Market Insights: Monday, February 2nd, 2026

Market Overview
US stocks kicked off February with a strong rebound on Monday as investors shook off last week’s sharp reversal in precious metals and refocused on improving macro data, a fresh US-India trade deal, and a heavy flow of corporate earnings. The Dow Jones Industrial Average surged roughly 1%, gaining more than 500 points, while the S&P 500 added about 0.5% and the Nasdaq Composite climbed roughly 0.6%, reversing early weakness in technology shares. The move marked a decisive risk-on response after Friday’s violent selloff in gold and silver rattled sentiment and raised questions about whether crowded trades were beginning to unwind more broadly. Instead, dip buyers once again stepped in aggressively, reinforcing the market’s underlying resilience as February began.

Precious metals remained volatile, continuing the roller-coaster ride that has unwound much of 2026’s strongest rally. Gold and silver both seesawed throughout the session following Friday’s historic collapse, with silver coming off its largest single-day drop on record and gold struggling to regain lost ground. Bitcoin also remained under pressure after sinking below $80,000 over the weekend for the first time since April, before stabilizing and finishing the session modestly higher. Despite the turbulence across metals and crypto, equities largely looked past the volatility, treating it as an isolated unwind rather than a signal of systemic stress.

Attention also remained fixed on the artificial intelligence trade. Shares of Nvidia fell sharply after CEO Jensen Huang downplayed reports that the company planned to invest $100 billion in OpenAI, following a Wall Street Journal report suggesting the plan was on hold. The pullback weighed on the broader semiconductor complex and contributed to what was one of the most broadly red sessions across the Magnificent Seven in recent weeks, with Nvidia leading declines. Even so, investors continued to view AI as a longer-term structural theme rather than a broken trade, particularly with several key earnings reports still ahead. Amazon, Alphabet, Advanced Micro Devices, and Palantir remain on the docket this week, keeping focus squarely on guidance and capital-spending plans. Elsewhere, Disney shares fell sharply after the company reported lower year-over-year profits despite beating adjusted earnings expectations, highlighting how rising costs continue to pressure margins across parts of corporate America.

On the macro front, stocks found support from unexpectedly strong manufacturing data. Both S&P Global and the Institute for Supply Management reported January Purchasing Managers’ Index readings that showed the sharpest increase in production since May 2022, reinforcing confidence that economic momentum remains intact despite lingering policy uncertainty. That optimism was bolstered further by a White House announcement that President Trump had reached a trade deal with Indian Prime Minister Narendra Modi, cutting the baseline US tariff rate on Indian goods to 18% from 25% and removing an additional secondary tariff after India agreed to halt purchases of Russian oil. The agreement helped ease global trade concerns after weeks of tariff-driven volatility. At the same time, uncertainty around Federal Reserve leadership lingered following Trump’s nomination of Kevin Warsh to lead the central bank, while the market also digested news that this Friday’s closely watched jobs report will be postponed due to a partial government shutdown. Taken together, Monday’s session reflected a market willing to look past short-term noise, reasserting bullish control as long as key technical levels continue to hold.

SPY Performance
SPY delivered a strong recovery session after an overnight dip was quickly bought. The ETF opened at $689.62, traded to an intraday high of $696.93, set a low at $689.43, and closed near the highs at $695.45, up 0.50% on the day. Trading volume totaled 74.47 million shares, slightly above average, reinforcing that the rebound was supported by solid participation. After briefly threatening another test of the $685–$688 support zone overnight, buyers stepped in decisively and pushed price steadily higher through the morning. Profit taking emerged after 2 PM, trimming gains off the highs, but SPY remained firmly above key support into the close, once again reinforcing the recurring theme that above $685, bulls maintain control.

Major Indices Performance
Gains were broad across the major indices. The Nasdaq rose 0.56%, supported by selective strength despite weakness across much of the Magnificent Seven. The Dow outperformed with a 1.06% gain, reflecting rotation into industrials and value-oriented names. The Russell 2000 advanced 1.03%, signaling improving participation beneath the surface after recent small-cap underperformance.

Notable Stock Movements
It was a mostly red session across the Magnificent Seven, led lower by Nvidia, which fell as much as 2.89%. Apple stood out as the strongest exception, rising as much as 4.04% and helping support broader market sentiment. Amazon and Alphabet also finished green, while the rest of the group lagged. Sustained weakness across both megacap technology and crypto would still be required to signal a more meaningful pullback.

