Today, results are due from AMD, Merck & Co, PepsiCo, Amgen, Pfizer, Eaton Corporation, Chubb, Emerson Electric, TransDigm, and PayPal. 

After Monday's choppy session, stocks steadied. The S&P 500 and Dow closed near record levels, and the Nasdaq finished 0.5% higher. On Tuesday morning, futures were mixed but calm: Dow E-minis are flat, S&P 500 E-minis are up 0.2%, Nasdaq 100 E-minis rose 0.5%.

Monday started with the kind of nervousness that spreads after a bad Friday, when investors start to suspect that the selling wasn't just "profit-taking" or "healthy rotation" but something uglier: a purge. Gold, silver, and parts of the technology sector had been hit hard at the end of last week, and Monday's opening suggested the damage might continue. Across Western markets, prices started in the red. The same pattern appeared in precious metals and cryptocurrencies. 

And then, the mood flipped.

Part of the reversal was technical. As the last short positions were liquidated, the downward pressure eased. But what mattered wasn't the mechanics, it was the signal. Precious metals, after a rough start to the night, clawed their way back into positive territory. That alone restored a measure of calm, because gold and silver aren't just assets, they're emotional barometers. When they stop falling, investors start telling themselves the world hasn't actually ended.

Europe followed. Within two hours, the Stoxx Europe 600 had recovered and was back in the green. Wall Street futures, which had been deep in the red during the Asian session, used the lull in Europe as a lifeline and pared back losses. When New York opened, the bounce became immediate: it took only a few minutes for U.S. indices to turn positive. By the close, the S&P 500 was up 0.54%, ending three consecutive losing sessions. The day's overall picture was oddly synchronized: equities rebounded, metals rebounded, cryptocurrencies rebounded, and the VIX, the volatility index that serves as a proxy for market nervousness, declined.

If you only look at the closing numbers, you might think this was a return to confidence. It wasn't. It was a return to manageability. Traders generally prefer sessions that start low and finish high, not because they need markets to rise to make money, but because that pattern is psychologically easier to navigate than the reverse. Monday offered that relief: the sense that the panic could be contained, that Friday's losses would not automatically turn into something worse.

But the details inside the rebound were less comforting than the headline. Technology stocks, for instance, did not recover uniformly. That is not a small point. It suggests investors still have doubts about the biggest platforms' strategies around artificial intelligence. Nvidia, Microsoft, and Meta lost ground even as the broader market improved. Alphabet and Apple advanced. Alphabet, in fact, is now less than 10% away from taking back the title of the world's largest market capitalization from Nvidia. In a different era, that would be an astonishing fact. In this one, it's a reminder that the AI boom has stopped being a single-company story and has become a broader fight over who controls the next phase of computing - and who merely pays for it.

Even the earnings reports released after the close didn't bring much clarity. Companies tied more or less directly to the AI surge produced a scatterplot of market reactions: Teradyne and Palantir surged, while Rambus, Fabrinet, and NXP fell sharply. 

Outside of tech, another signal appeared: oil prices fell, based on assumptions that tensions surrounding Iran might be de-escalating. The energy sector became the poor relation of the session. That combination, stocks rising while oil falls, can look like good news, and in some ways it is. Lower oil can mean less inflation pressure and less geopolitical risk premium. But it also shows how much of this market is built on stories rather than settled facts.

Underneath all of this sits the bigger question that markets are increasingly forced to confront: not what the Federal Reserve will do this month, but what it will become next year. The designation of Kevin Warsh as Jerome Powell's successor at the Fed next spring continues to fuel speculation, and it will for weeks. Investors will probe Warsh's intentions the way anxious people probe a new boss's facial expressions. It is already being whispered that Warsh will not simply be his predecessor's echo. And his reported plans to shrink the Fed's balance sheet sit uneasily with some White House objectives. Translation: there may be tension between a central bank that wants to tighten and a political system that prefers comfort.

That tension matters because the market is already shifting its expectations about rate cuts. Surprisingly buoyant U.S. manufacturing data, combined with the Warsh speculation, pushed bond yields higher. The U.S. 10-year yield returned to the 4.3% threshold. The market is increasingly doubtful about the timing of Fed rate cuts. The theory that easing could begin as early as Warsh's first meeting - June - is now only barely holding a slim majority. Ed Yardeni no longer believes it. If that sounds like a niche debate among macro obsessives, it isn't. Rate-cut expectations are the scaffolding holding up many asset prices. When that scaffolding shifts, even slightly, the entire structure starts to creak.

Still, there is an irony here that deserves more attention. The flip side of "fewer rate cuts" is not automatically disaster. It can also mean something simple and, frankly, healthy: the U.S. economy doesn't need rate cuts to remain dynamic. In other words, the market may be losing a comforting fantasy, but it might be doing so because the underlying economy is sturdier than feared.

In other news, the United States decided to cut tariffs imposed on India from 25% to 18% after a meeting between Trump and Modi. Modi is said to have agreed to stop buying Russian oil, though the timetable remains unclear. That one sentence contains a whole era: tariffs used as bargaining chips, geopolitics folded into energy markets, and major commitments made with just enough vagueness to leave everyone room to maneuver later.

In Asia-Pacific, the news flow shaped index performances in a way that bordered on exuberant. Stabilization in U.S. indices and precious metals drew investors back into bargain buying in technology. 

