Market Snapshot
| Dow | 49239.78 | -166.67 | (-0.34%) | | Nasdaq | 23255.21 | -336.92 | (-1.43%) | | SP 500 | 6917.80 | -58.63 | (-0.84%) | | 10-yr Note |
|
|
|
| | NYSE | Adv 1302 | Dec 1387 | Vol 1.56 bln | | Nasdaq | Adv 1590 | Dec 2904 | Vol 10.38 bln |
Industry Watch
| Strong: Materials, Energy, Utilities, Industrials, Consumer Staples, |
| | Weak: Information Technology, Real Estate, Consumer Discretionary, Communication Services, Financials, Health Care |
Moving the Market
--Broader market mixed, though weakness in tech pressuring major averages
--Rebound in precious metals and oil prices
--Mixed reaction to a sizable slate of earnings reports
--Weakness in mega-cap stocks
|
Stock market faces pullback amid weakness in tech
03-Feb-26 16:35 ET
Dow -166.67 at 49239.78, Nasdaq -336.92 at 23255.21, S&P -58.63 at 6917.80
[BRIEFING.COM] After a solid start to the week, stocks faced a considerable pullback today. Weakness across mega-cap and tech names saw the Nasdaq Composite (-1.4%) underperform, closing beneath its 50-day moving average of 23,374.58. The S&P 500 (-0.8%) also briefly dipped below its own 50-day moving average (6,871.53) before garnering some support.
Early in the session, losses were relatively limited to tech names, and the DJIA (-0.3%) actually notched an all-time intraday high. The Russell 2000 (+0.3%) and S&P Mid Cap 400 (+0.2%) also traded higher before the market's losses began to widen in both size and scope, though a late-session uptick saw them notch slight gains.
The information technology sector (-2.2%) managed a modest bump off of session lows but still finished as the worst-performing S&P 500 sector by a considerable margin.
Leadership was poor, with Microsoft (MSFT 411.21, -12.16, -2.87%) continuing its post-earnings slide and pressuring software stocks. Gartner (IT 160.16, -42.24, -20.87%) was the worst-performing S&P 500 name today, and the iShares GS Software EFT finished 4.6% lower.
Though software names have had a rough start to the year, the weakness has largely been offset by strength in semiconductor stocks. That was certainly not the case today, with a 2.1% slide in the PHLX Semiconductor Index suggesting some concerns around the broader AI trade.
NVIDIA (NVDA 180.32, -5.29, -2.85%) was another notable laggard, with the company garnering plenty of headline coverage surrounding its relationship with OpenAI. Reuters reported that OpenAI is exploring alternatives to NVIDIA's chips, causing executives from both companies to downplay the headline throughout the day.
Palantir Technologies (PLTR 157.88, +10.10, +6.84%) and Teradyne (TER 282.99, +33.46, +13.41%) traded higher after their earnings reports but finished well off their best pre-market levels.
With the AI trade facing a downturn in sentiment, it comes as no surprise that other mega-cap stocks began to lag as well.
Alphabet (GOOG 340.70, -4.20, -1.22%), Meta Platforms (META 691.70, -14.71, -2.08%), and Amazon (AMZN 238.62, -4.34, -1.79%) all finished with similar losses, sending the communication services (-1.3%) and consumer discretionary (-1.0%) sectors lower.
The Vanguard Mega Cap Growth ETF finished 2.0% lower, and the market-weighted S&P 500 (-0.8%) underperformed the S&P 500 Equal Weighted Index (-0.2%).
Elsewhere in the consumer discretionary sector, travel-related names such as Expedia Group (EXPE 234.46, -42.21, -15.26%) and Booking Holdings (BKNG 4644.64, -477.61, -9.32%) faced considerable retreats, while homebuilder names outperformed following a Politico report that the House is planning a vote next week on legislation to increase housing supply.
The health care sector (-1.0%) also faced a sizable loss as Eli Lilly (LLY 1002.98, -41.15, -3.94%) traded lower ahead of its earnings tomorrow morning, while the financial sector (-0.9%) finished with a similar loss as PayPal (PYPL 41.70, -10.63, -20.31%) plummeted after missing earnings estimates.
