Market Summary - February 5, 2026
Overview
On February 5, 2026, global markets experienced significant fluctuations, particularly in Asia, where stock markets fell sharply due to concerns over substantial investments in Artificial Intelligence (AI) by major companies. Concurrently, German factory orders surged unexpectedly, while silver prices plummeted, and the release of Non-Farm Payroll (NFP) data was delayed ahead of crucial meetings by the Bank of England (BoE) and the European Central Bank (ECB).
Asian Market Performance
Asian stock markets faced a downturn, primarily influenced by a global tech rout. Investors shifted their focus away from tech stocks, prompted by Alphabet's announcement of a planned expenditure of $175 billion to $185 billion in AI, which exceeded market expectations. AMD's disappointing financial results led to a 17% drop in its stock price, further exacerbating market fears.
South Korea's main index fell nearly 4%, while Taiwan's market also declined, despite gains in its banking and real estate sectors. Japan's Nikkei index experienced a drop, although healthcare and utilities sectors showed some resilience.
German Factory Orders Surge
In a surprising turn, German factory orders rose by 7.8% in December 2025, marking the fourth consecutive month of growth and the best performance in two years. This increase was largely driven by significant orders for metal products, machinery, and electrical equipment. However, the automotive sector saw a decline in orders, particularly for vehicles like planes and military equipment. Notably, the growth was bolstered by a few large contracts, with underlying orders only increasing by 0.9%.
European Market Activity
European stock markets remained mostly flat as investors awaited the ECB's interest rate decision. Mixed financial results from major companies like Shell and BNP Paribas influenced market sentiment. BNP Paribas's stock rose over 4% due to better-than-expected profits, while BBVA's stock fell despite good earnings. Shell's stock dipped due to lower-than-anticipated earnings.
Technology stocks in Europe rebounded by 2%, helping to offset losses in other sectors. The US dollar strengthened, reaching its highest value in two weeks, as investors sought safety amid stock market volatility. The euro slightly declined as market participants anticipated the ECB's interest rate announcement.
Commodity Market Trends
Commodity prices, including silver, gold, oil, and copper, experienced sharp declines, largely due to easing global tensions following positive diplomatic communications between the US and China, as well as upcoming talks with Iran. Silver prices were particularly hard hit, dropping nearly 15%, while gold, oil, and copper fell by about 2%. The strengthening US dollar contributed to these declines, making commodities more expensive for buyers using other currencies.
Looking Ahead
The upcoming days are expected to be eventful, with the ECB and BoE meetings on the horizon. Additionally, the release of US economic data and Amazon's earnings report are anticipated later in the day. The NFP data release has been postponed to February 11, 2026, but it is not expected to significantly impact market dynamics.
Technical Outlook for Silver
The technical outlook for silver (XAG/USD) has shifted to a bearish bias following the recent decline. Immediate support is identified in the $74.00 to $71.00 range, with a critical level at $71.30. A drop below this could trigger further selling pressure. Conversely, to regain bullish momentum, silver must surpass the $83.10 mark and break through the $87.00 - $90.50 resistance zone.