Stock Focus Report – Market Analysis for February 04, 2026

Wednesday’s trading session was a tale of two markets, with tech stocks getting hammered while old-economy industrials partied like it’s 1999. The Nasdaq plunged 1.44% to 22,920.12, dragged down by a brutal semiconductor selloff that saw AMD (AMD) crater 17% and Micron (MU) drop nearly 10%. Meanwhile, the Dow Jones quietly notched a 0.53% gain to 49,501.30, proving that in 2026, being boring might be the smartest trade.

The S&P 500 found itself stuck in the middle of this market tug-of-war, sliding 0.51% to 6,882.73 as tech’s weight dragged it lower. Bitcoin joined the risk-off party, tumbling 4.48% to $73,340, while Treasury yields ticked higher across the curve—the 10-year adding 3 basis points to 4.28%. The dollar flexed its muscles too, climbing to 97.67 on the DXY index.

Trading volume tilted heavily bearish in semiconductors, with the AI chip narrative taking a breather after months of relentless gains. Investors rotated into defensive positions and value plays, suggesting growing caution about stretched tech valuations heading into next week’s delayed jobs report.

The semiconductor wreckage dominated headlines, but the real story brewing underneath was trade policy optimism. Soybean futures (SOYB) surged over 2% after President Trump indicated China might purchase an additional 8 million tons of U.S. soybeans this season—a potential thaw in agricultural trade tensions that’s music to Midwest farmers’ ears. This agriculture-driven rally suggests tariff fears might be easing, at least in commodity markets.

Automakers caught a bid on policy hopes too, with Ford (F) and GM (GM) expressing support for Trump’s plan to ease fuel economy standards despite requesting modifications. The timing’s interesting since Ford just reported a 5.3% drop in January U.S. sales to 135,362 vehicles, with sluggish EV demand continuing to plague the transition narrative. The aerospace sector also grabbed attention as SAS negotiates widebody orders with Boeing (BA) and Airbus (EADSF, EADSY), anticipating stronger long-haul travel demand.

Retail and healthcare delivered their own drama. Target’s (TGT) new CEO Michael Fiddelke admitted the company has lost trust with both customers and employees—a refreshingly honest assessment that the stock market won’t forgive easily. Meanwhile, Abbott (ABT) issued a recall for glucose monitoring sensors linked to seven deaths and 860 serious injuries, reminding investors that healthcare isn’t just about innovation but also about getting the basics right. Cigna (CI) settled with the FTC over insulin pricing practices, agreeing to revamp its drug pricing approach.

The market’s schizophrenic personality was on full display Wednesday, with investors simultaneously embracing defensive positioning while betting on policy-driven catalysts. The semiconductor selloff felt like profit-taking after an extended run rather than fundamental deterioration—AMD and Micron didn’t suddenly forget how to make chips. But the velocity of the decline suggests algorithmic trading and momentum unwinds amplified the move.

There’s a palpable sense that investors are recalibrating expectations around AI chip demand and wondering if we’ve gotten ahead of ourselves. Cerebras Systems raising $1 billion at a $23 billion valuation shows capital still flows to AI infrastructure, but public market investors are growing more selective. The outperformance in bright spots like Enphase Energy (ENPH), up 28%, and Silicon Labs (SLAB), soaring 33%, suggests specific stock-picking is rewarding deeper analysis over index-hugging.

The delayed January jobs report—now scheduled for February 11 after shutdown-related postponements—hangs over sentiment like a question mark. Without fresh employment data, traders are flying partially blind on the economy’s trajectory, which might explain the defensive rotation into Dow components and away from high-beta tech names.

Wednesday’s divergence between the Dow and Nasdaq wasn’t just noise—it’s a signal that market leadership is shifting, at least temporarily. When semiconductors get crushed this badly while industrial and value stocks rally, it tells you investors are questioning growth-at-any-price narratives and demanding more balance in their portfolios. The fact that Treasury yields rose alongside stock market weakness suggests bond traders aren’t buying into any imminent recession scenario.

Next week’s jobs report on February 11 becomes the critical datapoint that could either validate the tech selloff or spark a violent reversal. If employment remains robust, it justifies higher yields and continued pressure on long-duration growth stocks. If it disappoints, suddenly those beaten-down chip names start looking attractive again at lower valuations.

For now, the message is clear: diversification matters, and concentration risk in mega-cap tech can bite hard on days like today. Watch how semiconductor stocks trade in the coming sessions—if AMD and Micron find support and bounce, it was just a healthy correction. If they keep sliding, we might be in for a more significant rotation that favors the Dow’s old-guard constituents over Silicon Valley’s darlings. The February 11 jobs data will likely be the tiebreaker.