February 2 – 8, 2026: Weekly economic update

Over the past week, equity markets remained under pressure, only to rebound fairly confidently on Friday. Inflation expectations data showed a positive decline on the 12-month horizon to 3.5%. Short-term inflation expectations have been falling for the sixth consecutive month. Five-year expectations increased by 0.1% to 3.4%.

The “current” GDP estimate (the GDPNow indicator) from the Atlanta Fed continues to point to strong growth at 4.2%. Business activity indices remain in expansionary territory.

The House of Representatives has approved the funding agreement, and a U.S. government shutdown is likely nearing its end.

United States

• Policy rate unchanged, with cautious rhetoric;
• Monetary policy stance remains moderately restrictive → moving toward neutral.
• The Fed is maintaining a balance: supporting markets while refraining from signaling rapid rate cuts.
• U.S. macro data confirm the soft-landing scenario: economic growth remains above potential, inflation is slowing, and the labor market is cooling without signs of recession.

Macroeconomic Statistics

INFLATION: CONSUMER PRICE INDEX (DECEMBER):

• Core CPI: (m/m) 0.2% (prev: 0.2%); (y/y) 2.6% (prev: 2.6%).
• CPI: (m/m) 0.3% (prev: 0.3%); (y/y) 2.7% (prev: 2.7%).

PRODUCER PRICE INDEX (NOVEMBER):

• PPI (m/m): 0.5%, prev: 0.2%.
• Core PPI (m/m): 0.7%, prev: 0.3%.

INFLATION EXPECTATIONS (MICHIGAN) (DECEMBER):

• 12-month inflation expectations: 3.5%, prev: 4.0%.

• 5-year inflation expectations: 3.4%, prev: 3.3%.

GDP (U.S. Bureau of Economic Analysis, BEA) (Q3 2025, annualized, second estimate): +4.4% (Q2 2025: +3.8%)

GDPNow indicator (“current” estimate of official GDP prior to release) by the Federal Reserve Bank of Atlanta: 4.2% (prev: 4.2%).

BUSINESS ACTIVITY INDEX (PMI) (DECEMBER):

(Above 50 indicates expansion; below 50 indicates contraction)

• Services sector: 52.7 (prev: 52.5);
• Manufacturing sector: 52.4 (prev: 51.9);
• S&P Global Composite: 53.0 (prev: 52.7).

LABOR MARKET (BLS) (December)

• Unemployment rate: 4.4% (prev: 4.6%);
• Total number of continuing jobless claims in the U.S.: 1,844K (prev: 1,819K);
• Initial jobless claims: 231K (prev: 209K, revised);
• Change in nonfarm payroll employment: 37K (prev: 64K);
• Change in private nonfarm payroll employment: 37K (prev: −69K);
• Average hourly earnings (y/y): 3.8% (prev: 3.5%);
• JOLTS job openings: 6.542M (prev: 6.928M).

MONETARY POLICY

• Effective Federal Funds Rate (EFFR): 3.50%–3.75%;
• Federal Reserve balance sheet: USD 6.605 trillion, +1.09% since the suspension of QT (USD 6.535 trillion).

MARKET FORECAST FOR RATE (FEDWATCH)

For the next meeting (March 18), the implied probability of a 25 bp rate cut stands at 23.24% (vs. 10.12% a week earlier).

Over the next 12 months, the market is pricing in two 25 bp rate cuts, bringing the policy rate to a range of 3.00%–3.25%. The first cut is expected in June, after three meetings.

Today:

А week earlier:

Market

SP500

Weekly performance: −0.10% (week-end close at 6,932.31); year-to-date: +1.27%.

NASDAQ100

Weekly performance: −1.87% (week-end close at 25075.77); year-to-date: -0,69%.

RUSSEL 2000 (RUT)

Weekly performance: +2,17% (week-end close at 2670,33); year-to-date: +7,59%.

VIX

The VIX volatility index is 17,17.

JP Morgan data show a sharp decline in short positions on the Nasdaq 100 (QQQ) and the S&P 500 (SPY) since the beginning of the year. For the Nasdaq 100, short interest has fallen to a historical low (short interest refers to the share of short positions as a percentage of total shares outstanding).

This pronounced decline indicates:

• A reduction in both defensive and speculative short positions;
• Increased investor confidence in market resilience;
• The absence of widespread bets on an equity market decline. The technology sector appears less hedged via short positions, suggesting more stable earnings and growth expectations.

