Market Summary - February 4, 2026
Tech Sector Decline
The technology sector is experiencing a significant downturn, with the US100 index dropping 2% and falling below the 25,000 mark for the first time since December 2025. This decline is attributed to a growing fatigue among investors who previously adopted a "buy everything" strategy, particularly in the artificial intelligence space. The market is now reassessing which companies will thrive in this evolving landscape.
Impact of Earnings Reports
Advanced Micro Devices (AMD) has reported disappointing first-quarter forecasts, leading to a 16% drop in its stock price. This negative sentiment has spread across the semiconductor and software sectors, with notable declines in shares of Micron Technology (down 9%), Broadcom (down 5%), and Oracle (down 4%). Even industry leaders like Nvidia and CrowdStrike are facing selling pressure, while Microsoft has managed to stabilize somewhat.
Broader Market Sentiment
The overall market sentiment is further dampened by recent jobs data. The ADP report indicated that private payrolls increased by only 22,000, significantly below the expected 45,000. This figure would have been even lower without a surge in hiring within the education and health services sectors. Additionally, revisions to the previous month's data have contributed to a shaky outlook for the labor market.
Technical Analysis of US100 Index
The US100 index has entered a deeper corrective phase, experiencing a sharp 2.3% drop. It has broken below the 50% Fibonacci retracement level of 25,136, which previously served as support. The current price action is testing the 38.2% Fibonacci level around 24,885 and the long-term 120-period EMA, which is now a critical support line for bullish traders.
A failure to maintain support at 24,800 could lead to further declines towards the 23.6% Fibonacci level at 24,575 or even the psychological support at 24,000. Recovery will depend on reclaiming the 25,130 level, which corresponds to the 100-day EMA. A failure to do so may confirm a structural trend change.
Conclusion
As the tech sector grapples with earnings disappointments and weak labor market indicators, investors are advised to remain cautious. The upcoming earnings reports from major players like Alphabet and Amazon will be crucial in determining the next market direction.