September) and had to borrow from other platforms to reimburse customers

The Federal Reserve held interest rates steady as expected, with Chair Jerome Powell describing the economy as on 'solid ground' during his press conference. Meta exceeded earnings expectations despite Reality Labs losses widening to $6.02 billion, while Microsoft tumbled 7% on cooling cloud growth. Treasury Secretary Scott Bessent denied U.S. dollar intervention plans after the dollar index hit multiyear lows.

• Two Fed governors (Stephen Miran and Christopher Waller) dissented and pushed for a quarter-point rate cut, while Powell avoided commenting on the ongoing criminal probe into his congressional testimony
• Tesla posted mixed Q4 results and announced it will discontinue Model S and X production to focus on Optimus humanoid robots, while planning to invest around $2 billion in Musk's xAI startup
• The U.S. dollar index has fallen over 10% in the past 12 months, prompting Treasury Secretary Bessent to clarify that the U.S. would 'absolutely not' intervene in currency markets despite recent volatility

Ukraine's central bank reduced its key interest rate from 15.5% to 15% on January 29, citing slowing inflation (8% year-on-year in December) and greater certainty over international financial aid. This marks the beginning of an easing cycle after rates remained steady throughout most of 2025, though energy sector damage from Russian attacks continues to constrain economic prospects.

• The rate cut aims to support lending growth, which has expanded over 30% year-on-year, helping the economy adapt to wartime challenges
• Ukraine's GDP is projected to grow just 1.8% in 2026, matching 2025's pace, with the energy deficit from Russian bombardments restraining business activity
• Foreign reserves reached a record $57.3 billion and are expected to hit $65 billion by year-end, supported by 90 billion euros in EU aid planned over 2026-2027 and potential $8.1 billion IMF program

Global markets are holding steady as investors digest mixed megacap tech earnings, a Federal Reserve rate hold, and escalating U.S.-Iran tensions. Meta shares surged 10% on strong earnings and massive AI spending plans, while Microsoft disappointed on cloud results. Oil prices jumped and gold neared record highs as President Trump threatened Iran with strikes over its nuclear program.

• Meta stock rose 10% after announcing a 73% capital spending increase to $135 billion in 2026, while Microsoft fell on disappointing cloud computing results, highlighting divergent investor reactions to AI spending
• The Federal Reserve held rates unchanged with Chair Jerome Powell indicating no rate cuts until mid-year and sidestepping questions about his future and the Trump administration's criminal probe
• Oil prices climbed and gold approached $5,600 per ounce as Trump threatened military strikes against Iran if no nuclear deal is reached, with Tehran vowing to retaliate 'like never before'

The Motley Fool podcast discusses how analyzing a company's workforce—its largest expense—can provide valuable investment insights. Dr. Ben Zweig, CEO of Revelio Labs, explains how employee data including hiring patterns, attrition rates, and job postings can reveal strategic shifts before they're publicly announced. The discussion also covers the changing composition of the S&P 500, Social Security's projected 2032 trust fund depletion, and inflation concerns for essential goods.

• Since 1985, 20% of S&P 500 constituents turn over every five years on average, with company lifespans in the index dropping from 29.3 years in the 1970s to 18.3 years in the 2020s
• Social Security's trust fund could be depleted by 2032 (earlier than expected), potentially triggering a 20-25% benefit cut without reforms combining higher taxes, later claiming ages, or benefit formula changes
• Four key workforce data points for investors: employee profiles (hiring/attrition patterns), job postings (forward-looking hiring plans), employee perception (insider sentiment), and salary benchmarks (bargaining power indicators)

Indonesia's stock market plunged as much as 16.7% over two days after MSCI warned of a possible downgrade from emerging market to frontier market status due to concerns about opaque free float data and foreign ownership limits. MSCI, whose indices track $10 trillion in stocks, has given Indonesia until May to show progress. Goldman Sachs estimates foreign outflows could reach $7.8 billion if the downgrade occurs.

• MSCI cited client concerns about unclear data on Indonesian companies' free float percentages and foreign ownership limits, threatening Indonesia's 1% weighting in its emerging markets index
• Indonesia has until May to demonstrate progress; authorities proposed measures including doubling the free float requirement for listed firms to 15%
• The Indonesian government previously penalized JPMorgan Chase in 2015 and 2017 for issuing negative ratings on its bonds and stocks

U.S. Treasury yields rose Thursday following the Federal Reserve's decision to hold interest rates steady at 3.5%-3.75% at its January meeting. The 10-year Treasury yield increased to 4.267% as investors assessed the Fed's pause after three rate cuts in late 2025, with the central bank navigating questions about its independence while awaiting new leadership.

• The 10-year Treasury yield rose over one basis point to 4.267%, while the 30-year yield increased about three basis points to 4.89%
• Governor Waller dissented by calling for a 25-basis-point cut, though analysts say dissenting votes do not threaten Fed independence as a stable majority remains insulated from political pressure
• Julius Baer expects a cumulative 50-basis-point rate cut in the first half of 2026 due to labor-market weakness, more than markets currently price in, and maintains a slight overweight stance on U.S. fixed income