Low short interest does not necessarily guarantee further upside, but it reduces the risk of sharp short-squeeze moves and points to calmer overall positioning.

Earnings reports (sample period: February 2–13, 2026):

The technology sector remains the primary growth driver. IT and communications companies (PLTR, AMD, QCOM, GOOGL, MSFT) are delivering strong results, reflecting robust demand for digital solutions and sustained investment in AI and infrastructure.

Some reports, particularly in cyclical sectors, show a decline in EPS; however, gross revenues continue to grow and exceed expectations.

The S&P 500 index is reporting the highest average net profit margin in more than 15 years.

A FactSet chart shows a sustained recovery in net profit margins among S&P 500 companies following the decline in 2022–2023. By the end of 2025, margins reached 13.2%, the highest level since at least 2009. This points to the structural resilience of corporate earnings and helps explain why equity markets continue to find support even amid a slowdown in macroeconomic momentum.

S&P 500 analysts expect net profit margins of index constituents to rise further in 2026. As of today, forecast net margins for Q1 through Q4 2026 stand at 13.2%, 13.8%, 14.2%, and 14.2%, respectively.

Large technology hyperscalers plan to invest up to USD 650 billion in AI this year.

The sharp increase in CapEx (data centers, AI infrastructure, semiconductors, power grids) directly boosts the investment component of GDP and supports economic activity in the United States.

Big Tech investment has strong spillover effects on manufacturing, semiconductors, energy, construction, and engineering. The impact extends well beyond the IT giants themselves, and elevated CapEx levels are therefore set to continue shaping the broader investment cycle.

In the short term, high capital expenditures will constrain free cash flow, but companies remain focused on long-term growth and scalability.

Eurozone

• Policy rate unchanged, inflation remains under control;
• Monetary policy stance is neutral, with the balance of risks shifting from inflation toward economic weakness;
• As trade tensions ease, the ECB has revised its GDP and inflation forecasts upward for the coming years;
• Europe is stabilizing but continues to lag the U.S. in terms of growth momentum.

Interest rates:

• Deposit facility rate: 2.0% (prev: 2.0%);
• Marginal lending facility rate: 2.4% (prev: 2.4%) (the rate at which banks can borrow overnight from the regulator);
• Short-term (main policy) rate: 2.15% (prev: 2.15%).

** Inflation: Consumer Price Index (CPI) (January):**

• Core CPI (y/y): 2.2% (prev: 2.3%);
• CPI (m/m): −0.5% (prev: 0.2%, revised); CPI (y/y): 1.7% (prev: 2.0%).

ECB officials’ rhetoric points to a shift toward a more accommodative monetary policy stance.

• Martin Kocher: If the euro strengthens further, the regulator may consider moving up the timing of a key rate cut.
• Madis Müller: Current growth dynamics and economic outlook in Europe are unsatisfactory.

GDP (Q4, final): q/q: 0.3% (prev: 0.3%); y/y: 1.3% (prev: 1.4%).

Unemployment rate (December): 6.20% (prev: 6.23%).

Purchasing Managers’ Index (PMI) (January):

• Services sector: 51.6 (prev: 52.4);
• Manufacturing sector: 49.4 (prev: 48.8);
• S&P Global Composite: 51.3 (prev: 51.5).

EURO STOXX 600 (FXXP1!)

Weekly performance: +1,02% (Week-end close: 616,90); January performance: +3,86%.

China The economy is stabilizing on the back of exports, while domestic demand and investment remain weak; stimulus measures remain targeted and cautious.

• Policy rates unchanged;
• Monetary policy stance remains accommodative;
• China has announced the continuation of fiscal support for economic growth under its 2026 plan (support for domestic demand, optimization of tax incentives and subsidies, and industrial modernization).

Interest rates:

• 1Y Loan Prime Rate (medium-term lending): 3.00%;
• 5Y Loan Prime Rate (five-year rate influencing mortgages): 3.50%.

Inflation indicators (December):

• Consumer Price Index (CPI) (m/m): 0.2% (prev: −0.1%); (y/y): 0.8% (prev: 0.7%);
• Producer Price Index (PPI) (y/y): −1.9% (prev: −2.2%).

GDP (Q4, final): q/q: 1.2% (prev: 1.1%); y/y: 4.5% (prev: 4.8%).

