Market Analysis Summary - February 6, 2026
In a significant turnaround, stock benchmarks have rebounded after a challenging start to February, with the Dow Jones reaching new all-time highs. This recovery is particularly notable in the tech sector, despite ongoing struggles from major players like Amazon, Google, and Meta.
Market Sentiment and Economic Indicators
The previous week saw a sharp selloff across various asset classes, driven by geopolitical tensions, particularly between the US and Iran, and disappointing mid-tier US labor data. Key reports, including JOLTS, jobless claims, and the Challenger layoffs report, indicated a weakening labor market, which dampened investor sentiment ahead of the Non-Farm Payroll (NFP) release.
However, overnight developments led to a recovery in market sentiment. The Nikkei 225 surged by 4.20% ahead of Japan's snap elections, and dovish expectations from the Federal Reserve and the Bank of England contributed to a risk-on rally.
Cryptocurrency Market Recovery
Cryptocurrencies, which had been under significant pressure, also experienced a rebound, with Bitcoin rising sharply from $60,000 to $69,000 after hitting key support levels. This volatility highlights the fragility of digital assets, which remain highly sensitive to market sentiment.
Sector Performance and Technical Analysis
The tech sector is seeing a temporary relief as investors reassess the impact of AI-related capital expenditures. Nvidia and AMD are leading the charge among mega-cap stocks, while other major tech firms continue to face challenges despite reporting record earnings.
Key Technical Levels for Major Indices
Dow Jones
The Dow Jones is approaching the psychological milestone of 50,000, having recently surpassed its previous all-time highs. Key resistance levels to watch include:
- 49,900 to 50,000 (Psychological Resistance)
- 49,927 (Session highs and ATH)
Support levels include:
- 49,500 to 49,700 (Pivot)
- 49,200 to 49,350 (Intraday Support)
Nasdaq
The Nasdaq is also rebounding, with a notable increase of 3.37% from its lows. Key resistance levels include:
- 25,000 to 25,250 (Minor Support)
- 25,400 to 25,500 (Key intraday resistance)
Support levels are:
- 24,165 (February 5 lows)
- 24,500 to 25,600 (Key Support)
S&P 500
The S&P 500 is also experiencing a recovery, with traders looking for a break above the 7,020 all-time highs. Key resistance levels include:
- 6,918 to 6,930 (50 and 200-period Moving Averages)
- 6,945 to 6,975 (Previous ATH Resistance)
Support levels include:
- 6,880 to 6,900 (Key Pivot Zone)
- 6,735 (Overnight lows)
Conclusion
As markets brace for a potentially volatile week ahead, the focus remains on the upcoming NFP data and ongoing geopolitical developments. The ability of indices to maintain their gains will be crucial in determining the market's direction in the near term.