Market Recap - Week of February 2 through February 6, 2026

The S&P 500 index slipped 0.1% this week as declines led by the consumer discretionary sector slightly outweighed gains in the consumer staples amid mixed earnings reports.

The S&P 500 ended the week at 6,932.30 and is up 1.3% for the year.

The slim weekly move came as investors sifted through a mixed bag of quarterly earnings reports and guidance. Companies including Hershey (HSY) and PepsiCo (PEP) reported quarterly results above analysts' expectations, while others, including online retail giant Amazon.com (AMZN), delivered some disappointments.

On the economic front, ADP reported that employment in the US private sector increased less than projected in January. Investors continue to await government data on January's jobs after the Bureau of Labor Statistics pushed back its monthly payrolls report to Feb. 11.

US consumer sentiment remained low compared with year-ago levels amid persistent concerns related to inflation and the labor market, preliminary results from a University of Michigan survey showed.

Amazon had the largest percentage drop in consumer discretionary, falling 12% on the week as the company posted Q4 earnings per share below analysts' mean estimate. Amazon forecast operating income of $16.5 billion to $21.5 billion for the current quarter; at the midpoint, this was about $3.5 billion below expectations, according to Wedbush Securities analysts. (Maybe the boycotts of Amazon/Whole Foods are having some effect.)

Last Week’s Economic Reports

JOLTS job openings fell to 6.5 million, down from 6.9 million last month.
ISM mfg. PMI rose to 52.6 from 47.9
January's new vehicle sales declined 2.7% year over year

Up Next

Next week's earnings schedule features Coca-Cola (KO), Cisco Systems (CSCO), McDonald's (MCD), T-Mobile US (TMUS), Applied Materials (AMAT), and Arista Networks (ANET), among other companies.

The focal point of the economic calendar will be the January jobs report on Wednesday. Other economic data due next week will include the January consumer price index, a key inflation measure, on Friday.

S&P 500 Sector and Stylebox Returns

How to read the stylebox: The horizontal axis represents investment style, which can be value, blend, or growth for stocks and mutual funds. The vertical axis represents market capitalization for stocks, categorized into large, medium, and small companies. The number in each box represents the percentage growth of the category that is the intersection of the column and the row. For example, large-cap value is in the top-left corner box of the 9 boxes, so the large-cap value category is up (or down) by the percentage shown in that box.

Thought of the Week

Another government shutdown; another batch of delayed economic data. The most anticipated report last week was the January jobs report, now due out this Wednesday. Our models suggest the economy added 52k jobs in January, although annual revisions may have cut ~1 million jobs from March 2025 payrolls. The unemployment rate likely held steady at 4.4% but could have ticked lower.

The unemployment rate should be the key labor market gauge guiding monetary policy in 2026. A spike in unemployment could increase the likelihood of rate cuts. However, the Census Bureau (CB) population projections suggest it should remain low. In its 2023 projections of population growth with low immigration, the CB assumed net migration of 389k for the year ended June 2026. The population still grew by 82k monthly in this scenario, but entirely due to growth in the 65+ population. The working-age population (18–64) was expected to decline by 14k per month. Updated projections recently cut the net migration estimate to 321k. Reduced immigration disproportionately impacts the supply of working-age individuals, as ~70% of immigrants fall into this cohort, and new estimates indicate a 19k monthly decline in the working-age population. In turn, the total labor force (16+) could grow by just 35k per month, or 0.02%, in 2026, assuming the participation rate holds at 62.4%. If so, household employment would need to grow just 33k monthly to keep the unemployment rate steady. In 2025, it grew 200k per month.

Even if labor demand remains sluggish, a constrained labor supply should cap the unemployment rate. Labor demand might even surge temporarily in 1H26 alongside fiscal stimulus, putting downward pressure on the unemployment rate. This, in turn, should limit Federal Reserve rate cuts to two or fewer over the course of 2026

Source: JP Morgan (edited)

Thank you to all who attended this month's market Update webinar!

You can watch the replay here:

https://www.youtube.com/watch?v=816v5DohZiE

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