Morning markets: Cyclicals lead as SpaceX/xAI shocks, AMD on deck

Introduction#

U.S. equities enter Tuesday, February 3, 2026 with a constructive tone after a rotation-led advance to start the week. According to Monexa AI, the S&P 500 closed at 6,976.44 (+0.54%), the Dow Jones Industrial Average finished at 49,407.66 (+1.05%), and the Nasdaq Composite ended at 23,592.11 (+0.56%). The NYSE Composite rose to 22,871.71 (+0.67%), the CBOE Russell 2000 Volatility Index (^RVX) eased to 22.00 (-3.72%), and the VIX settled at 16.32 (-0.12%). Under the surface, breadth improved as investors favored cyclicals, travel, industrials, and select hardware/semiconductor names, while energy, utilities, and rate‑sensitive real estate underperformed.

Overnight, a cluster of headlines is setting up today’s open. The most attention‑grabbing: Elon Musk’s move to combine SpaceX and xAI at a headline valuation of $1.25 trillion, a development that could reshape how investors think about AI infrastructure beyond Earth. Multiple Tier‑1 outlets detailed the strategic thesis around orbital compute and Starlink integration, including the Wall Street Journal and the Financial Times (WSJ; FT. Separately, Oracle’s massive cloud and AI build‑out plans remain in focus after reports of a targeted $45–50 billion bond sale and a bullish sell‑side price target (Financial Times; Bloomberg. In Europe, disinflation shown by a softer‑than‑expected French CPI print ahead of the ECB meeting supported the risk tone (Financial Times. Asia also firmed, with Japan and South Korea higher and India’s Nifty buoyed by U.S.–India trade headlines, according to Monexa AI’s aggregated news flow.

Looking ahead to the bell, investors will weigh whether Monday’s rotation—into travel, industrials, and selective tech hardware—can persist as earnings and policy narratives evolve. The nomination conversation around Kevin Warsh as the next Fed chair remains a macro wildcard with potential rate‑path implications (FT.

Market Overview#

Yesterday’s Close Recap#

The major indices advanced on Monday, with outperformance in cyclical and economically sensitive pockets. According to Monexa AI, memory and storage led within technology while mega‑cap software/AI printed mixed results; travel‑and‑leisure surged; traditional payment networks gained; energy and other duration‑sensitive groups lagged. Volatility gauges were contained, with the VIX holding near the mid‑teens.

The leadership pattern was unambiguous at the single‑stock level. According to Monexa AI’s heatmap, AAPL rallied +4.06%, while memory and storage bellwethers like MU (+5.52%) and SNDK (+15.44%) surged; INTC added +5.04%. In contrast, NVDA slipped -2.89%, highlighting dispersion among mega‑cap AI proxies. In Financials, payment networks climbed—V +3.73%, MA +3.08%—while higher‑beta fintechs lagged, with HOOD down -9.62% and COIN off -3.53%. Travel‑and‑leisure outperformed: CCL +8.09%, NCLH +7.65%, LVS +5.52%, and UAL +4.92%. In staples and big‑box retail, WMT rose +4.13%, TGT +3.85%, and COST +2.99%. Energy was the day’s conspicuous laggard: EQT -5.16%, OKE -4.89%, OXY -3.50%, and XOM -2.15%. Within Communication Services, DIS fell -7.40% despite beating top‑line and bottom‑line estimates, while GOOG and GOOGL provided offsetting strength at +1.88% and +1.68%, respectively.

The rotation also reached Industrials and Materials. ODFL gained +7.47%, FDX +4.05%, and heavy equipment bellwether CAT advanced +5.10%, while in Basic Materials DOW rose +4.83% and STLD +3.89%. Utilities and Real Estate underperformed as duration‑sensitive pockets weakened, with NEE down -1.79%, CEG -3.49%, and REITs such as AMT -3.11% and EQIX -1.29% under pressure.

Global Overnight Shifts: How They May Drive Today’s Open#

Overnight, the proposed combination of SpaceX and xAI—valued at roughly $1.25 trillion—dominated the conversation. Reporting by the Wall Street Journal and the Financial Times described a strategy to scale AI compute using space‑based assets and Starlink connectivity, potentially leveraging abundant solar power and orbital data‑center concepts (WSJ; FT. For equities, that narrative intersects with semiconductors, cloud infrastructure spend, and satellite ecosystems, adding a new dimension to the already intense AI arms race.

