Tech Drives Equity Reversal as Palantir’s Beat and India Trade Deal Fail to Support Bulls: Feb. 3, 2026

Bifurcated action is characterizing today’s Wall Street trading as tech surrenders the floor to cyclicals even as Palantir delivered a blockbuster beat and raise last night, which initially boosted optimism regarding AI prospects. The Dow Jones Industrial Average hit a fresh record high in what was a short-lived broad rally subsequent to the opening bell prior to the S&P 500 and Nasdaq 100 benchmarks taking significant dives following slight advances. The Russell 2000, meanwhile, is outperforming amongst the major indices after several sessions of sluggishness as shares within the basket, which are relatively sensitive to the stance of monetary policy and the health of the economic cycle, are being supported by a surprise trade deal yesterday between Washington and New Delhi. The agreement is likely to contribute to the quelling of inflationary pressures in goods while raising confidence about the outlook going forward. Additionally, it gives President Trump a strong win in the Far East, securing a treaty with the world’s fifth-largest economy and incrementally distancing India from rivals in Moscow and Beijing. Yields are rising modestly as a result throughout the curve, with fixed-income watchers responding to the news by dialing up growth projections. The greenback is slightly lower; however the commodity complex is bullish across the board ex lumber, with gold and silver rebounding aggressively from recent selloffs. Elsewhere, volatility protection instruments are catching bids as investors weigh whether a struggling tech sector signals turbulence somewhere along the line.

Economic Data Might Support Bulls Tomorrow

Yesterday’s colossal beat on ISM-Manufacturing, which saw its strongest reading in almost four years, bolstered investor sentiment and added intraday fuel to the fire of a broad equity rally. But today’s empty domestic economic calendar couldn’t serve any positive developments to Palantir’s terrific earnings report and the Indian trade deal. Tomorrow is a different story; however, as ADP-Employment and ISM-Services are expected to reflect that consumer spending remains buoyant against the backdrop of stable hiring amidst subdued unemployment. Those results can propel the broadening, reacceleration theme while investors will likely wait for additional Magnificent Seven prints after the bell on Wednesday and Thursday from Alphabet and Amazon to gauge the momentum of AI, the modern technology’s potential to deliver robust returns and finally, whether to raise, maintain or reduce tech exposures as a result. Overall, it appears participants need to see spectacular performances to boost shares in the AI space, as enormous capital expenditures without large corresponding contributions to  bottom lines are punishing certain names. 

International Roundup

South Korea Inflation Hits Target Despite a Weak Won

South Korea’s year-over-year (y/y) inflation, which has been intensified by a declining won, eased in January, although price pressures relative to December picked up marginally, according to the Consumer Price Index. Relative to the year-ago period, the index was up 2% y/y, matching the Bank of Korea’s medium-term inflation target and falling below the 2.1% economist consensus estimate. It was the lowest reading since August, when the metric rose 1.7%. Meanwhile, prices were 0.4% higher month over month (m/m), matching the consensus estimate after December’s 0.3% result.

For the m/m release, the following categories and the extent of their changes had the largest impact on the headline result:

• Miscellaneous goods and service, 2.8%
• Health, 1%
• Recreation and culture, 0.6%
• Food and non-alcoholic beverages, 0.6%
• Furnishings, household equipment and routine maintenance, 0.5%
• Alcoholic beverages and tobacco, 0.4%

The transport category was the only decliner with prices dropping 0.9%.

The Bank of Korea last month decided to maintain its current key interest rate and signaled that its easing campaign was over.

Hong Kong Sales Accelerate Modestly

December retail sales in Hong Kong were up 6.6% y/y after November’s 6.5% climb, according to the Census and Statistics Department. A Hong Kong spokesman explained that the December result points to a continuation in the special administration region’s recovery. Hong Kong anticipates additional growth due to economic expansion and larger volumes of visits by foreign tourists. In December, online sales jumped 30.9% compared to the 28.4% growth in November. Other categories with stronger sales and the amount of their growth included the following:

• Jewelry, watches, clocks and valuable gifts, 14.3%
• Motor vehicl4.6% and parts, 8.9%
• Other consumer goods not elsewhere classified, 7.5%
• Books, newspapers, stationery and gifts, 6.7%
• Commodities in supermarkets, 0.3%

On the other hand, wearing apparel decreased 10.3% and department store sales sank 4.6%. Fuel sales were lower by 12.8% and footwear sank 10%. Cashier activity for furniture and fixtures also weakened, sinking 7.9%.

Australia Hikes Key Rate

The Reserve Bank of Australia decided yesterday to make its first rate hike in two years by pushing its cash target benchmark from 3.6% to 3.85%. When announcing the decision, RBA Governor Michele Bullock said when considering domestic and global conditions, the bank determined that the monetary policy change was required. Otherwise, it would take too long for the organization to reach its inflation target. In December, the country’s annualized headline inflation jumped from 3.4% to 3.8%.

As Construction Plans Sink

Australia’s building approvals sank 14.9% m/m in December, a significantly worse print than the 6.2% decline anticipated by economists and a reversal from November’s 13.1% gain. Relative to the year-ago period, approvals were only 0.4% higher. They were up 19.4% y/y in November.