Nasdaq falls as tech stumbles; banks and staples gain — Feb 4, 2026

The U.S. equity tape flipped decisively risk‑selective by midday Wednesday, with heavy pressure in technology and parts of growth software offset by steady bids in banks, consumer staples, real estate, and pockets of energy and materials. According to Monexa AI’s intraday dashboard, the S&P 500 slid as selling broadened from the morning’s tech-led slump, while the Dow stayed narrowly positive and the Nasdaq underperformed as chip and AI-adjacent names sold off. Volatility picked up with the VIX pushing higher into the high‑teens as traders faded mega-cap tech’s early attempts to stabilize.

Investors worked through a thin but market-moving macro docket. Private payrolls rose by just 22,000 in January per ADP, a downside surprise to modest expectations and a clear deceleration versus December, which fed into a defensive rotation and higher volatility, as first reported by Reuters. The ISM Services PMI printed 53.8 for January, roughly in line with December’s seasonally adjusted level, suggesting services activity continues to expand even as some subcomponents cooled; coverage characterized the release as mixed and, in places, softer than forecasts, stoking a debate on growth momentum and inflation stickiness, as noted by Wall Street Journal and Reuters. Separately, the Labor Department confirmed the January nonfarm payrolls report will be published on February 11 following the government shutdown delay, shifting the week’s primary macro catalyst into next week’s calendar, per Bloomberg and Reuters.

Market Overview#

Intraday Indices Table & Commentary#

Based on Monexa AI’s real-time index tape, the S&P 500 (^SPX) fell to 6,856.11, down -0.89% midday, while the Dow (^DJI) held a modest +0.22% at 49,347.97 after opening higher. The Nasdaq Composite (^IXIC) slid -2.03% to 22,782.49 as semiconductors and selected software names weighed. Notably, the NYSE Composite (^NYA) edged up +0.34%, having printed a fresh 52‑week high earlier in the session, a data point that reinforces the ongoing breadth improvement outside mega-cap tech. Volatility firmed: the CBOE Volatility Index (^VIX) advanced to 19.49, up +8.28%, and the Russell 2000 volatility gauge (^RVX) jumped +9.03% to 25.11, consistent with rising hedging demand as growth leadership in tech frayed.

From the opening bell to midday, the tone evolved from mixed to broadly cautious as earnings-driven single‑stock drawdowns in influential technology constituents overwhelmed otherwise constructive sector moves. Monexa AI’s heatmap flagged deep declines in several high-beta chip and software names even as mega-cap bellwethers like AAPL hovered modestly positive. Liquidity remained orderly—S&P 500 share turnover was below recent 50‑day averages at midday—but price discovery skewed to the downside across the Nasdaq as sellers pressed semis and AI proxies.

The early catalyst stack was straightforward. First, ADP’s weaker private payrolls print (+22,000) leaned risk‑off at the margin and nudged rate‑sensitive positioning. Second, a mixed ISM Services report (headline 53.8; expansionary but not accelerating) undercut the “re‑acceleration” narrative and lifted volatility, according to Reuters. Third, earnings bifurcation persisted: blockbuster prints and guidance in selected pharma names contrasted with EPS misses or guidance resets in parts of tech, mobility, and devices—driving unusually wide dispersion.

Macro Analysis#

Economic Releases & Policy Updates#

The macro tape delivered two notable inputs. Private payrolls rose a scant 22,000 in January, well below economists’ expectations near 48,000, per ADP’s morning release. The downside miss reinforced the message from other high-frequency labor indicators that hiring momentum is cooling. Markets typically treat ADP as an imperfect but directionally useful input into nonfarm payrolls; with the January jobs report delayed to February 11 due to the federal shutdown schedule, positioning is being recalibrated into that event risk, as reported by Reuters and Bloomberg.

The ISM Services PMI printed 53.8 for January, roughly matching December’s reading and signaling continued expansion in the services economy. However, coverage highlighted that certain subcomponents missed forecasts, which some commentators labeled as “stagflationary” in tone given resilient prices paid alongside softer momentum, per WSJ and Bloomberg. The market read-through intraday: modestly higher volatility, a defensive counter‑bid in staples, and better relative performance from banks and materials tied to a still‑growing domestic backdrop.

