- US Markets
U.S. equities rebounded on Friday, clawing back much of the losses earlier in the week. The S&P 500 rose 1.97%, the Nasdaq gained 2.15%, and the Russell 2000 jumped 3.6% after a violent midweek selloff. Though, for the first week of February, SPX was down 0.1%, Nasdaq declined 1.87%. Russell 2000 was up 2.17% for last week. The retreat was triggered by heavy selling in tech, particularly software and momentum-driven names.
At its worst, the S&P 500 was down only about 3.17% from its all-time high. Volatility spiked as momentum unwound, leading to a brief break below the 100-day SMA. Though, that move proved to be short-lived. On Friday, aggressive buying pushed the index back above its 50-day SMA, marking its biggest daily gain since May, with nearly 400 stocks advancing. Crowded tech, AI and crypto exposures bore the brunt of the selling, while capital rotated into areas tied more closely to real-economy activity. Homebuilders, transportation stocks, industrial machinery, chemicals and consumer staples all outperformed, with several logging their strongest weekly gains in years. The Dow, with its heavier industrial tilt, outperformed the Nasdaq 100 and crossed 50,000 on Friday, while equal-weighted indexes held up far better than cap-weighted benchmarks.
The rebound of Friday seemed to be driven by short covering more than fresh long buying as heavily shorted stocks such as Nvidia led the move, while risk‑parity and volatility‑control funds cut exposure, amplifying the squeeze. As volumes faded through the session, long‑only investors largely stayed on the sidelines.
Options positioning paints the same picture. Supportive gamma above $6,900–$6,950 helps limit volatility, but $7,000 remains a cap on upside. Meanwhile, heavy put interest near $6,800 continues to pull prices lower during selloffs, keeping dispersion elevated despite calmer headline volatility.
For the week ahead, investors will be watching the delayed NFP being released on Wednesday and the CPI data releasing on Friday. Several mega‑cap consumer, healthcare, energy, and tech names are reporting earnings this week like Coca-Cola, AstraZeneca, Cisco, Applied Material, Arista Network. On the technical front, SPX has firm resistance at the psychological level of $7,000. The index has support at the 50-day SMA of $6,885, with the next support at last week’s low of $6,780.
- U.S. Dollar Index
The U.S. Dollar Index (DXY) fell by 0.27% on Friday, with Monday’s Asian session seeing further weakness as the currency slipped 0.34% to the 97.35 level. Consequently, the EUR/USD has risen more than 0.35% today to surpass 1.1850 during today’s early session.
The dollar has slipped as traders adopt caution ahead of delayed economic data due to the partial government shutdown. The January nonfarm payrolls report is now scheduled for release on Wednesday, with an expected gain of 70,000 jobs, up from 50,000 last month, while the unemployment rate is expected to remain steady at 4.4%. Adding to the headwinds, traders are increasing their bets on the Federal Reserve easing policy this year. According to the CME FedWatch tool, fed funds futures are now pricing in about 18% odds of a 25-bps rate cut, compared to 10.4% odds from a week ago.
From a technical standpoint, the dollar is declining for the second straight session, falling under the 9- and 21-SMA levels on the daily chart, suggesting a weaker short-term market structure. Additionally, Friday created a bearish engulfing candle on the daily chart, suggesting a potential trend reversal. Upside for the index could be seen only if potential resistance levels around 97.738 from the 21-day SMA or 97.986 from last week’s high are broken. For the EUR/USD pair, potential resistance remains around the 1.1890 level, based on a long-term downward-sloping trendline that the currency failed to break above in late January.
- Gold and Silver
Precious metals start the week on a positive note. Gold is trading up 1.2% and has risen above the key $5,000 level, its highest in over a week. It has recovered around half of its losses since plunging from an all-time high on Jan. 29. Silver is up 5% today, holding above the $80 mark, after gaining nearly 10% on Friday.
Gold’s ability to stabilise above the $5,000 threshold will be critical to a more sustainable advance. It gained a vote of confidence from the People’s Bank of China’s addition of more bullion to its reserves in January, the 15th straight month that the holdings have expanded. Upcoming U.S. economic data, including the January jobs report and inflation data, will provide greater clarity on the Fed’s policy direction. Labour markets are soft, and San Francisco Federal Reserve President Mary Daly said on Friday that she thinks one or two more interest rate cuts may be needed to counteract labour market weakness. Investors expect at least two 25-basis-point rate cuts in 2026, with the first one expected in June. Non-yielding bullion tends to do well in low-interest-rate environments.
From a technical perspective, gold is recapturing the 9-day SMA at $5,003 as a potential support level. It is holding well above the 21-day SMA at $4,877. RSI is around 57, indicating steady positive momentum. A resistance test could appear around the $5,100-$5,200 zone. The bullish alignment suggests pullbacks will remain contained as long as the price holds above the faster average.
Silver is holding the support from the 50-day SMA at $77. Next support is likely at Friday’s open at $71. It is still trading below the 9- and 20-day SMA levels at $89 and $92, which could act as a possible resistance area.
- Crude Oil
Oil prices eased further following last week’s decline after the U.S. administration engaged in talks with Iran in an attempt to reach an agreement over the Islamic Republic’s nuclear program. Further discussions are scheduled for earlier this week, with the Iranian president describing the ongoing talks as “a step forward”. This has eased some of the mounting geopolitical risk premium, thereby causing oil to inch lower. Additionally, India has agreed to halt imports of Russian crude oil as part of the recent trade deal with the U.S. Nonetheless, if talks fail, oil could rebound again, especially since recent price action suggests markets are pricing in geopolitics over fundamentals. Both OPEC and the IEA are expected to share a revised outlook this week, which will be monitored by oil traders.
Oil prices are consolidating in their recent range. Brent is down 0.91% at $67.33. A Fibonacci retracement connecting the mid-December low of $58.49 with the late January high of $70.47 indicates the presence of 38.2% retracement support at $65.93, with the 200-day SMA lying not far below at $65.34. It could encounter resistance at around $68.95. WTI is down 0.70% at $62.73, with immediate support at around $61.55, which is characterised by the mid-Jan highs and roughly aligns with the 200-day SMA. It could potentially face resistance at around $65.57.