Across macro, European disinflation—French CPI reportedly +0.4% year‑over‑year in January—supported risk assets ahead of the ECB, according to Financial Times coverage (FT. In Asia, Monexa AI flagged gains in Japan and South Korea and a sharp rally in India tied to U.S.–India trade headlines. Stateside, the debate around the Federal Reserve leadership and policy stance remains live; Kevin Warsh’s nomination discussion has prompted renewed focus on rates, balance‑sheet policy, and the cost of capital (FT.

Macro Analysis#

Economic Indicators to Watch#

With pre‑market indicators limited, the focus remains on the policy and earnings calendar rather than specific datapoints. The evolving conversation around a potential Fed chair shift—centered on Kevin Warsh’s nomination—keeps the path of rates squarely in view. Reporting from the Financial Times highlights Warsh’s historical inflation focus and balance‑sheet skepticism, which markets interpret as a potential tilt toward tighter financial conditions versus the status quo, even as views vary on the likely policy trajectory (FT. For equity positioning, the implication is straightforward: a higher or more uncertain discount rate tends to compress multiples, particularly in longer‑duration assets, while elevating the hurdle rate for capital‑intensive projects.

In Europe, the softer French CPI and the ECB meeting setup may aid global risk sentiment by validating disinflation progress, though the durability of this trend is not assured. As for the U.S., Monday’s price action—lower volatility and outperformance in cyclical and travel segments—suggests investors are, for now, willing to underwrite a soft‑landing scenario, pending confirmation from upcoming earnings and policy clarity. According to Monexa AI, that stance is evident in the divergence between pro‑growth sectors and rate‑sensitive defensives.

Global and Geopolitical Factors#

Trade dynamics bolstered risk appetite in Asia. Monexa AI highlighted a rally in India’s Nifty following U.S.–India trade headlines suggesting tariff normalization, as well as advancing Japanese and Korean equities on the session. There were also reports pointing to upcoming U.S.–Iran discussions and ongoing ASEAN macro debates that keep regional growth prospects in focus. Meanwhile, Saudi Arabia’s move to open its stock market further to foreign investors underscores a broader regional push to attract global capital—another incremental tailwind for cross‑border flows, per Monexa AI’s aggregated coverage.

The most disruptive global narrative for tech, however, is the AI‑space convergence spotlighted by SpaceX/xAI. Beyond the headlines, this intersects with terrestrial cloud strategy and energy constraints. The Wall Street Journal’s reporting on the scale of next‑gen AI facilities and GPU deployments, including Microsoft’s AI “super‑factory,” underscores that the capex race is far from slowing (WSJ. Investors should expect compute scarcity, power availability, and supply‑chain allocation to remain central to valuation debates in semiconductors and hyperscale cloud through 2026.

Sector Analysis#

Sector Performance Table#

According to Monexa AI, sector performance at Monday’s close reflected a clear pro‑cyclical tilt and duration headwinds for defensives.

The daily winners were led by staples and cyclicals. Big‑box and premium retail names powered Consumer Defensive’s leadership: WMT +4.13%, TGT +3.85%, COST +2.99%, with beauty and premium brands like EL +3.02% adding to the bid. Technology’s gains were driven not by mega‑cap software but by memory and mid‑cap hardware, with MU +5.52%, INTC +5.04%, and SNDK +15.44% offsetting a drag from NVDA -2.89%. Industrials advanced on logistics and equipment strength—ODFL +7.47%, FDX +4.05%, CAT +5.10%—consistent with a soft‑landing tilt.

Financial Services reflected a split. Classic payment rails outperformed—V +3.73%, MA +3.08%—even as fintech and crypto‑exposed names sold off, including HOOD -9.62% and COIN -3.53%. Notably, news from J.P. Morgan that U.S. brokers may seek distribution fees from ETF issuers presents a potential positive for custodians and brokerages and a margin headwind for issuers, with implications for names like SCHW (+1.20%) and BLK (+0.06%), according to Monexa AI’s news feed.

Energy and Utilities trailed. Oil‑and‑gas equities fell broadly—EQT -5.16%, OKE -4.89%, OXY -3.50%, XOM -2.15%—while select renewables offered a relative haven, with FSLR +2.23%. Utilities were weak as well, with NEE -1.79% and CEG -3.49%, though GEV rose +3.94% as a rare sector outlier. Real Estate also reflected rate sensitivity, with tower and data‑center REITs softer—AMT -3.11%, IRM -2.94%, EQIX -1.29%—while lodging names like HST posted modest gains (+0.76%).

Company‑Specific Insights#

Earnings and Key Movers#

The single‑name tape was busy and idiosyncratic, creating opportunities and risk in equal measure. In payments, Daiwa raised its view on V, setting a price target of $370 and citing resilient spend trends; Visa also posted a +15% year‑over‑year net revenue increase to $10.9 billion, with adjusted EPS up +15% to $3.17, according to Monexa AI’s compilation of broker and company data. The stock closed +3.73% at $333.84.

