Stocks Off Lows as Trump Taps Warsh as Fed Chair

Published as of: February 3, 2026, 9:13 a.m. ET

(Tuesday market open) Tech stocks were back in the driver's seat early today, igniting the broader market as earnings rolled in and economic data pointed to healthy U.S. growth. One possible speed bump is Washington, D.C., where the partial government shutdown delayed this week's jobs data, recalling last fall's chaos. However, the impasse is expected to be resolved within days.

With job openings data delayed by the shutdown, earnings take center stage. Palantir (PLTR) rocketed double digits this morning after the tech firm impressed investors, and Advanced Micro Devices (AMD) reports after the close. Alphabet (GOOGL) and Amazon (AMZN) come tomorrow and Thursday, providing a look at cloud trends and data center spending. Meanwhile, silver and gold finished licking their wounds after the recent historic sell-off and forged early gains, boosting mining stocks.

Major indexes climbed Monday in a broad, high-volume rally thanks to strong U.S. manufacturing data that reinforced ideas the economy is fit. Eight of 11 S&P 500 sectors rose, led by staples and industrials. Still, the S&P 500 Index didn't make a concerted effort to top the psychological 7,000 mark. The index has been stuck in a range for weeks even as earnings outpace expectations, slightly easing valuations. If this continues, the price-to-earnings, or P/E, ratio might ease to levels that look more appetizing to investors. Plenty of cash appears to remain on the table, if recent "buy the dip" action is any sign.

1. Dollar softness assessed: Amid all the recent hand wringing over the U.S. dollar's decline, it helps to have perspective. First, at current levels near 97, the dollar index isn't historically low, though it seems so compared with recent peaks above 110. Prior to Covid, it was rare to see the dollar index above 100, and it's still in the upper regions of its long-term band. Also, a lower dollar can positively affect earnings for major U.S. multinational firms, provided it stays at these levels a while. A weaker dollar makes U.S. products cheaper for international customers and can sometimes be a boon for U.S. equity markets. The flip side is that a slumping greenback can indicate less investor faith in the U.S. economy and more worries about growing debt and dysfunction in Washington. This week's shutdown didn't appear to immediately affect the dollar, which instead climbed on easing worries about Fed independence and Monday's strong ISM manufacturing data. Over time, lack of faith in U.S. fiscal policy can damage the dollar, and tariffs likely factored into last year's 10% dollar decline.
    
2. Crypto woes linked to Washington: President Kennedy said success has 1,000 fathers and failure is an orphan, but the recent crypto skid might not need a cheek swab to trace its parents. They include the government shutdown and the announcement of Fed chair nominee Kevin Warsh. A shutdown limits government purchases and government payrolls, and sops up liquidity, said Jim Ferraioli, director of digital currencies research and strategy at the Schwab Center for Financial Research (SCFR). During the 43-day shutdown last fall, bitcoin fell 10%. Another concern is Warsh's past criticism of the Fed's quantitative easing, or QE, programs, that expanded the Fed's balance sheet. Warsh wants to reduce the balance sheet, known as quantitative tightening (QT), which drains liquidity from the system. "Normally, as bonds mature on the Fed balance sheet, they are reinvested," Ferraioli said. "With QT, the money is just sent back to the Treasury, effectively reducing the money supply." That ultimately could mean less money to be invested across all assets, including crypto. This time around, a shutdown could have less impact than in late 2025, as the crypto market doesn't appear as stretched. Also, the Fed recently began to expand its balance sheet again, whereas it was still actively conducting QT last fall.
    
3. Shutdown delays data: It's déjà vu all over again, as a famous baseball player said, but this double-header is far from welcome. A government shutdown will prevent market participants from viewing key jobs data this week, including the critical January nonfarm payrolls report that was supposed to come out Friday morning. Everything is on hold for now as Congress grapples over what could be a close vote later today, but even rapid passage apparently won't come soon enough to give investors their data on time. Wall Street so far seems unfazed by the situation, with stocks up yesterday and rising again this morning. It's unclear when the data might become available, but any significant delay getting the shutdown resolved could lead to problems with data collection for the February jobs reports and market uncertainty. This could show up in rising volatility or a swing away from the dollar and into metals. As it is, Treasury yields rose today and tested recent highs, though this appears to be in reaction to yesterday's strong ISM manufacturing report.

• Palantir jumped more than 10% ahead of the open after topping Wall Street's consensus for both earnings and revenue. Palantir issued better-than-expected guidance and reported strong results in its AI-driven defense business. Overall, revenue jumped 70% year over year. Palantir expects annual revenue growth of 61% to around $7.19 billion, well above the consensus of $6.27 billion.
   