Today's economic highlights:

Today's agenda includes: building permits, the RBA interest rate decision, and the press conference in Australia; inflation in France; unemployment change in Spain; in the United States, Barkin's speech, JOLTs job openings, and API crude oil stock change; the Ai Group Industry Index in Australia. See the full calendar here.

  • Dollar index: 97,495
  • Gold: $4,907
  • Crude Oil (BRENT): $66.29 (WTI) $62.17
  • United States 10 years: 4.29%
  • BITCOIN: $78,175

In corporate news:

  • Waymo, Alphabet's autonomous driving unit, was valued at $126 billion after raising $16 billion in a new funding round.
  • Tesla is offering its all-wheel-drive Model Y in the United States at a price of $41,990.
  • Boeing and GE Aerospace are facing a sealing issue affecting the GE9X engines used on the 777X program, according to Bloomberg.
  • SpaceX has acquired xAI in a $250 billion deal, creating a combined entity valued at about $1.25 trillion.
  • Amazon said long delays in securing European power grid connections are hindering its ability to expand AWS data centers.
  • Pfizer beat fourth-quarter profit estimates as strong demand for older drugs like Eliquis offset declining COVID-19 product sales.
  • Eaton forecast 2026 profit below expectations due to weak industrial demand, sending its shares lower despite a quarterly earnings beat.
  • PayPal warned 2026 profit would fall short of estimates after missing holiday-quarter earnings and revenue expectations, while naming Enrique Lores as incoming CEO.
  • WTW exceeded fourth-quarter profit estimates on strong growth in its risk and brokerage unit, benefiting from higher insurance demand.
  • CME Group reported a record January trading volume of 29.6 million contracts, up 15% year over year.
  • Merck forecast 2026 sales and earnings below estimates due to looming patent losses, despite a solid quarter driven by Keytruda.
  • PepsiCo said it will cut prices on snack brands like Lay's and Doritos in the U.S. to address consumer affordability concerns while maintaining its outlook.
  • Marathon Petroleum beat fourth-quarter profit estimates as rebounding refining margins sharply boosted earnings.
  • X faced increased regulatory pressure in France after police raided its Paris office and summoned Elon Musk over investigations tied to algorithms and Grok-related deepfake content.
  • Netflix came under U.S. Senate scrutiny over its proposed acquisition of Warner Bros Discovery, with lawmakers raising competition concerns.
  • Meta's WhatsApp faced renewed scrutiny from India's Supreme Court over its user data-sharing policy.
  • HP plc appointed Bruce Broussard as interim CEO following Enrique Lores' departure.

Analyst Recommendations:

  • Becton, Dickinson And Company: Citi upgrades to buy from rating suspended with a target price of USD 233.
  • Exxon Mobil Corporation: BNP Paribas downgrades to underperform from neutral and raises the target price from USD 114 to USD 125. 
  • Fair Isaac Corporation: Baptista Research upgrades to buy from hold and reduces the target price from USD 2039.40 to USD 2029.50.
  • Fedex Corporation: Wells Fargo upgrades to overweight from equalweight and raises the target price from USD 295 to USD 380.
  • Lockheed Martin Corporation: DZ Bank AG Research downgrades to hold from buy and raises the target price from USD 570 to USD 665.
  • Mastercard, Inc.: Daiwa Securities upgrades to outperform from neutral with a price target raised from USD 605 to USD 610.
  • Newmont Corporation: Morgans Financial Limited upgrades to buy from accumulate with a price target raised from AUD 162 to AUD 190.
  • Palantir Technologies Inc.: Baird upgrades to outperform from neutral with a target price of USD 200.
  • Sofi Technologies, Inc.: JP Morgan upgrades to overweight from neutral with a target price of USD 31.
  • Southwest Airlines Co.: Zacks upgrades to outperform from neutral with a target price of USD 55.
  • Stellantis N.v.: Morgan Stanley downgrades to market weight from overweight and raises the target price from EUR 8.50 to EUR 9.20. 
  • Blackrock, Inc.: CICC maintains its outperform recommendation and raises the target price from USD 1000 to USD 1250.
  • Coterra Energy Inc.: Wolfe Research maintains its outperform recommendation and raises the target price from USD 33 to USD 40.
  • Flagstar Bank: Autonomous Research maintains its neutral recommendation and raises the target price from USD 13 to USD 16.
  • Intel Corporation: Daiwa Securities maintains its neutral recommendation and raises the target price from USD 41 to USD 50.
  • Pinterest, Inc.: Mizuho Securities maintains its outperform recommendation and reduces the target price from USD 45 to USD 35.
  • Robert Half Inc.: BNP Paribas maintains its underperform recommendation and raises the target price from USD 22 to USD 26.50.
  • Charles Schwab: CICC maintains its outperform rating and raises the target price from USD 88 to USD 120.
  • Servicenow, Inc.: Baptista Research maintains its buy recommendation and reduces the target price from USD 1138.50 to USD 227.70.
  • Teradyne, Inc.: Evercore ISI maintains its outperform rating and raises the target price from USD 200 to USD 280.
  • The Trade Desk, Inc.: KeyBanc Capital Markets maintains its overweight recommendation and reduces the target price from USD 88 to USD 40.
  • United Parcel Service, Inc.: Argus Research Company maintains its buy recommendation and raises the target price from USD 105 to USD 130.
  • Zoominfo Technologies Inc.: Jefferies maintains its buy recommendation and reduces the target price from USD 16 to USD 12.