On policy, Treasury Secretary Scott Bessent testified on Capitol Hill and argued tariffs are not inherently inflationary, a point challenged by Representative Maxine Waters, according to Bloomberg. While not directly market-moving, the discussion underscores an ongoing policy debate around trade and price pressures. Separately, Senate Banking Chair Tim Scott said Fed Chair Jerome Powell did not commit a crime amid headlines around a Department of Justice probe, aiming to cool tensions that have complicated Kevin Warsh’s nomination process for the Federal Reserve, per Bloomberg. None of these items altered the rates outlook at midday, but they contributed to a noisier macro backdrop that favors diversified exposure over single‑factor bets.

Global/Geopolitical Developments#

Overnight and early‑morning global catalysts were subdued in their direct impact on U.S. equities relative to domestic data. Investors remained focused on U.S. labor and services activity, and on earnings season’s dispersion theme. There was little evidence of cross‑asset stress spilling into equities; rather, sector rotation dynamics within U.S. stocks dominated the midday narrative.

Sector Analysis#

Sector Performance Table#

According to Monexa AI’s sector tracker, leadership at midday clustered in Basic Materials, Real Estate, and Consumer Defensive, with Financial Services also positive. The standout underperformers were Technology, Consumer Cyclical, and Utilities. There is a notable discrepancy in Utilities: Monexa’s quantitative sector data show Utilities down -3.73% intraday, while our heatmap review noted a more mixed internal picture with regulated utilities firming and merchant generators selling off. We prioritize the quantified sector data for the table but emphasize that internal dispersion is unusually wide—consistent with single‑name idiosyncrasies driving outcomes.

Within Technology (sector weight near 30% of index cap), dispersion was extreme. Monexa AI flagged steep declines in AMD (-16.20%), PLTR, APP, and MU (-9.24%), partially offset by a strong rebound in SMCI (+11.30%) after a well‑received print and outlook, and modest gains in AAPL (+2.09%) and MSFT. NVDA traded lower (~-3.15%)—a small percentage move for a mega‑cap, yet meaningful for index returns—amid renewed questions around China‑related demand channels highlighted in recent coverage by the Financial Times and others. The net result was sector‑level weakness that spilled into the Nasdaq and S&P 500 even as breadth elsewhere improved.

Financials showed constructive tape action. Diversified financials and insurers advanced, with BRK-B (+3.63%), CB (+5.90%), and JPM (+1.11%) in the green. The bid for traditional finance contrasted with weakness across crypto‑sensitive and trading‑centric platforms—HOOD and COIN fell sharply—underscoring the bifurcation inside the group. This split is consistent with a cooling retail‑trading impulse and a market that is rewarding balance‑sheet strength and underwriting profitability.

Healthcare was modestly positive on the surface but featured some of the day’s largest single‑name swings. LLY rallied strongly on blowout revenue and guidance tied to GLP‑1 therapies, while AMGN climbed on encouraging product momentum and a raised price target from TD Cowen, according to Monexa AI and Bloomberg. Offsetting that strength, BSX slumped as its electrophysiology segment missed expectations, and ABBV traded lower despite headline beats as investors digested franchise‑level puts and takes.

Consumer cohorts split. The sector tape (table) shows Consumer Cyclical down -1.42% intraday, which squares with sizable declines in TSLA and EBAY. Yet our heatmap also picked up notable winners—SBUX, NKE, and HD—pointing to a “two‑track” consumer where experiential and brand leaders can advance even as e‑commerce/platform names and EVs lag. Consumer Defensive, by contrast, drew consistent bids. Staples bellwethers PEP, PG, COST, WMT, and KR rose, highlighting the day’s incremental preference for reliable cash flows amid macro ambiguity.

Energy and Materials offered constructive signals despite the sector table’s small decline for Energy. Monexa AI’s heatmap showed broad gains among integrateds and refiners—XOM (+2.06%), CVX, PSX (+4.10%), MPC (+4.05%)—while selected midstream names like WMB lagged, a dispersion consistent with commodity‑price and margin dynamics favoring upstream and refining over pipelines. Basic Materials outperformance featured chemicals and coatings leaders (LYB, DOW, PPG advancing, a constructive cyclical read‑through for industrial demand.

Real Estate posted broad‑based gains across logistics, towers, data centers, and storage—PLD, AMT, DLR, PSA, SPG—which is consistent with moderating rate volatility and steady income demand into higher VIX prints.