Commodity and Cryptocurrency Updates
Commodities and crypto remained volatile. Crude oil fell 4.46% to $62.30, pulling back sharply after recent gains. Our model has been forecasting crude’s move toward $60 for several months, and while further downside is possible, holding above $56 keeps the door open for a future rally toward $70. Gold slipped 1.34% to $4,681, continuing its post-collapse consolidation. Bitcoin rebounded 2.06% to close above $77,900, signaling stabilization after the weekend selloff rather than a confirmed breakdown.

Treasury Yield Information
The 10-year Treasury yield rose 0.97% to close near 4.285%, adding incremental pressure to equities. In our framework, yields above 4.5% begin to create meaningful headwinds for stocks, while sustained trade above 4.8% often coincides with sharper selloffs. A move above 5% historically signals major equity risk, with a 20% or greater correction becoming likely near 5.2%. Monday’s move higher bears monitoring but did not disrupt the equity rebound.

Previous Day’s Forecast Analysis
Friday’s framework emphasized that volatility was elevated but that as long as SPY held above $685, bulls would retain control. We noted that sharp reversals and failed breakdowns were likely in the absence of a true macro shock.

Market Performance vs. Forecast
Monday’s action aligned with that outlook. SPY dipped overnight toward $686, found immediate support, and then reversed sharply higher, reinforcing once again that buyers are stepping in almost on command above $685.

Premarket Analysis Summary
In Monday’s premarket notes published at 8:50 AM, SPY was trading near $689.03 with a bullish bias above $690.25. Upside targets were outlined at $690.25, $691.75, $693, and $694.75, while downside levels sat at $687.75 and $685.25. The plan favored upside continuation if the bias level could be reclaimed, while acknowledging the potential for consolidation if it failed.

Validation of the Analysis
The session validated that roadmap. SPY reclaimed the $690.25 bias early, pushed through successive upside targets, and ultimately closed near the top of the day’s range. Downside levels were never meaningfully threatened after the opening rotation higher.

Looking Ahead
Tuesday brings JOLTS, followed by ADP and ISM on Wednesday, Unemployment Claims on Thursday, and a heavy labor report on Friday. Macro data will return to the forefront as markets assess whether economic strength can coexist with elevated rates and policy uncertainty.

Market Sentiment and Key Levels
Sentiment remains bullish but selective. SPY’s ability to hold above $685 keeps bulls firmly in control. Resistance sits at $697, $700, $701, and $702, while support rests at $692, $690, $688, and $685. The $697–$702 zone remains heavily defended and favors failed-breakout setups, while longs remain favored above $688.

Expected Price Action
SPY’s projected maximum range for Tuesday is $691 to $700, with the Call side dominating in a very narrow band that signals choppy price action with few trending periods. JOLTS is unlikely to move the needle materially.

Trading Strategy
As long as SPY holds above $688–$685, longs remain favored on pullbacks. Shorts are preferred on failed breakouts near $697–$700. With February historically prone to surprise selloffs, discipline and patience remain critical.