Meanwhile, five S&P 500 sectors put together solid performances, though it was not enough to offset weakness elsewhere.
The energy sector (+3.3%) expanded its lead for the year as oil prices rebounded from yesterday's lows, with crude oil futures settling today's session $0.97 higher (+1.6%) at $63.16 per barrel.
In a similar fashion, the materials sector (+2.0%) notched a solid gain as gold prices recovered from a sharp retreat, with gold futures settling $282.40 higher (+6%) at $4,935.00 per oz, marking their largest one-day gain since 2008. Ball Corp (BALL 61.77, +5.08, +8.96%) made a nice move higher after topping earnings estimates.
The more defensive consumer staples (+1.7%) and utilities sector (+1.5%) also performed well, garnering some rotational interest amid the weakness in tech and other growth pockets. PepsiCo (PEP 162.85, +7.65, +4.93%) made a nice move higher after beating earnings expectations, while Walmart (WMT 127.71, +3.65, +2.94%) continues an impressive surge that seats it with a 14.6% year-to-date gain.
Overall, today's action reflected a clear rotation away from growth and momentum areas toward more defensive and value-oriented sectors, leaving the major averages under broad pressure by the close. With sentiment around AI and mega-cap leadership wobbling, traders appear increasingly cautious as the market heads into another high-profile batch of earnings reports.
There was no economic data of note today, as the December Job Openings and Labor Turnover Report was delayed by the brief government shutdown, which will end after the House narrowly passed a funding bill this afternoon.
U.S. Treasuries finished Tuesday on a flat note after recovering from a slightly lower start. The 2-year note yield finished unchanged at 3.57%, and the 10-year note yield also finished unchanged at 4.27%.
- Russell 2000: +6.7% YTD
- S&P Mid Cap 400: +5.1% YTD
- DJIA: +2.5% YTD
- S&P 500: +1.1% YTD
- Nasdaq Composite: +0.1% YTD
Market firmly lower ahead of more earnings
03-Feb-26 15:35 ET
Dow -256.71 at 49149.74, Nasdaq -449.28 at 23142.85, S&P -77.84 at 6898.59
[BRIEFING.COM] The major averages remain firmly lower shortly before the closing bell.
Advanced Micro Devices (AMD 242.60, -3.67, -1.49%), Eli Lilly (LLY 1001.04, -43.09, -4.13%), and Chipotle Mexican Grill (CMG 38.80, +0.29, +0.75%) are among some of the more high-profile names that will deliver earnings reports before the opening bell tomorrow.
Additionally, Amazon (AMZN 237.94, -5.02, -2.07%) will report earnings after the close tomorrow.
Nasdaq Composite falls below key technical level
03-Feb-26 15:05 ET
Dow -369.18 at 49037.27, Nasdaq -495.02 at 23097.11, S&P -90.46 at 6885.97
[BRIEFING.COM] The S&P 500 (-1.3%), Nasdaq Composite (-2.1%), and DJIA (-0.8%) sit just a slight touch above session lows as the market enters the final hour of the session.
Sharp losses across tech names have the Nasdaq Composite underperforming today, with the weakness pushing the index into negative territory for the year (-0.6% YTD). The move also pushed the Nasdaq Composite below its 50-day moving average (23,374.58).
The DJIA briefly touched a new intraday high this morning but is now on track for a lower finish.
S&P 500 Falls 1.2%; DaVita Jumps on Strong Earnings
03-Feb-26 14:30 ET
Dow -401.80 at 49004.65, Nasdaq -449.33 at 23142.80, S&P -84.27 at 6892.16
[BRIEFING.COM] The S&P 500 (-1.21%) is in second place on Tuesday afternoon, down about 85 points.
Briefly, S&P 500 constituents EPAM Systems (EPAM 181.15, -29.27, -13.91%), CoStar Group (CSGP 53.81, -7.37, -12.05%), and Intuit (INTU 429.62, -57.50, -11.80%) dot the bottom of the average, pressured by the broader retreat lower.
Meanwhile, DaVita (DVA 130.49, +19.30, -17.36%) is firmly higher after beating Q4 EPS and revenue estimates and raising FY26 guidance well above consensus.