In enterprise software and cloud, ORCL remained a focal point following reports it aims to raise $45–50 billion in debt and equity to accelerate cloud and AI infrastructure expansion, while Piper Sandler reiterated a constructive stance with a $240 price target. Oracle shares closed -2.70% at $160.13, with credit‑market indicators reportedly improving as financing plans reduced downgrade risk, per external coverage (Financial Times.

In aerospace and industrial technology, WWD delivered a standout quarter, with EPS of $2.17 versus $1.65 expected and revenue of approximately $996.5 million (+10% vs. estimates), while boosting its dividend by +14%. The stock gained +2.96%. Industrial outperformance was broad: CAT +5.10%, ODFL +7.47%, and FDX +4.05%.

In Media & Entertainment, DIS posted EPS of $1.63 (vs. $1.57 expected) on revenue of about $25.98 billion (vs. $25.70 billion expected), but shares fell -7.40% on softer‑than‑anticipated guidance, according to Monexa AI. Within Communication Services, that weakness was partly offset by GOOG (+1.88%) and GOOGL (+1.68%). Alphabet’s steady performance backdrop in the last year, as flagged by sell‑side commentary overnight, continues to provide ballast to the sector.

In M&A, PKST rallied +32.97% to $20.77 after Brookfield Asset Management agreed to acquire Peakstone Realty Trust in an all‑cash deal valued at roughly $1.2 billion, according to Monexa AI. UBS downgraded the stock to Neutral concurrent with the transaction.

Semiconductors and AI remained the heartbeat of the growth narrative. Memory and storage strength drove Monday’s tape—MU +5.52%, SNDK +15.44%—and older‑node compute names rebounded, with INTC +5.04%. Mega‑cap dispersion persisted as NVDA declined -2.89%. The session’s set‑up puts focus on AMD, which closed +4.03% at $246.27. There is a data discrepancy investors should note: some overnight coverage framed AMD as “awaited” for results, while other summaries suggested a beat. As of this publication, Monexa AI has not recorded an official AMD print; we therefore treat the “beat” headlines as unconfirmed and advise investors to verify the release and guidance directly from the company before trading on third‑party claims.

Financial services also saw a structural headline that could reshape ETF economics. J.P. Morgan indicated U.S. brokers and custodians may seek distribution fees from ETF issuers, a shift that could support brokerage revenue models while pressuring issuer margins. Names like SCHW (+1.20%) and BLK (+0.06%) illustrate both sides of that balance—potentially favorable for the platforms, less so for fee‑constrained issuers—pending implementation timelines and competitive dynamics, according to Monexa AI’s news feed.

Finally, space equities are in focus after the SpaceX/xAI merger headlines. While some U.S. space‑adjacent stocks reportedly rallied, we note that RKLB actually fell -7.39% on the day to $74.15, underscoring dispersion within the theme and the need to differentiate between narrative momentum and company‑specific fundamentals. No Tier‑1 source in the last 48 hours has detailed a Rocket Lab‑specific strategic response to the SpaceX/xAI news, per Monexa AI’s research brief. Investors should monitor RKLB backlog updates and Neutron milestones for direct read‑throughs to demand rather than trading purely on sector headlines.

Extended Analysis#

Global Overnight Shifts: AI in Space and the Cloud Arms Race#

Two structural narratives intersecting overnight demand attention at the open. First is the AI‑in‑space thesis catalyzed by the SpaceX/xAI combination. According to the Wall Street Journal and Financial Times, the strategic rationale for the $1.25 trillion combined valuation includes building orbital compute tied to Starlink connectivity and leveraging continuous solar power to address terrestrial data‑center energy and cooling constraints (WSJ; FT. If even partially realized, the approach could add a new layer to AI capacity planning, influencing the demand trajectory for accelerators from providers like NVDA and AMD, as well as optics, power, and thermal subsystems that bridge space‑grade requirements with data‑center performance.

Second is the continuing escalation of cloud/AI capex on Earth. The WSJ’s deep dive into Microsoft’s next‑gen AI facilities and the scale of GPU deployments reinforces that the secular expansion of AI infrastructure is ongoing and supply‑constrained in places (WSJ. Oracle’s financing plans to add capacity at scale—paired with a positive price‑target reset—fit that broader pattern. From a market standpoint, these narratives support a view that hardware and select infra‑software beneficiaries can outperform even as leaders rotate within the cohort. Monday’s price action—MU +5.52%, SNDK +15.44%, INTC +5.04%, and NVDA -2.89%—simply underlines that dispersion is the norm, not the exception.