Company-Specific Insights#

Midday Earnings or Key Movers#

The largest single‑name story on the day’s downside came from semiconductors. Shares of AMD fell sharply (about -16.20% per Monexa AI) after the company’s quarterly update failed to clear elevated expectations across AI, with investors focusing on guidance quality and operating expense trends despite management commentary that AI demand is accelerating. CEO Lisa Su reiterated that “AI is accelerating at a pace that I would not have imagined,” as reported in morning television appearances, including CNBC. The market’s reaction underscores how unforgiving the tape is for AI‑levered names that do not deliver unequivocal guidance upside.

In contrast, SMCI surged roughly +11.30% after reporting better‑than‑expected fiscal Q2 results and issuing guidance above Street estimates, pointing to continued demand for AI infrastructure hardware. Multiple outlets, including Reuters, noted the magnitude of the beat and the company’s commentary around hyperscale and data‑center demand. The divergence between AMD and SMCI highlights the day’s broader theme: it is a stock‑picker’s tape inside technology, with execution clarity being rewarded and any whiff of uncertainty being penalized.

LLY jumped after fourth‑quarter revenue of $19.29 billion (+43% year‑over‑year) topped consensus and the company raised full‑year guidance, driven by strong uptake of Zepbound and Mounjaro, per company releases and Reuters. The GLP‑1 franchise’s momentum spilled over to AMGN, which advanced on a raised price target and optimism about its cardiometabolic pipeline. The outsized positive moves in these large‑cap therapeutics names provided ballast to the broader healthcare complex.

Medical devices were a weak link. BSX declined sharply (more than -9% in pre‑market and deeper by midday) as electrophysiology revenue missed expectations despite a top‑ and bottom‑line beat, according to Monexa AI’s earnings tracker and Reuters. The reaction suggests investors are highly sensitive to segment‑level growth trajectories even when consolidated results appear healthy.

In mobility and internet services, UBER reported Q4 revenue of about $14.4 billion (+20% year‑over‑year), slightly above consensus, with gross bookings up 22% and a record ~$2.8 billion in free cash flow. However, adjusted EPS of $0.71 missed estimates ($0.80), and shares traded heavy as investors weighed profitability cadence against robust operational metrics, per Reuters and Monexa AI. The setup resembles a classic “beat‑on‑activity, miss‑on‑EPS” quarter where the medium‑term cash‑flow story remains intact, but near‑term valuation support waits on execution.

Media and publishing saw dispersion. The New York Times (NYT delivered a strong Q4 but offered soft Q1 guidance, leaving the stock lower, according to company disclosures and Monexa AI tracking. Meanwhile, legacy media and cable names inside Communication Services—CMCSA, CHTR, and DIS—traded better intraday, offsetting pressure in digital ad platforms META and GOOGL, per Monexa AI’s heatmap.

In energy, XOM rose about +2.06% intraday as BMO Capital set a $155 price target and the company resolved a dispute in Colombia, per Monexa AI compilation of sell‑side notes. Refiners PSX and MPC gained as well, consistent with supportive margin signals.

One M&A headline stood out in semis: Texas Instruments agreed to acquire Silicon Laboratories (SLAB for $231 per share in cash, a deal valued at about $7.5 billion, as reported by CNBC. The takeout premium and strategic fit in analog/mixed‑signal reinforce the “scarcity premium” for high‑quality, application‑specific chip assets, even as cyclical risk lingers across the broader group.

Home improvement and housing‑adjacent names were a relative bright spot within Industrials and select Consumer names, with HD and builders like DHI and LEN bid, per Monexa AI, while aerospace and defense lagged, including RTX, LMT, and NOC, reflecting a split between commercial and defense demand narratives.

Extended Analysis#

Intraday Shifts & Momentum#

From the open through midday, the equity market presented a “tale of two tapes.” Breadth outside the tech complex continued to improve—banks, insurers, materials, and staples attracted buyers—yet the largest index weights resided in a pocket of weakness dominated by semiconductors and specific software cohorts. That mechanical reality explains why the S&P 500 drifted lower even as cyclicals and defensives worked; when the sector carrying roughly a third of index capitalization declines nearly two percent, it drags headline indices regardless of better breadth beneath the surface.

The macro impulse reinforced those rotations without delivering a decisive directional call. ADP’s +22,000 private‑payrolls figure introduced a soft‑growth signal that, in isolation, is not alarming but was sufficiently weak to cool risk appetite within high‑beta growth. The ISM Services headline at 53.8 and mixed internals offered support for the notion that the economy continues to expand, yet perhaps not with the vigor that would support across‑the‑board multiple expansion in tech at current valuations. The market responded by lifting volatility—^VIX up +8.28% and ^RVX up +9.03%—which often coincides with leadership changes under the hood, favoring cash‑flow visibility, balance‑sheet quality, and cyclicals levered to domestic activity.