Gold Surges 6% to $4,935 in Biggest One-Day Rally Since 2008 as Nasdaq Slumps
03-Feb-26 14:00 ET
Dow -536.54 at 48869.91, Nasdaq -556.41 at 23035.72, S&P -110.08 at 6866.35
[BRIEFING.COM] The tech-heavy Nasdaq Composite (-2.36%) is now down about 556 points with two hours to go on Tuesday.
Gold futures settled $282.40 higher (+6%) at $4,935.00/oz, marking their largest one-day gain since 2008. The rally was driven by short covering, bargain buying after recent declines, and ongoing safe-haven demand amid inflation concerns and resilient macro fundamentals.
Meanwhile, the U.S. Dollar Index is now -0.1% lower to $97.48.
ATI Inc. bounces back nicely in Q4 following Q3 miss, airplane production is ramping back up
ATI Inc. (ATI) is trading sharply higher after reporting upside Q4 EPS and in-line revenue, with investor enthusiasm driven primarily by a meaningful raise to FY26 adjusted EPS guidance. The results reinforce ATI's role as a critical supplier of high-performance materials used in jet engines, defense systems, and medical applications that operate under extreme conditions of heat, stress, and corrosion.
- The standout takeaway was management's confidence in FY26, with guidance signaling accelerating earnings power rather than a one-quarter beat. Aerospace & Defense demand remains firmly intact entering 2026, with commercial aerospace accelerating across both narrowbody and widebody platforms.
- ATI is benefiting from a platform shift toward next-generation engines, where content per engine is structurally higher and increasingly proprietary. Order activity is showing a step-change increase, running well ahead of normal seasonal Q1 strength across both long-term agreements and transactional demand.
- Within jet engines, ATI is seeing compounding growth dynamics as fleets transition from legacy platforms to next-gen designs, driving higher content and expanding aftermarket demand. Isothermal forging is a clear example of ATI's leverage, with rapidly rising content per engine on key programs such as Pratt & Whitney, and further growth expected as deliveries ramp.
- Outside of A&D, specialty energy is emerging as a meaningful growth vector, supported by multi-year customer commitments tied to AI-driven power infrastructure, including nuclear and land-based gas turbines.
- Sentiment is also being supported by strong read-throughs from peers such as CRS and WWD, along with recent commentary from Boeing (BA) pointing to expanding production rates.
Briefing.com Analyst Insight:
ATI's quarter reinforces the growing divergence between high-performance aerospace materials suppliers and the broader industrial complex. The combination of accelerating commercial aerospace demand, rising content on next-generation engines, and sustained defense spending is creating a multi-year runway for both growth and margin expansion. Importantly, management's commentary suggests that current momentum reflects structural demand rather than short-term recovery effects. With peers echoing similar strength and OEM production outlooks improving, ATI appears well positioned heading into 2026 as aerospace mix continues to rise and specialty energy adds an incremental growth tailwind.
Teradyne Soars on Blowout Q4 Results; AI Mix Shift and Semi Test Strength Power Upside Guide (TER)
Teradyne (TER) is surging to new all-time highs following its Q4 results last night, where it comfortably beat expectations. The EPS beat was its largest in more than five years, while revenue jumped 43.9% yr/yr to $1.08 bln, well ahead of expectations and marking its strongest growth rate in five years. The semiconductor test and automation equipment maker also issued upside Q1 guidance, calling for EPS of $1.89-$2.25 on revenue of $1.15-$1.25 bln.
- Growth was fueled by AI demand, which drove more than 60% of Q4 revenue (vs 40-50% in Q3), supporting 41% sequential revenue growth and double-digit sequential growth across Semiconductor Test, Product Test, and Robotics.
- Semi Test revenue was $883 mln, driven by AI compute and memory demand, with SoC revenue up 47% sequentially to $647 mln and memory revenue up 61% sequentially to $206 mln.
- Within SoC, strength was tied to VIP compute and networking as AI data-center complexity continues to rise, while within memory, demand remained centered on HBM and DRAM final test.
- The Product Test group grew double digits sequentially and yr/yr to $110 mln, driven by demand in defense and aerospace, while robotics delivered its third consecutive quarter of growth and increased 19% sequentially to $89 mln.
