Investment Update February 3, 2026

Last Week on Wall Street

Economic news for the week included the Fed keeping policy short-term interest rates steady. On the positive side, durable orders rose, as did housing prices to a lesser degree, while consumer confidence fell back sharply and producer prices rose more than expected.

Equities were mixed globally last week, with foreign outperforming U.S. Bonds were little-changed in the U.S., but some foreign were helped by a weaker U.S. dollar. Commodities were also mixed, with energy prices rebounding up, while precious metals fell back from recent strength.

U.S. stocks were mixed last week, with major large cap indexes moving in different directions, but weaker results from small caps. A potential government shutdown on Jan. 31 was in the news again, despite appearing as a non-issue for several weeks. By the end of the week, early optimism about the Warsh Fed Chair nomination had been replaced by some angst over potential Congressional delays in the process.

Sector results were also split last week, with strong gains in communications, energy, and utilities, offset by declines in health care, consumer discretionary, and materials. On the positive side, Meta fared especially well after solid earnings performance, which put off some worries about further massive AI spending. Microsoft, however, was down on Thursday on a slowdown in cloud computing growth as well as rising concerns about payback of high AI spending. This was accompanied by potential AI disruptions into the software sector’s profitable software-as-a-service business model generally. This AI reversal more recently has also carried into data center investments of real estate and commodities. In healthcare specifically, UnitedHealth fell by -20% early in the week due to forecasted revenue pressures, specifically, far lower than expected Medicare Advantage rate increases. Consumer discretionary stocks were held back by declines in Tesla and a variety of retailers, including Starbucks and Nike.

Earnings reports for S&P 500 companies continue for Q4, with a third of firms now having reported, per FactSet. The blended year-over-year growth rate has ticked up by nearly 3% to 11.9%, albeit with a lot more to go. Leadership continues to come from technology and industrials, the size of which more than offset negative earnings growth from health care, energy, and consumer discretionary.

Foreign stocks were mixed, with gains in Japan, the U.K., and Europe, in addition to a positive week in emerging markets. While returns in local terms were mixed, much of the gain came from the tailwind of the U.S. dollar declining for the week overall. European GDP growth came in at a positive 1.5% for 2025, a half-percent stronger than the prior year, and, along with stronger more recent data and earnings, helped buoy sentiment. Countries within emerging markets were similarly mixed, with strength in Turkey and South Korea, but weakness in Taiwan and South Africa.

Bonds were minimally changed with a bit of a twist in the U.S. Treasury yield curve, with short-term rates down and long-term rates up. Senior floating rate bank loans fell back. Foreign unhedged bonds were helped upward a bit by a weaker dollar.

Commodities were mixed last week, with energy seeing gains, while precious metals pulled back sharply after a strong run. Crude oil prices jumped 7% last week to $66/barrel, due to continued high tensions between the U.S. and Iran, in addition to China appearing to take the opportunity of low prices to increase domestic stockpiles. Natural gas prices spiked another 20% with weather-related effects. Gold and silver prices were volatile last week. Precious metals tend to do best under uncertainty, a weaker dollar, and lower interest rates—trends which came under pressure after the Warsh announcement.

(Source LSAConnect)

Fact of the Week

Steelers head coach Mike Tomlin decided to step down after 19 years. Tomlin never had a losing season during his time with the Steelers. The only other head coach to have a longer streak was Hall of Famer Tom Landry with 21 seasons. Similarly, Tomlin’s 193 wins are the ninth-most in NFL history (source: NFL).