February 2, 2026
The Dow Jones Industrial Average crossed 50,000 for the first time, but the cleaner market story was rotation. Investors moved money into banks, industrials, staples, and other value names after a long run in growth technology. Financials and industrials helped lift the Dow more than 1,000 points on Friday, with Caterpillar and Goldman Sachs among the names tied to the move.
Technology was not abandoned. Nvidia and Broadcom each rebounded roughly 7%, Oracle and Palantir recovered, and Bitcoin rose nearly 10% after briefly trading below $61,000 before moving back above $70,000. The difference is that investors were becoming more selective about AI exposure. That is a useful recruiting point because sector leadership can change even when the broader index is still rising.
Rates kept valuation in focus. The 10-year Treasury yield rose more than 4 basis points to about 4.28%, while the 2-year and 30-year yields also moved higher. The ISM manufacturing index reached 52.6, back in expansion territory, and the Fed removed language about downside employment risks. Kevin Warsh's nomination to replace Jerome Powell added uncertainty because he has opposed QE in the past but has more recently called for lower rates and Fed reform. The market setup pointed to two cuts and a possible 25 basis point move around June, with a terminal rate near 3.25%.
Credit was still open for large transactions. Bankers were preparing roughly EUR2.5 billion of debt for a potential sale of Continental's ContiTech unit, which could be valued at EUR4 billion to EUR5 billion. With about EUR600 million of EBITDA, the proposed financing implied roughly 4.25x leverage.
Commodities moved quickly. Brent fell nearly 5% after signs of progress in U.S.-Iran talks, while OPEC+ kept March output unchanged. Gold dropped as much as 16% from its recent peak after the Warsh news, although JPMorgan still had a $6,300 per ounce year-end target.
Santander's $12.2 billion cash-and-stock deal for Webster was the main bank M&A example. The combined U.S. bank would have about $327 billion of assets and rank among the top 10 retail banks by assets. Webster holders would receive 2.0548 Santander shares plus $48.75 in cash, while Santander targeted 18% U.S. return on tangible equity by 2028 and $800 million of cost savings. Santander's ADR fell 6.4%, a reminder that strategic logic still has to clear integration and execution concerns.