Earnings dispersion remains this week’s dominant micro driver. LLY crystallized the rerating power of credible, capacity‑backed guidance in a structurally growing end market; by contrast, AMD showed how quickly sentiment can invert when guidance or operating expense trajectories do not align with elevated AI expectations. In between those poles, UBER and BSX illustrate that even “beats” must be clean to earn multiple expansion. That is a key message for the afternoon and the next leg of earnings season: clarity on unit economics and segment‑level momentum matters more than headline beats.

There is also a noteworthy divergence between sector aggregates and internal dispersion. Utilities are a case in point: Monexa AI’s sector tape shows Utilities down -3.73% intraday, yet the heatmap reveals a sharp split—regulated utilities such as PCG, EIX, and NEE traded better, while merchant‑exposed names like VST and CEG fell hard. In energy, integrateds and refiners rallied even as parts of midstream lagged. In consumer, brand leaders and experiential names rallied while ecommerce and EVs lagged. The practical implication for portfolio construction is straightforward: blanket sector tilts are less effective in this regime than targeted exposure to balance‑sheet quality and pricing power.

The Dow’s relative resilience is consistent with this pattern. With roughly 30 components, sector concentration and stock selection effects are amplified, and the presence of cash‑flow compounders in staples, pharma, and industrials cushioned the index from the technology downdraft. The NYSE Composite setting a fresh 52‑week high intraday also validates the improving breadth thesis flagged by strategists this week, even as headline indices flash red arrows because of tech weakness, a point emphasized in sell‑side and buyside commentary cited by Reuters and Bloomberg.

Conclusion#

Midday Recap & Afternoon Outlook#

By midday, the message was clear: breadth is improving beneath the surface, but mega‑cap technology’s stumble is dictating index‑level tone. The S&P 500 is lower (-0.89%) and the Nasdaq is down sharply (-2.03%) on semiconductor and software weakness, while the Dow holds modest gains (+0.22%) thanks to staples, pharma, and selected industrials. Volatility is higher (VIX +8.28%), consistent with a market repricing both growth momentum and policy ambiguity after a weak ADP print and a mixed ISM Services update.

For the afternoon, traders will watch for follow‑through in semiconductors after AMD’s drawdown and continued rotation into balance‑sheet quality across financials, staples, and materials. Company‑specific tape bombs remain in play—UBER digestion, BSX de‑risking, and ongoing moves in LLY and AMGN as the GLP‑1 narrative reasserts healthcare leadership. With the January jobs report now slated for February 11, macro catalysts are front‑loaded into next week; in the interim, earnings quality and guidance clarity are likely to drive dispersion.

Investors positioned for the second half of the session may want to lean into what is working intraday—banks and insurers with capital return, staples with pricing power, refiners and select integrated energy, and real estate with durable income characteristics—while avoiding overconcentration in a handful of high‑beta technology names until volatility subsides. According to Monexa AI’s data, internal dispersion is running hot across multiple sectors; that calls for carefully curated exposure rather than blanket sector bets. Risk management matters into the close as systematic flows can amplify moves when volatility picks up.

Key Takeaways#

The midday session delivered three durable signals. First, breadth outside mega‑cap technology continues to improve, as evidenced by gains in Financials, Materials, Real Estate, and Staples while the Dow and NYSE Composite hold up. Second, macro data leaned cautiously risk‑off without breaking the expansion narrative: ADP’s +22,000 private‑payrolls print and a mixed ISM Services 53.8 reading lifted the VIX and encouraged rotation into balance‑sheet quality. Third, earnings dispersion is the market’s defining feature—LLY and SMCI were rewarded for clean beats and credible outlooks; AMD and BSX were penalized for guidance and segment‑level disappointments; UBER sits in between, with strong operating metrics but an EPS miss.

Actionably, the tape favors diversified portfolios and active selection. Maintain exposure to domestically levered cyclicals and cash‑flow compounders while allowing for further de‑risking in high‑beta tech if earnings clarity is lacking. Monitor Friday’s micro calendar and next week’s February 11 jobs report for macro inflection risk. Attribution for all reported data: Monexa AI intraday dashboard for index and sector moves; ADP and ISM data as reported by Reuters and WSJ; policy headlines via Bloomberg; company‑specific earnings and guidance via Monexa AI’s earnings tracker and public disclosures, with additional context from Reuters, Bloomberg, and CNBC.