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Market Meltdown Report — February 5, 2026
Market Alert — Sixth Decline in Seven Sessions

Market
Meltdown.

February 5, 2026 — Close of Business

Six converging catalysts drove the worst session of 2026. The S&P 500 has gone negative for the year. Amazon's after-hours bomb will dominate tomorrow's open.

Dow Jones
48,908
▼ 592.58 (−1.20%)
S&P 500
6,798
▼ −1.23%
Nasdaq
22,540
▼ −1.59%
VIX
20.91
▲ +12.18%
01

Six Converging Catalysts

CATALYST 01
JOLTS Data — Labor Market Cracking
Job openings fell to 6.54M (down 386K), the lowest openings rate 3.9% since April 2020. Weekly jobless claims rose to 231K. January layoff announcements hit 108K — highest since 2009. The labor market is cooling faster than expected.
CATALYST 02
AI Capex Sticker Shock (Alphabet)
Alphabet reported solid earnings but guided $175–185B in 2026 capex — more than double 2025 and far above the $119.5B estimate. This triggered a broad rethink of whether AI spending will ever generate adequate returns. GOOGL fell ~4%.
CATALYST 03
Software "SaaSpocalypse"
The AI spending fear cascaded into a full rout of software stocks. Piper Sandler downgraded Adobe, Freshworks, and Vertex. The WisdomTree Cloud Computing Fund is down ~20% YTD on fears that AI makes traditional SaaS obsolete.
CATALYST 04
Qualcomm Guidance Miss + Memory Shortage
Beat on earnings but guided weak, citing a global memory shortage — data center demand crowding out smartphone memory. BofA downgraded to Neutral, slashed target from $215 → $155. Stock fell ~8.5%.
CATALYST 05
Bitcoin Crash (−15%)
Worst single-day drop since FTX. BTC briefly broke below $61,000 — down ~50% from Oct peak of ~$126K. Over $1B in leveraged positions liquidated in 24 hours. Treasury Secretary Bessent: government will not support crypto in a crash.
CATALYST 06
Hawkish Fed Overhang (Warsh Nomination)
Kevin Warsh's nomination as Fed Chair continues to weigh. Viewed as an inflation hawk, creating uncertainty about rate cuts. Fed funds at 3.50–3.75%. Market had priced 2 cuts starting June — now less certain.
BACKGROUND DRAG
Tariff Overhang
Effective US tariff rate at ~16.8% (up from 2.5% in Jan 2025). Greenland-related tariff threat against Nordic/European nations still unresolved.
02

Global Spillover

Asset Level Move Signal
Gold ~$4,815/oz −4.6% Liquidation selling
WTI Crude ~$63.50 −2.0% Demand concerns
US 10Y Yield ~4.28% Flight to safety
US 30Y Yield ~4.86% −6bps Duration bid
US Dollar (DXY) ~97.6 ▲ Strengthened Safe haven
Kospi (Korea) −3.86% Samsung −5.8%, SK Hynix −6.4%
Nikkei −0.88% Moderate follow-through
Europe (Stoxx 600) +0.1% Relatively insulated
03

After-Hours Bombshell

⚡ AFTER HOURS

Amazon Drops a $200B Bomb

−11%
After-hours drop
$200B
2026 Capex Guidance
$1.95
EPS (missed $1.97)

Revenue beat. AWS beat. But the $200 billion capex guidance and Q1 operating income below consensus sent shares spiraling. Combined with Alphabet's $175–185B guidance, hyperscaler AI spending now exceeds $500 billion with no clear return timeline. This will dominate tomorrow's open.

04

Preparing for Tomorrow

10:00 AM ET
UMich Consumer Sentiment

Preliminary February reading. Watch for inflation expectations shift post-tariffs.

PRE-MARKET EARNINGS
~38 Companies

Philip Morris, Biogen, Cboe, Carlyle, Centene, AutoNation and more reporting before the bell.

FED SPEAKERS
Jefferson & Cook

Vice Chair Jefferson and Gov. Cook both scheduled in February. Timing TBC.

S&P 500 Futures
−0.6%
Nasdaq 100 Futures
−1.1%
Dow Futures
−0.4%

These will reset at 8:30 AM with the jobs number

05

The Big Picture

The bull case isn't dead — strategists still have constructive year-end targets (Oppenheimer: 8,100, BofA: 7,100, Goldman expects 2.8% global growth). But leadership is rotating out of mega-cap tech and AI names.

The market is repricing whether $500B+ in combined hyperscaler capex will generate returns. Small-caps and value sectors — energy, healthcare, industrials — are where the rotation is flowing.

⚠️ Hindenburg Omen triggered 3 times in 6 sessions — signaling deteriorating breadth despite ample liquidity.
📍 Key level to watch tomorrow: The 10-year Treasury yield reaction to the jobs report will set the tone for the entire session.
06

Notable Movers

PTON
Peloton
−28%
Weak holiday quarter, soft guidance
EL
Estée Lauder
−19%
Disappointing earnings
SNAP
Snap Inc.
−12%
Weak earnings
AMZN
Amazon (After Hours)
−11%
$200B capex, weak Q1 guidance
QCOM
Qualcomm
−8.5%
Guidance miss, memory shortage, BofA downgrade
GOOGL
Alphabet
−4%
$175–185B capex guidance spooked investors