12:15pm: Tech stocks rebound

Tech stocks recovered on Monday but the Dow Jones slipped back below the 50,000 mark.

“It has been a quietly risk-on day for markets overall, following the Japanese election results over the weekend,” Chris Beauchamp, chief market analyst at IG, said. 

“While the Dow has failed to hold 50,000 so far today, a recovery in tech stocks suggests that the rotational trade in this bull market may be moving back in the other direction.” He added that attention is now turning to macroeconomic data this week, with a weak jobs report and inflation figures potentially supporting expectations for a dovish Federal Reserve.

Precious metals also gained ground, with gold reclaiming $5,000 after last week’s volatility. Beauchamp noted, “The rally in gold is back on following last week’s volatility… a renewed surge in gold and silver is perhaps bitcoin’s biggest threat at present, stealing the limelight from the cryptocurrency and its peers.” Meanwhile, bitcoin’s recovery stalled, underscoring the continued divergence between traditional safe-haven assets and digital currencies.

11:20am: Hims & Hers plummets

Him & Hers (NYSE:HIMS) shares fell 25% after the telehealth company announced over the weekend that it will stop offering a compounded oral version of semaglutide, the active ingredient in Novo Nordisk’s weight-loss drug Wegovy, following regulatory scrutiny and industry backlash.

The company had announced earlier last week that it would sell a compounded semaglutide pill, positioned as a lower-cost alternative to Novo’s recently launched oral formulation. 

The US Food and Drug Administration also intervened, stating it planned to take steps to restrict access to the active ingredients used in popular GLP-1 drugs such as Wegovy, Ozempic, and Zepbound, and indicated it could refer the matter to the Department of Justice.

10:40am: Week ahead

Wall Street is heading into another crowded and potentially volatile week, with investors juggling a heavy earnings calendar, a backlog of delayed US economic data and lingering nerves after a sharp risk-off move that rattled stocks and crypto.

The backdrop is eye-catching: the Dow Jones Industrial Average topped 50,000 for the first time last week. But instead of celebrating, markets are debating whether last Friday’s rebound marked a turning point or just a pause in February’s choppy trading.

Another 78 S&P 500 companies are set to report, including Dow components The Coca-Cola Company (NYSE:KO), McDonald’s Corp (NYSE:MCD, XETRA:MDO) and Cisco Systems Inc (NASDAQ:CSCO, XETRA:CIS). Results are also due from ON Semiconductor (NASDAQ:ON), Ford Motor Company (NYSE:F), AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) and Applied Materials Inc (NASDAQ:AMAT, XETRA:AP2).

Elsewhere, December retail sales are due Tuesday, followed by the delayed January jobs report on Wednesday and January CPI on Friday.

9.53am: Dow retreats as Amazon and Apple fall

Wall Street’s major stock indexes started in the red but performances were highly uneven. 

The Dow Jones was down 0.5%, retreating from Friday’s all-time high, while the S&P 500 dropped less than 0.1%.

Nasdaq was slightly on the front foot now, gaining a little under 0.1% so far.

Among the biggest names, Nvidia rose 2% and Microsoft 1.3%, but Apple fell 1.5% and Amazon dropped 2.9%. 

Apple, Amazon, IBM, Salesforce, Merck and Amgen were dragging the Dow down.

Biggest risers on the Nasdaq and S&P were Applovin, Oracle and Kroger. 

Apollo Global Management rose 5.1% after publishing earnings.  

7.35am:

US futures dropped into the red on Monday morning, reversing some of their strong relief rally gains from the end of last week, ahead of a new stack of economic data in the coming days.

Apart from consumer inflation expectations, there is no data today, but later on in the week there will be retail sales, mortgage application and January’s delayed non-farm payrolls release.

Nasdaq futures were down 0.5%, with those for the S&P 500 and Dow Jones down 0.3% and 0.2%, retreating from the highs seen at the end of last week when Wall Street had finished last week with a milestone moment.

The dollar was soft in European trade, dpown 0.55% versus the euro and 0.3% against the pound, with the DXY index down 0.4% at 97.22.

Bitcoin has recovered from the lows seen last week but was down 2.5% and still below $70K this morning.

Last week ended with the Dow surging 1,207 points, or 2.5%, to close Friday above 50,000 for the first time ever, at 50,115. 

The S&P jumped 2% to 6,932, marking its best session since last May, while the Nasdaq climbed 2.2% to 23,031, snapping back from the previous day’s sharp losses. Small caps enjoyed the sharpest gain, with the Russell 2000 rallying 3.6% to 2,670.

This followed losses tilted towards software stocks the previous day, sparked by the launch of Anthropic’s new corporate tools for its AI Claude. 

The massive moves were a lesson in how the market can make a mountain out of a molehill, according to market analyst Kenny Polcari at Slatestone Wealth, as trading algorithms overreacted to headlines and sparked frenzied momentum trading.

“What actually changed on Friday morning? Nothing dramatic – and that’s exactly the point. Buyers that had pushed valuations to crazy levels finally exhausted themselves, then the Anthropic headline created panic, causing investors to question the prices they were willing to pay.

“Leverage became a problem, traders got nervous, stops were tripped as prices declined, trendlines broke, and shorts piled on.

“Precious metals got whacked, the dollar ripped higher, crypto melted down, and buyers stepped aside, leaving a vacuum in prices that let fear feed on itself.

“Just like on the way up, prices on the way down disconnect from fundamentals as the pendulum swings too far to the right and then too far to the left.”

A simple shift in the narrative on Friday morning after some calmer reflection, he said, led to the algos doing “what they always do – they just switched positions, buying accelerated, shorts ran to cover, and the same Momo [momenum] crowd that drove stocks lower suddenly started driving them higher.

“With no new bad news to keep the panic alive, investors who had jumped out earlier in the week scrambled to get back in – and just like that, it was another day on Wall Street. Remember, markets don’t need good news to rally – they just need bad news to stop getting worse.”

Earlier in the week, investors interpreted the Anthropic stories as suggesting that AI was going to destroy jobs, crush margins, and upend entire industries overnight.

“That fear created the anxiety and fueled four straight days of selling. But by Friday morning, it was clear that nothing fundamental had actually changed,” said Polcari.

“AI adoption is still incremental, monetization is still early, and the biggest players still control the infrastructure, the data, and the capital needed to win.”