Model’s Projected Range
SPY’s projected maximum range for Tuesday is $691 to $700, with the Call side dominating in a very narrow band that signals choppy price action with few trending periods. Tuesday brings Jolts which is unlikely to do much to move the needle. PMI came in much better than expected but the market didn’t really care as it was already on a tear moving up off a large decline overnight that got bought up and pushed SPY back up 0.50% to close at $695.41. The market once again attempted to break $685 but stopped at $686 where the bulls stepped up to the plate and continued to until @ 2 pm when profit taking kicked in and pushed SPY off the day’s highs. We have repeated for weeks that above $685 the bulls control the market and the overnight pullback likely reflects macro noise or simple fatigue after a strong run, as the market consolidates before its next push higher, with $700 still firmly in play despite geopolitical headlines remaining a wildcard. Bulls continue to support price with remarkable consistency, stepping in almost on command. As long as SPY holds above $685, the path toward $700 remains intact. Volume was above average, which reinforces the move and the trend heading into the all important Jobs report on Friday. Overnight the bulls want to hold above $688 to maintain upside momentum, while bears are unlikely to engage unless $685 fails and even then would need a break of $680 to generate meaningful downside pressure. If $688 holds overnight, another attempt toward $700 is likely, though a strong catalyst may be required to clear that level. The long-term bull trend remains intact above $640, and with February historically prone to surprise selloffs, any deeper pullback should be viewed as a potential buy-the-dip opportunity for a spring or summer rally. Absent a catalyst, resistance sits at $697, $700, $701, and $702, while support is at $692, $690, $688, and $685. The $697–$702 zone remains heavily defended, favoring failed-breakout shorts, while longs are still favored above $688. Crypto finally rallied slightly today after selling off hard overnight and most MAG stocks declined, with the exception of Amazon, Alphabet and Google. Sustained weakness across both groups would be required for a larger pullback. VIX fell 6.31% to 16.34, remaining in risk-on territory. SPY closed inside a redrawn bull trend channel from the April lows, with structural support near $684.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the session in Bullish Trending Market State with SPY closing at MSI support. There were no extended targets at the close or for the entire day, with only a handful in the premarket at the day’s lows. Overnight the MSI rescaled lower to a bearish market state which was narrow and bouncing up and down without extended targets indicating the herd was not part of the decline. And sure enough just before the open, the MSI rescaled to a ranging state and SPY took off higher until it reached $695 where it once again rescaled to the current bullish state. Once that happened, SPY move sideways for the rest of the day. For Tuesday the MSI forecasts choppy trading which could dip back into the MSI ranging state and test lower levels. MSI resistance is $697.25 with support at $695.23.
Key Levels and Market Movements:
Friday we stated, “the primary trend remains bullish as long as SPY holds above $685, and the bulls continue to step in and defend that level,” and added, “above $685, the bulls have full control, and the bears struggle to gain traction,” while also noting, “The bias for Monday favors selling failed breakouts above $695 and buying dips down to $685.” With the MSI opening in a wide Ranging State and price resting right at MSI resistance turned support, the correct approach was patience, as we generally do not favor trading while the MSI is ranging, but given the broader context and the clear defense of the $686–$690 zone, buying the dip off $690 and again on the retest above $686 made sense. Using the premarket levels for first and second targets was the correct framework, and trailing the position as the MSI rescaled higher allowed traders to stay aligned with the dominant trend. While the structure was not perfect and price action remained choppy, the failed breakout near $697 combined with the developing double top and the post market plan presented a reasonable short opportunity, particularly given the absence of extended targets and the narrow bullish MSI range. This session once again reinforced the importance of context, patience, and flexibility, using the MSI, premarket levels, and market structure together to guide execution rather than forcing trades where conditions are less than ideal. These were the only clean and actionable setups of the day and it was identified by following the premarket levels, post-market roadmap, and MSI signals within our established framework for structure, trend, and execution. Once again, the MSI proved its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Tuesday has only JOLTS, which is unlikely to move the market. This week also includes earnings from several large companies, which could continue to support higher prices. That said, remain aware of global events, as they could shape price action ahead of Friday’s jobs report. Absent an external catalyst, the primary trend remains bullish as long as SPY holds above $685, and the bulls continue to defend that level. This reinforces what we have said for weeks: above $685, the bulls have full control, and the bears struggle to gain traction. A sustained hold above $695 opens the door for a push toward $700 and potentially higher. The bias for Tuesday favors selling failed breakouts above $697 and buying dips down to $688. Expect choppy price action and let the MSI determine the intraday trend as it rescales. For the bears to regain any meaningful traction, SPY must break below $680 and remain there. The long-term bull trend remains intact above $640. Failed breakouts and failed breakdowns continue to offer the highest-probability setups, so remain flexible, avoid trading during Ranging Market States, and ensure all trades are fully aligned with MSI signals. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate trade quality. If you haven’t yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.

Dealer Positioning Analysis

Dealers are selling SPY $696 to $715 and higher strike Calls while also selling $693 to $695 Puts indicating the Dealers’ belief that prices will only move higher on Tuesday. Dealers do not sell ATM Puts unless they strongly believe the market will continue to rally. The ceiling for Tuesday appears to be $700. To the downside, Dealers are buying $694 to $635 and lower strike Puts in a 3:1 ratio to the Calls /Puts they’re selling/buying displaying some concern that prices could move lower. Dealer positioning is unchanged from neutral/slightly bearish to neutral/slightly bearish.
Looking Ahead to Friday:
Dealers are selling SPY $696 to $720 and higher strike Calls indicating the Dealers’ belief that prices may stagnate a bit later this week. The ceiling for the week appears to be $699, although if that is breached, $705 is the next level up. To the downside, Dealers are buying $695 to $585 and lower strike Puts in a 4:1 ratio to the Calls they’re selling, reflecting a market that is a slightly concerned about lower prices but not overly so. For the week Dealer positioning is unchanged from slightly bearish to slightly bearish. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.

Recommendation for Traders
Into Tuesday, respect the bullish structure but remain selective. Favor buying pullbacks that hold above $688 and selling failed breakouts near $697–$700. Avoid trading during choppy, non-trending conditions and let structure, confirmation, and MSI signals guide execution rather than headlines.

Good luck and good trading!