Daily Market Outlook - Friday, Feb. 6

By Patrick Munnelly of Tickmill

Friday, February 6, 2026 6:15 AM EST

Chart, Trading, Courses, Forex, Analysis

Image Source: Pixabay

A sharp sell-off has shaken the tech sector, hitting software stocks and cryptocurrencies amid weak labour market data and doubts about AI-driven valuations. Bitcoin plunged nearly 50% from its October peak to $63,500, while Amazon shares fell post-earnings. The S&P 500 dropped 1.2%, and the Nasdaq 100 saw its worst three-day decline since April, shedding over $1 trillion in value after the Fed signalled no imminent rate cuts. Treasury bonds rallied, pushing two-year yields to a monthly low, while silver plummeted 16%. Alphabet’s stock also slid despite exceeding revenue expectations, as aggressive AI spending plans raised profitability concerns. Broader markets suffered, with nine of 11 S&P 500 sectors declining and the equal-weighted index retreating from record highs. Weak labour data added to market worries, with job openings hitting a three-year low, layoffs rising, and jobless claims exceeding forecasts. Economic uncertainty and scepticism over AI’s returns are driving market volatility, forcing investors to reassess strategies. Asian markets found some footing after early losses on Friday, but caution lingered among investors, particularly in the tech sector. Amazon shares took a sharp hit, plummeting 11% in after-hours trading. The company’s ambitious plan to pour $200 billion into artificial intelligence this year has sparked worries that such a hefty investment might not yield long-term rewards. Market volatility was on full display; Korean stocks took centre stage as the KOSPI experienced a dramatic 5% plunge early on, prompting a temporary trading suspension. In other markets silver rebounded 4.1% after suffering a steep 20% drop on Thursday. Bitcoin followed a similar rollercoaster trend, climbing over 3% after dipping to just above $60,000—less than half of its peak from October. Elsewhere, investors are betting on a win for Japanese Prime Minister Takaichi’s ruling LDP party in the upcoming election. This optimism has driven a surge in Japanese stocks while pressuring the yen and government bonds. The Nikkei 225 index reflected this sentiment, rising 0.5%.

A narrow 5-4 vote to keep the Bank Rate at 3.75% highlighted a dovish shift in the BoE's February communications, deviating from the expected 7-2 decision. Mann aligned with hawks Pill, Lombardelli, and Greene, joining Bailey in watching for a potential rate cut majority. The Committee remains divided, with Breeden advocating early cuts as ‘insurance’ and Lombardelli warning against cutting prematurely. Guidance suggests further cuts are a ‘closer call,’ while Ramsden and Taylor hint at a neutral rate of 3%, indicating room for easing. The MPR projects weaker demand, with the economy 0.8ppts below potential by 2027 and unemployment rising to 5.3%, reducing labour market-driven inflation risks. Wage growth projections are moderating, with settlements dropping to 3.4% for 2026, near the 3.25% target-consistent rate. January’s CPI data on 18 February could be pivotal, as a sharper-than-expected drop in inflation may push Bailey to join the dovish camp in March.

The ECB meeting on Thursday held the Deposit rate at 2.0%, with President Lagarde adopting an optimistic stance on growth and inflation. While acknowledging risks, she highlighted a strong labour market and increased defence and infrastructure spending as growth drivers. January's softer inflation was downplayed, aligning with forecasts. Lagarde reiterated the ECB’s “data-dependent but not data-point dependent” approach, emphasising balanced risk scenarios. On euro strength, she noted its stability since last spring and its alignment with historical averages, already factored into ECB projections. She also stressed the euro’s potential global role, supported by trade agreements with Mercosur and India, reforms to the ECB’s liquidity framework, and expanded repo lines for non-euro central banks. The ECB’s institutional independence remains crucial in a transactional global economy.

Jobs Friday arrives without a jobs report due to the U.S. government shutdown delaying non-farm payroll data. Wall Street’s selloff has shaken global markets, heightening investor concerns. Signs of labour market strain have fuelled speculation that the Federal Reserve may ease monetary policy. A report from Challenger, Gray & Christmas highlighted January layoffs at their highest in 17 years, adding to the tension. While the Fed is expected to hold rates steady, market anticipation for a potential rate cut is rising. CME Group’s FedWatch tool shows a 22.7% probability of a 25-basis-point cut at the March 18 meeting, up from 9.4% the previous day.

Overnight Headlines

US Treasury Yield Curve Heads For Steepest Level In Four Years
BoJ’s Masu: Timely Interest Rate Hikes Needed To Normalise Policy
RBA’s Gov Bullock: Govt Spending Contributing To Rising Inflation
India Holds Rates After US Trade Deal Boosts Growth Outlook
Big Tech’s ‘Breathtaking’ $660B Spending Spree Reignites AI Bubble
Oracle’s Bond Sale Spurs AI Borrowing Wave, Goldman Says
Amazon Boosts Spending Far Ahead Of Estimates On AI Build-Out
Apple Scales Back Plans For AI-Based Health Coach Service
Reddit Projects Strong Ad Sales, Authorises Share Buyback
BYD’s $60B Wipeout Points To Deeper Turmoil For China EVs
Trump Softens Criticism Of UK Deal On Diego Garcia Control
Argentina Says It Signed US Trade Deal With Trump
Bitcoin Plunges To Near $60,000 Before Paring Losses In Asia
Michael Saylor’s Crypto Project Hit By $12.4B Loss
Russia’s FM Slams Macron Diplomacy As ‘Pathetic’ After Envoy Visit

FX Options Expiries For 10am New York Cut

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

EUR/USD: 1.1800 (EU3.73Ò), 1.2000 (EU3.27b), 1.2050 (EU1.15b)
AUD/USD: 0.6875 (AUD913.6m), 0.6950 (AUD864.9m), 0.6790 (AUD749.2m)
USD/JPY: 156.00 ($991.9m), 157.00 ($808.8m), 140.00 ($530.1m)
USD/CAD: 1.3800 ($785.8m), 1.3700 ($696.1m), 1.3600 ($663.7m)
USD/BRL: 5.4000 ($339.2m)
GBP/USD: 1.3650 (GBP325.2m)
USD/KRW: 1420.00 ($360m)
USD/CNY: 6.9000 ($300m)
EUR/GBP: 0.8635 (EU300.7m)
USD/MXN: 17.85 ($402m)

CFTC Positions as of January 30th:

.Equity fund speculators have increased their net short position in the S&P 500 CME by 20,307 contracts, bringing the total to 420,688. Meanwhile, equity fund managers have raised their net long position in the S&P 500 CME by 27,365 contracts, resulting in a total of 909,993 contracts.
Speculators have reduced their net short position in CBOT US 5-year Treasury futures by 45,473 contracts, now totaling 2,091,046. Conversely, they have increased their net short position in CBOT US 10-year Treasury futures by 70,511 contracts, reaching 726,151 contracts. There has also been a reduction in the net short position for CBOT US 2-year Treasury futures by 6,123 contracts, now at 1,218,999. Furthermore, speculators have boosted the net short position in CBOT US UltraBond Treasury futures by 14,649 contracts, bringing it to 273,471. They have trimmed their net short position in CBOT US Treasury bonds futures by 14,903 contracts, which now stands at 8,167.
Bitcoin's net long position is recorded at 690 contracts. The Swiss franc has a net short position of -42,893 contracts, while the British pound shows a net short position of -16,162 contracts. The euro has a net long position of 132,134 contracts, and the Japanese yen has a net short position of -33,933 contracts.