Market Update Summary - February 4, 2026

In this mid-week review, we analyze the significant developments affecting North American and global traders amidst a backdrop of volatility and uncertainty.

Key Developments

The markets are currently influenced by several catalysts, including the announcement of a new Federal Reserve Chair, geopolitical tensions, and sharp market volatility. President Trump has nominated Kevin Warsh to replace Jerome Powell as Fed Chair, effective May 2026. This change comes at a time when the metals market, particularly silver, experienced extreme volatility, plummeting from $120 to $71 in a single day.

Geopolitical tensions, particularly between the US and Iran, have also contributed to market fluctuations, with military assets being deployed in the region and recent drone attacks escalating concerns. Despite these challenges, US stock benchmarks have shown resilience, remaining near all-time highs.

US Dollar Performance

After a significant drop following the Greenland Crisis, the US Dollar has rebounded from lows around 95.00 to above 97.00, indicating a test of its resilience. This recovery is attributed to a mix of risk-averse sentiment and the positive implications of Warsh's nomination, which has halted the previous selloff.

Market Rebalancing

Recent data, including a positive US Manufacturing PMI, has prompted a rotation towards traditional sectors, impacting the performance of major indices. The Nasdaq has seen a notable decline of 4.22% over the past week, while the Dow Jones has managed a modest gain of 1.20%.

Technical Analysis

The Dollar Index is currently testing key levels, with resistance noted between 97.25 and 97.60, and support levels identified around 96.50 to 97.00. The USD/CAD pair is also under scrutiny, operating within a descending channel, with significant technical tests ahead.

Economic Calendar

Looking ahead, the US Non-Farm Payrolls report has been delayed due to a recent partial government shutdown, while Canadian employment data is expected to be released on Friday.

Conclusion

As traders navigate these uncertain times, the resilience of US assets and the Dollar amidst geopolitical and economic challenges will be crucial to watch. The ongoing rebalancing in the markets may signal a shift in trends, particularly in the tech sector.