- Gross margin declined about 120 bps sequentially to 57.2%, primarily due to lower Product Test group margins and Robotics mix. TER expects Q1 gross margin around 58.5-59.5%, implying about 180 bps of sequential improvement at the midpoint.
- In terms of the bullish guidance, management expects the SoC TAM to grow robustly over the mid term, driven by continued data center buildout and the growth of edge AI. It also sees a resurgent Memory market in 2026, and expects AI applications to drive upwards of 70% of Q1 revenue.
Briefing.com Analyst Insight
This was TER's strongest quarter in some time, and both the Q4 and full-year results reflect a successful pivot toward AI-driven demand and high-performance computing. The mix shift is notable, with compute now roughly 50% of SoC revenue and Auto/Industrial and Mobile about 25% each, versus 2023 when compute was only about 10%. That diversification is meaningful, helping broaden TER's earnings power beyond any single end market even as AI becomes a larger driver. In the quarter, the clear highlight was the sharp acceleration in Semi Test along with continued momentum in HBM and DRAM-related memory test. Guidance reinforced the upbeat tone, with management expecting AI applications to drive upwards of 70% of Q1 revenue and viewing SoC demand as robust on continued data center buildout and edge AI. Overall, this was a bullish end to 2025, and management's commentary suggests the key drivers behind the move should continue to build into 2026, keeping TER well positioned.
Fabrinet tumbles despite beat-and-raise report as results clouded by supply hurdles (FN)
Fabrinet (FN) is tumbling lower despite reporting record Q2 results that beat expectations on both the top and bottom lines. While the company delivered a "beat-and-raise" performance, the stock, which is up nearly 130% over the last year, is experiencing significant profit-taking. Despite record revenue of $1.13 bln (+36% yr/yr) and Q3 guidance that exceeded consensus, investors appear to be reacting to persistent supply constraints in datacom and a guidance range that, while strong, failed to reach the blowout levels priced into the valuation with a P/E north of 50x.
- Optical communications revenue reached $833 mln (+29% yr/yr), fueled by record Telecom sales of $554 mln (+59% yr/yr) and strong demand for 400ZR and 800ZR DCI modules (+42% yr/yr).
- Non-optical revenue surged 61% to $300 mln, primarily driven by High-Performance Computing (HPC) products, which contributed $86 mln in its first fully broken-out quarter.
- Datacom revenue grew 2% sequentially to $278 mln, though it remains down 7% yr/yr as the company navigates supply constraints for leading-edge 200 gig per lane lasers.
- Automotive revenue ($117 mln) grew 12% yr/yr but dipped sequentially as anticipated, while industrial laser revenue showed steady growth of 10% to $41 mln.
- The 2-million-square-foot Building 10 facility remains on track for late 2026 completion, with a 250,000-square-foot pull-in expected by mid-year to accommodate robust customer demand.
Briefing.com Analyst Insight
FN's Q2 results confirm its position as a primary beneficiary of the AI and data center buildout, yet the stock sell-off suggests that "great" wasn't enough to satisfy a stock that's up 130% yr/yr. The sharp ramp in HPC and record Telecom revenue demonstrate strong execution, but management's warning that HPC growth can be lumpy and the ongoing supply constraints in leading-edge datacom products likely created unease among momentum investors. While the pull-in of Building 10 capacity and the second-source approval for EML lasers are long-term positives, the market is currently recalibrating expectations as the company faces high yr/yr comparisons. Ultimately, FN remains a dominant player in high-precision packaging, but investors are demanding blowout results to justify the current premium.
PepsiCo Bubbles Higher on Q4 Beat; Buyback Boosts as Affordability and Productivity Push Ramps (PEP)
PepsiCo (PEP) is bubbling to a new 52-week high after reporting Q4 results this morning, while also increasing its dividend and authorizing a new $10 bln buyback program. The beverage and snack-food giant delivered a modest EPS beat, while revenue growth accelerated, increasing 5.6% yr/yr to $29.34 bln, above expectations. PEP also reaffirmed its FY26 outlook, calling for organic revenue growth of +2-4% and core EPS growth of +4-6%.
