February 3rd Market Overview

Happy Tuesday

Markets got spooked by AI again, but this time it wasn't abstract. Anthropic put out new legal tools and the data and research companies took it on the chin hard. Thomson Reuters had its worst day ever because of the legal tools in the demo.

Gold bounced hard after last week's mess. Palantir put up incredible numbers on earnings and still couldn't hold its gains today.

Let’s dig in...

Today's Big Picture

Anthropic triggers data provider bloodbath

Anthropic dropped new legal tools on GitHub that handle contract reviews and compliance work. The market reaction was immediate and ugly. Thomson Reuters $TRI had its worst day ever. Then it spread to private credit managers sitting on piles of software investments. Ares $ARES and Blue Owl $OWL got hit double digits. I think we're watching the start of something bigger. Software is becoming less of a moat in the new AI coding world.

Gold posts biggest dollar gain ever

Gold added $281 an ounce Tuesday. Largest single-day move on record. Two sessions ago it dropped a record $604. Bank of America sees $6,000 as possible but I wouldn't chase this. The volatility itself is the story here, not where it's heading.

Palantir crushes but can't fight the tape

Revenue $1.41B. U.S. commercial basically doubled. 2026 guidance of $7.18B blew past the $6.22B estimate. Rule of 40 hit 127, which is absurd for a company this size. Stock ripped premarket then gave most of it back as tech sold off. Even monster numbers can't save you when the whole sector is rotating out.

Market Overview

Index Performance

Stock Spotlight

Teradyne $TER ( ▲ 13.35% ) 
beat estimates with AI demand driving growth in compute, networking, and memory testing. Q1 guidance crushed expectations.

PepsiCo $PEP ( ▲ 4.87% ) 
beat earnings but the real news is on the shelf. Price cuts coming on Lay's, Doritos, and Flamin' Hot Cheetos after consumers finally pushed back.

DaVita $DVA ( ▲ 19.61% ) 
beat on revenue and EPS. Berkshire remains the largest holder and recently sold more shares per their 2023 agreement.

Walmart $WMT ( ▲ 2.76% ) 
crossed $1 trillion market cap. First traditional retailer to hit 13 digits.

Big Name Updates

PayPal $PYPL ( ▼ 19.63% ) 
collapsed after warning earnings will decline in 2026. Named HP's Enrique Lores as new CEO. Stock heading toward levels not seen since 2017.

Novo Nordisk $NVO ( ▼ 14.03% ) 
warned 2026 sales will drop meaningfully from pricing pressure on Ozempic and Wegovy. Trump administration deal is biting.

SpaceX acquired xAI at a combined $1.25 trillion valuation. CFO confirmed this won't delay the IPO.

Amazon $AMZN ( ▼ 1.73% ) 
cutting over 2,000 jobs in Washington state including hundreds of engineers.

Other Notable Company News

Gartner $IT ( ▼ 21.47% ) 
fell sharply after 2026 guidance missed by a wide margin.

Pfizer $PFE ( ▼ 3.41% ) 
monthly obesity shot data showed double-digit weight loss but trailed Eli Lilly's Zepbound.

Samsung and SK Hynix posted their best daily gains since 2008 as investors bought the dip in memory.

Affirm $AFRM ( ▼ 0.53% ) 
upgraded to overweight by Morgan Stanley. Called it the best fintech in coverage.

FedEx $FDX ( ▲ 5.37% ) 
upgraded by Bernstein with a $427 target on margin expansion thesis.

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Sector Watch

Bond Market

Richmond Fed's Barkin said there's "some distance to travel" on inflation. Fed's Miran called for rate cuts of more than a point this year. Blackstone's Jon Gray expects the Fed to bring rates down as rental housing data improves. With Friday's jobs report canceled, Fed speakers are the only game in town.

Policy Watch

Government Shutdown 
House passed funding bill 217-214. Trump will sign immediately. Friday's jobs report canceled due to the shutdown. Markets flying blind on employment data.

Trade

• U.S. reduced tariffs on India to 18% after India agreed to stop buying Russian oil

• Kremlin says they've heard no statement from India about halting purchases

• Someone's bluffing

Critical Minerals U.S. hosting critical minerals meeting today. Taiwan working with U.S. on rare earth supply chain, planning domestic production within three years.

What to Watch

AMD Earnings Tonight 
Chip giant reports after close. Guidance matters more than the quarter given the AI selloff context.

Private Credit Contagion 
Watch whether selling in Ares, Blue Owl, Apollo, and KKR continues. If AI is repricing software valuations, these firms have real portfolio exposure.

Eli Lilly Wednesday 
Reports after Novo's warning and Pfizer's underwhelming data. Obesity trade needs Lilly to deliver.

Software Carnage 
iShares Software ETF now down about 28% from highs. Watch whether buyers step in or this becomes a full sector repricing.

Thanks for reading - you are now the more informed 🙂

- John

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