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Weekly Commentary (2/2/26) – Will the Groundhog Predict an Early Spring?

NDS Wealth Advisors |

Weekly Commentary (2/2/26) – Will the Groundhog Predict an Early Spring?
Last week was packed with Big Tech earnings and the long-anticipated news that President Trump will nominate Kevin Warsh as the next Chair of the Federal Reserve. Investors remained broadly optimistic, with both the S&P 500 and the Dow Jones Industrial Average reaching record highs during the week.
For the period, the S&P 500 gained 0.3%, while the Dow Jones Industrial Average declined 0.4%. The Nasdaq Composite slipped 0.2%, and small-cap stocks lagged meaningfully, with the Russell 2000 falling 2.1%. International markets outperformed: developed markets (MSCI EAFE Index) rose 1.6%, while emerging markets (MSCI EM Index) advanced 1.8%.
Commodities were volatile. Gold prices fell sharply, down 5.4%, as markets digested the implications of a potential shift in Federal Reserve leadership. Oil prices surged nearly 7.4% amid rising geopolitical tensions, including concerns around potential U.S. military action involving Iran and possible disruptions in the Strait of Hormuz.
The Federal Reserve held interest rates steady in a range of 3.5% to 3.75%. Fed Chair Jerome Powell struck an optimistic tone, noting that “available indicators suggest that economic activity has been expanding at a solid pace.”
Meanwhile, Fed Chair nominee Kevin Warsh has been openly critical of the size of the Fed’s balance sheet and is generally viewed as more dovish on monetary policy. His nomination will require Senate confirmation in the coming weeks. Interest rates were relatively stable, with the yield on the 10-year U.S. Treasury ending the week essentially unchanged at 4.25%.
Looking ahead, the upcoming week includes the ISM Services PMI and additional consumer data, along with earnings reports from several major bellwether companies. With markets near all-time highs, we continue to emphasize broad diversification, high-quality holdings, and a modestly defensive tilt.
“This is one time where television really fails to capture the true excitement of a large squirrel predicting the weather.”
— Phil Connors