• Advanced Micro Devices rose nearly 2% early ahead of its earnings after the close. Last time out, AMD posted a forecast for strong revenue growth of more than 20% but received a muted response from Wall Street amid concerns that much of the increase has come from PC and server computer processors, Bloomberg reported. The company has stayed upbeat about AI growth and last November predicted 35% average revenue gains the next three to five years.
   
• Tesla (TSLA) climbed more than 1% following Monday's announcement that CEO Elon Musk's rocket company, SpaceX, had acquired Musk's AI company xAI. Investors expect a mid-year public offering of SpaceX stock, Barron's reported. The combination is worth about $1 trillion, and Tesla owns about 2%.
   
• Walt Disney (DIS) jumped 1.7% as the company announced that Josh D'Amaro, who headed the firm's theme parks and cruises, will become CEO to replace Bob Iger. Shares of Disney are down nearly half from the 2021 high.
   
• Mining shares including Newmont (NEM), and Freeport-McMoRan (FCX) rose more than 4% this morning as metals values got on the comeback trail. Hecla Mining (HL) added nearly 10%. Gold (/GC) rose 6% and silver (/SI) gained nearly 13%. Some of the gains might reflect dip buying after the massive sell-offs Friday.
   
• Rare earth stocks were up this morning after President Trump announced the launch of a $12 billion critical minerals stockpile, CNBC reported. USA Rare Earth (USAR) climbed 4%.
   
• PayPal (PYPL) crumbled nearly 16% ahead of the open after the company's earnings and revenue were weaker than expected and guidance disappointed. The company said in a release that its execution "has not been where it needs to be." It also announced a new CEO.
   
• Sandisk (SNDK) continued its meteoric ascent, rising another 15% Monday and 4% today, part of the rally in memory-chip stocks following strong earnings last week.
   
• Nvidia (NVDA) clawed back some of yesterday's losses amid questions about its relationship with OpenAI. Reuters now reports that OpenAI is looking for alternatives to some of Nvidia's AI chips. But OpenAI CEO Sam Altman said in a post that his firm loves working with Nvidia.
   
• Apple (AAPL) surged 4% Monday to nearly one-month highs in what appeared to be a delayed response to last week's strong earnings news. Evercore ISI reported 7% App Store year-over-year revenue growth for Apple in January.
   
• Bitcoin (/BTC) found some stability this morning, albeit at 10-month lows. It was up less than 1% in the early going.
   
• Merck (MRK) shares barely moved this morning after the company's results beat expectations. The stock had rallied into earnings. Investors might listen to the call for Merck's plans to deal with generic competition and patent expirations after the company recently suggested it could be on the acquisition hunt.
   
• Pfizer (PFE) sank more than 5% in early trading despite earnings coming in ahead of expectations. The company stuck by its relatively modest guidance that rattled shares late last year, CNBC reported.
   
• Archer-Daniels-Midland (ADM) slid 5% early after quarterly revenue fell short of analysts' expectations. The company said in its release it hopes "increased clarity on biofuel production" and the "evolution of global trade" can support a more constructive operating environment in 2026.

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The small-cap Russell 2000^® Index (RUT—candlesticks) was the worst performing major index last week as the rotation trade turned back toward tech. On Monday, tech barely climbed and the Russell resumed its previous pace, though one day isn't a trend. It remains comfortably above its 50-day and 100-day moving averages (blue and red lines), and its Relative Strength Index (RSI—bottom chart), which had been at very overbought levels above 70 earlier this month, is back to just over 54. If money continues flowing back into non-tech areas, Russell could benefit.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

February 2: December construction spending, January ISM Manufacturing Index and expected earnings from Walt Disney (DIS), IDEXX Laboratories (IDXX), and Palantir (PLTR).
February 3: December job openings and labor turnover survey (JOLTS), and expected earnings from Merck (MRK), PepsiCo (PEP), Pfizer (PFE), Eaton (ETN), Advanced Micro Devices (AMD), Amgen (AMGN), and Chubb (CB).
February 4: ADP January employment change, December factory orders, January ISM Services PMI^®, and expected earnings from Eli Lilly (LLY), AbbVie (ABBV), Novartis (NVS), Novo Nordisk (NVO), Uber Technologies (UBER), Alphabet (GOOGL), Qualcomm (QCOM), and Arm Holdings (ARM).
February 5: Expected earnings from Sony (SONY), ConocoPhillips (COP), Bristol-Myers Squibb (BMY), Barrick Mining (B), Amazon (AMZN), and Strategy (MSTR).
February 6: January nonfarm payrolls, January unemployment, February University of Michigan preliminary consumer sentiment, and expected earnings from Philip Morris (PM) and Biogen (BIIB).