- Organic growth improved to +2.1% (from +1.3% in Q3), with volume still soft in Convenient Foods (-2% vs -1%) but a notable inflection in Beverages volume, turning positive (+1% vs -1%).
- PepsiCo Foods North America (PFNA) saw sales accelerate, up +1.5% (vs flat in Q3) and down 1% organically (vs -3% in Q3), as volume trends improved to -1% in Q4 from -4% in Q3.
- Sales also accelerated in PepsiCo Beverages North America (PBNA), up +4% (vs +2% in Q3), with organic revenue +2% (in line with Q3). However, organic volume declined -4% (vs -3%), including 2.5 pts tied to the case-pack water business transition.
- The International business remained strong, delivering above 4% organic revenue growth, with Convenient Foods and Beverages organic sales up +4.5% and +4%, respectively.
- Core operating margin improved meaningfully, up 140 bps yr/yr to 13.9%, led by strong productivity savings and operating leverage, with additional help from moderating cost pressure and mix.
- PEP is shifting toward productivity-funded growth, including supply-chain efficiencies, overhead reductions, and mix optimization, to help offset lower pricing and affordability investments while protecting margins.
Briefing.com Analyst Insight
PEP's Q4 results extend the improving cadence from Q3, with accelerating revenue growth and meaningful margin expansion. It's encouraging to see Beverages volume turn positive, though Convenient Foods volumes softened sequentially, underscoring that affordability remains a key theme. Against that backdrop, management's focus on price-pack architecture and productivity-funded investment looks well suited to support value and demand while still protecting profitability. The dividend hike and new $10 bln buyback authorization add another layer of support, reinforcing management's confidence in the outlook. With FY26 reaffirmed and a dividend hike plus new buyback authorization, investors appear encouraged by improving the improving fundamentals and a clearer plan to sustain growth as PEP leans into affordability initiatives and efficiency gains.
Palantir Technologies Sees Clearly Into 2026 as AI Momentum Compounds Across U.S. Business (PLTR)
Palantir Technologies (PLTR) is trading higher following a strong Q4 earnings report last night. The data analytics software company and government intelligence contractor delivered upside EPS and significant upside revenue, which surged 70% yr/yr to $1.41 bln, marking the highest growth rate in Palantir's history as a public company. Results were driven by relentless momentum in its U.S. business, while Q1 and FY26 revenue guidance came in well above expectations.
- Total revenue increased 70% yr/yr to $1.41 bln, Palantir's fastest growth rate ever as a public company. Growth is no longer being driven by one-off contracts, but by compounding adoption across Palantir's U.S. customer base, signaling a structural shift in demand rather than a cyclical spike.
- US commercial revenue jumped 137% yr/yr and 28% sequentially to $507 mln, continuing to outpace broader enterprise software trends. US government revenue rose 66% yr/yr to $570 mln, an impressive showing amid heightened global security needs. The US commercial business is emerging as a key engine, with customers rapidly expanding usage beyond initial deployments, defying traditional enterprise software adoption curves.
- Management cited accelerating demand for its AIP (Artificial Intelligence Platform), which is driving compounding growth across both US commercial and government segments.
- Palantir closed its largest total contract value (TCV) quarter ever at $4.3 bln. Trailing 12-month revenue from the top 20 customers increased 45% yr/yr to $94 mln per customer, signaling deeper, more durable customer commitments.
- Q4 adjusted operating margin reached 57%, exceeding prior guidance by 500 bps, while FY25 adjusted operating margin totaled 50%.
- The stock had weakened over the past six weeks amid rotation out of AI-related names, leaving sentiment muted heading into the report.
Briefing.com Analyst Insight:
Palantir delivered a standout quarter that showcased both accelerating revenue growth and exceptional margin leverage, highlighted by record US commercial momentum and unprecedented contract activity. Demand for AIP continues to exceed expectations, with customers not merely experimenting with AI but deploying it at scale across mission-critical operations. While valuation remains elevated following the post-earnings rally, the magnitude of the guidance upside for Q1 and FY26, combined with compounding growth dynamics and best-in-class margins, reinforces Palantir's position as a core AI infrastructure provider for both government and enterprise customers. The recent pullback into the print appears to have set the stage for a favorable investor response.
|