Domestic Sectors to Watch Before the Bell#

We continue to watch three domestic themes with tactical implications. First, the payments vs. fintech divide: established networks like V and MA are trading on resilient global spend and cross‑border recovery, while higher‑beta platforms such as HOOD and COIN are under pressure. Any follow‑through on ETF distribution fee changes could amplify this divergence.

Second, energy vs. renewables: the broad sell‑off in hydrocarbons—EQT, OKE, OXY, XOM—contrasted with relative strength in solar via FSLR. If disinflation signals in Europe and a stable dollar persist, the next leg for energy equities may hinge more on near‑term commodity moves and company‑specific catalysts than on macro alone. Until then, defensiveness in the group appears warranted.

Third, travel‑and‑leisure momentum: the strength in CCL, NCLH, LVS, and UAL is consistent with a soft‑landing narrative and incremental global reopening tailwinds. We would watch booking trends, fuel costs, and forward pricing commentary for confirmation, recognizing that the group is sensitive to rate moves and consumer‑confidence swings.

Policy Watch: Rates, Volatility, and Duration Risk#

The policy narrative remains a source of optionality for volatility. If Kevin Warsh’s nomination advances on a platform perceived as more restrictive on the balance sheet or less tolerant of inflation risk, duration‑sensitive sectors—utilities, REITs, and certain long‑duration tech—could see valuation pressure. Monday’s tape (Utilities -2.14%, Real Estate -0.69%, per Monexa AI) offers a live‑action stress test of that sensitivity. Conversely, if the nomination resolves with a more market‑friendly glide path, some of those losses could retrace. With the VIX at 16.32, hedging costs remain reasonable by recent standards.

Conclusion#

Morning Recap and Outlook#

Heading into today’s session, the equity backdrop reflects cautious optimism anchored by rotation and a supportive volatility regime. According to Monexa AI, the S&P 500 closed +0.54%, the Dow +1.05%, and the Nasdaq +0.56%, while the VIX held at 16.32. The leadership mix—travel, industrials, and selective tech hardware—paired with weakness in energy, utilities, and rate‑sensitive REITs, points to an investor base comfortable underwriting growth even as they trim duration risk.

The immediate catalysts are clear. First, the SpaceX/xAI tie‑up and its $1.25 trillion valuation, corroborated by the WSJ and FT, reframes AI infrastructure debates and should keep semis, cloud infrastructure, and space‑adjacent names front‑of‑mind. Second, the cloud capex drumbeat—epitomized by Oracle’s financing plans and Tier‑1 reporting on hyperscale AI facilities—continues to shape demand for accelerators and data‑center capacity. Third, policy uncertainty around Fed leadership and Europe’s disinflation signals will set the tone for duration trades, with Utilities and REITs as the most exposed.

On single‑names, we highlight verification risk around AMD: overnight commentary is contradictory, with some sources saying “awaited” and others implying a “beat.” In the absence of a confirmed print in Monexa AI’s dataset, treat beat headlines as unverified until the company releases results and guidance. Elsewhere, the setup remains more straightforward: V is backstopped by top‑line growth and a positive broker reset; DIS will trade on the cadence of guidance updates after a sell‑off despite an EPS and revenue beat; ORCL remains tethered to its financing cadence and cloud build‑out; WWD retains positive operating momentum after a clean beat; PKST trades on deal spreads.

For positioning into the open, the message is discipline over bravado. Maintain exposure to cyclicals and selective tech hardware where earnings momentum and capex tailwinds are visible, but acknowledge dispersion risk by using defined stop‑loss levels or volatility hedges. On defensives and rate‑sensitives, a wait‑and‑see stance is prudent until there is greater clarity on Fed leadership and the near‑term rate path. And within the newly energized space/AI theme, distinguish between credible, funded roadmaps and headline alpha; Monday’s decline in RKLB despite bullish sector headlines is a timely reminder that narratives don’t always equal flows.

The opening tone should reflect these cross‑currents: mildly risk‑on with an eye on confirmation from earnings and policy. If the rotation continues while volatility stays contained, breadth can keep improving—setting the S&P within sight of its recent high at 7,002.28 (Monexa AI). But with mega‑cap dispersion still pronounced, index‑level gains may come in fits and starts even as sector and single‑stock opportunities remain plentiful.

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Key references: Monexa AI end‑of‑day index, sector, and heatmap data; Wall Street Journal and Financial Times coverage on SpaceX/xAI and hyperscale AI infrastructure (WSJ; WSJ; FT; FT.