Unemployment rate (December): 5.1% (prev: 5.1%).

Industrial production (December), (y/y): 5.9% (prev: 4.8%).

Fixed asset investment (December), (y/y): −3.8% (prev: −2.6%).

Retail sales (December), (y/y): 0.9% (prev: 1.3%).

Imports (December), (y/y): 5.7% (prev: 1.9%); Exports (December), (y/y): 6.6% (prev: 5.9%).

Trade balance (USD) (December): USD 114.30 billion (prev: USD 111.68 billion).

Purchasing Managers’ Indices (PMI) (November):

• Manufacturing sector: 49.3 (prev: 49.2);
• Non-manufacturing sector: 49.4 (prev: 49.0);
• Composite index: 50.7 (prev: 49.1).

Chinese President Xi Jinping outlined the objective: “The yuan must become a global reserve currency. The country needs a ‘strong currency’ that is widely used in international trade, investment, and foreign exchange markets.”

CSI 300 INDEX (000300.HK)

Weekly performance: -1,33% (week-end close at 4653,59); year-to-date: +0,29%.

Hang Seng TECH Index (HTI1!)

Weekly performance: -4,84% (week-end close: 5461,3); year-to-date: −0.78%.

BOND MARKET

The U.S. bond market does not signal a deep recession or systemic risk. U.S. Treasuries 20+ (ETF TLT): weekly performance +0.47% (week-end close: 87.54); year-to-date: +0.44%.

YIELDS AND SPREADS

Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity: 4.21% (prev: 4.24%);

• 2-year Treasury yield: 3.50% (prev: 3.53%);
• ICE BofA BBB U.S. Corporate Index Effective Yield: 5.00% (prev: 5.03%).
• The yield spread between 10-year and 2-year U.S. Treasuries stands at 71 basis points (prev: 71);
• The yield spread between 10-year and 3-month U.S. Treasuries stands at 53 basis points (prev: 58).

U.S. 5-year credit default swap (CDS) spread (default insurance): 31.02 bps (vs. 28.33 bps last week).

GOLD FUTURES (GC)

Weekly performance +0.20% (week-end close: $4,979.8 per troy ounce); year-to-date: +14.95%.

Reuters: China’s central bank extended its gold-buying program for the fifteenth consecutive month in January. According to the People’s Bank of China, the value of gold reserves rose to USD 369.58 billion at the end of last month, up from USD 319.45 billion a month earlier.

The bank is diversifying its reserves and supporting a bullish sentiment in the gold market.

Growth drivers:

• Geopolitical risks and policy uncertainty surrounding Trump;
• Strong buying activity from central banks and gold-backed ETFs;
• Inflows from large private players, including Tether, which reportedly holds around 140 tons of gold.

DOLLAR INDEX FUTURES (DX)

U.S. Dollar Index futures (DX): weekly performance +0.52% (week-end close: 97.373); year-to-date: −0.63%.

After declining toward the end of 2025, the dollar has entered a phase of stabilization and partial recovery. Expectations of a more neutral Fed policy are capping the upside potential, while not creating sustained downward pressure on the USD.

OIL FUTURES

Weekly performance −2.55% (week-end close: $63.55 per barrel); year-to-date: +10.70%.

• Expectations of rising oil supply remain in place;
• OPEC+ is planning to pause further increases in output;
• Geopolitical risks in the Middle East—protests and heightened tensions in Iran—are increasing concerns over supply disruptions.

BTC FUTURES

Weekly performance −8.70% (week-end close: USD 70,279.33); year-to-date: −19.88%.

ETH FUTURES

Weekly performance −9.02% (week-end close: USD 2,064.96); year-to-date: −30.56%.

The CFTC is expanding its stablecoin regulatory framework, allowing national trust banks to issue U.S. dollar-pegged tokens under the GENIUS Act.

The CLARITY Act, a bill aimed at establishing a comprehensive crypto market structure in the U.S., is expected to be brought to a vote in March.

TOTAL CRYPTOCURRENCY MARKET CAPITALIZATION

Total cryptocurrency market capitalization: USD 2.36 trillion (vs. USD 3.23 trillion a week earlier) (coinmarketcap.com).

Crypto asset shares

• Bitcoin: 58.5% (58.9%);
• Ethereum: 10.4% (12.5%);
• others: 31.1% (28.6%).

ETF Net Flows Chart: