Morning in New York: investors in search of a foothold

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The focus of investors' attention remains on the personnel reshuffle in the Fed's leadership and its impact on the guidance on the course of monetary policy. Fed Board of Governors member Stephen Miran, appointed in September 2025 to replace Adrianna Kugler until the end of her term, has officially stepped down as chairman of the President's Council of Economic Advisers, fulfilling a promise made to the Senate. In doing so, his term on the Fed board formally ended on January 31, 2026, but he can continue to serve until a successor is confirmed. The Trump administration has stated its intention to nominate Kevin Warsh, including the option of appointing him specifically to replace Miran, but Senate approval could take time amid political differences. Given Miran's softer stance on rates and his willingness to diverge from the majority, his departure would contribute to an overall weakening of the dovish faction in the FOMC. In the moment, markets will react neutrally to this change, but it is moderately negative for risk assets.

S&P Global will release this Wednesday the final estimate of the services business activity index (PMI) for January. According to preliminary data, the index amounted to 52.5 points, which corresponds to a moderate expansion of activity. The same index from ISM Services for January (consensus: 53.5 points, December: 54.4 points). The dynamics of these indicators will assess the sustainability of demand in the largest segment of the US economy and may affect GDP growth forecasts for the current quarter.

The fall in AMD (AMD) shares amid the publication of quarterly results does not add confidence to the "bulls", who the day before were forced to close some positions in the technology sector. Unstable sentiment regarding AI narratives will contribute to volatility spikes during the upcoming trades.

Before the main session opens, Eli Lilly (LLY), AbbVie (ABBV), Uber Technologies (UBER), Boston Scientific (BSX) and CME Group (CME) will report quarterly results. At the postmarket, Alphabet (GOOGL), Qualcomm (QCOM), Coherent (COHR) and Arm (ARM) will publish reports.

Futures on American stock indices demonstrate about zero dynamics. We assess the balance of risks as negative with increased volatility. We focus on the S&P 500 fluctuations in the range of 6810-6980 points (from -1.5% to +0.9% to the closing level of the previous session).

We emphasize that the Alphabet (GOOGL) report, which will be released after the close of the session, will be an important test of the resilience of the technology sector after this Tuesday's sell-off. It is important for the market to be convinced of the fundamental stability of the corporation's business amid heightened concerns about the prospects of AI. Alphabet's solid results and optimistic comments from management will help improve sentiment in the sector.

- Super Micro Computer (SMCI) stock is up more than 12% on the premarket. The company's adjusted EPS for the second quarter of fiscal 2026 was $0.69 and revenue was $12.7 billion with consensus of $0.49 billion and $10.42 billion (+123% YoY), respectively, amid strengthening demand for AI servers. The guideline for the current quarter includes revenue of at least $12.3 bln and EPS from $0.6. The management set the lower boundary of the annual revenue guidance at $40 bln.

- Advanced Micro Devices (AMD) shares corrected 7% in the pre-trading session, though its Q4 EPS came in at $1.53 vs. consensus of $1.32, and revenue rose to $10.27 billion on average expectations of $9.67 billion (+34% YoY). Data center segment revenues increased 39% YoY to $5.4 billion driven by CPUs and AI-GPUs. Corporate management confirmed plans to scale the Helios platform and MI450 chips in the second half of the year. Sales in China for Instinct MI308 amounted to $390 mln, the target for the current quarter is about $100 mln. Investors were disappointed by the overly cautious, in their opinion, revenue forecast at $9.8 bln (+/-$0.3 bln).

- Chipotle Mexican Grill (CMG) securities fell more than 6% after reporting a fourth consecutive quarter of declining customer traffic. The company expects comparable sales in fiscal 2026 to remain flat, with consensus expecting 1.86% growth.

-Enphase Energy (ENPH) reported adjusted EPS of $0.71 with an average forecast of $0.58 (+22%). The company reported revenue of $343.3 million, slightly beating expectations. The company noted the contribution of new products and innovations, including AI tools and the development of battery solutions, but cited continued risks in Europe and lower revenue in the US compared to the previous quarter. That said, improved earnings expectations and stabilizing margins may support the overall sentiment in the RE sector, with a moderately positive impact on other solar companies as well.

- Novo Nordisk (NVO) shares tumbled after the company released its fourth-quarter financials and updated its outlook for 2026. Despite exceeding earnings and revenue expectations, management warned of a possible 5-13% decline in sales in 2026 amid increased competition in the weight loss drugs segment and pressure from US authorities on pricing.

Trades on February 3 on American stock exchanges ended mostly in the red zone. S&P 500 dropped by 0.84%, Nasdaq 100 lost 1.55%, Dow Jones declined by 0.34%, only Russell 2000 added 0.31%. Energy companies (XLE: +3.24%) and materials producers (XLB: +2.11%) were the leaders of growth. Technology (XLK: -2.19%) and telecommunication (XLC: -1.93%) sectors were the outsiders.

Shares of the Magnificent Seven ended trading in the negative, with only Tesla (TSLA: +0.04%) showing a purely symbolic rise.

A key pressure factor was the continued weakness in the technology sector, especially software (IGV ETF) and AI-related companies. One trigger for the decline was the release of a new tool from Anthropic for contract review, compliance and other tasks requiring legal support. The sell-off intensified amid concerns about AI competition, discussions about OpenAI funding commitments and the high concentration of technology sector securities in the indices, which increases the risk of forced position reductions by CTA funds. Semiconductor manufacturers, payment services and Chinese technology companies were under pressure, despite the positive dynamics of some securities after the publication of reports.

Gold rose by 6.1% and silver by 8.2%. This means that the recent sell-off was mainly caused by technical closing of positions and was not accompanied by deterioration of the fundamental background.

An additional positive signal was the approval by the House of Representatives and subsequent signing by Donald Trump of the funding package agreed with Senate Democrats, which effectively ended the partial government shutdown. The document extends funding for most agencies through Sept. 30, which is the end of the fiscal year. The Department of Homeland Security, meanwhile, is only funded through Feb. 13. The release of the jobs report, scheduled for Friday, remains delayed.

- PayPal (PYPL: -20.3%) reported worse-than-forecast EPS, revenue and transaction volume, while growth in the number of active accounts slowed to 1% YoY. An additional negative was the forecast of lower profits in the current quarter and 2026 as a whole, as well as the announcement of the CEO change amid management's admissions of problems with strategy execution, primarily in the branded checkout segment.

- Merck 's (MRK: +2.2%) fourth-quarter revenue and earnings beat average expectations thanks to strong sales of Keytruda, Gardasil and Winrevair. However, guidance for 2026 was more conservative than consensus due to the impact of the Cidara deal, which limited upside potential.

- Pfizer (PFE: -3.3%) exceeded EPS and revenue forecasts and confirmed its 2026 guidance. At the same time, Paxlovid sales were below expectations, and interim data on GLP-1 drug from the deal with Metsera triggered a cautious reaction from market participants.

- BlackRock Global Infrastructure Partners together with EQT AB are considering the acquisition of AES Corp.(AES: +9.2%). According to media reports, an agreement may be reached in the coming weeks, which increased expectations of a premium to the current valuation.

This article was AI-translated and verified by a human editor