Markets are navigating a week filled with pivotal economic data and corporate earnings, all unfolding against a backdrop of geopolitical uncertainty. Last week saw volatility in precious metals, with gold and silver markets reacting to concerns over currency devaluation and speculation about yen intervention. Former President Donald Trump added to the tension by suggesting possible military action in Iran and new tariff policies, while also nominating Kevin Warsh for the next Federal Reserve chair—a position that would begin May 15 if confirmed by the Senate.
This week, investors will scrutinize labor market indicators to gauge the likelihood of future Fed rate cuts. Key releases include December’s JOLTS data, January’s ADP employment report, the Challenger layoffs survey, weekly jobless claims, and the January nonfarm payrolls report. A projected increase of 60,000 jobs—up from 50,000 in December—could reinforce the view that the U.S. economy remains resilient, potentially supporting a more cautious approach to monetary easing.
Central bank activity will also be in focus. The European Central Bank and the Bank of England are both expected to hold rates steady, while the Reserve Bank of Australia may raise rates by 25 basis points amid persistent inflation. Domestic Fed officials, including Governor Lisa Cook and Vice Chair Philip Jefferson, will deliver speeches offering insight into the central bank’s economic outlook.
Corporate earnings continue to provide clues about economic conditions at the start of 2026. Alphabet and Amazon are set to report as part of the ongoing “Magnificent-7” earnings cycle, with additional updates from AMD, Palantir, and Qualcomm potentially influencing sentiment around AI-related equities. Consumer-facing firms like PepsiCo, Philip Morris, Uber, and Walt Disney will offer signals about spending behavior, while Qualcomm’s results may reflect trends in tech demand.
Additional data points include the Institute for Supply Management’s manufacturing and non-manufacturing PMI reports. The manufacturing index, which dipped to 47.9 in December, may show slight improvement in January, while the services sector PMI—previously at 53.8—is expected to remain above the 50.0 threshold, indicating expansion. The Conference Board’s job market series suggests a continued decline in job openings, consistent with a cooling labor market. Finally, the preliminary University of Michigan consumer sentiment reading for February is anticipated to hold steady or weaken slightly from January’s 56.4, reflecting ongoing concerns about inflation and employment, though historical inaccuracies in this metric suggest it should be interpreted with caution.
— news from Yardeni QuickTakes
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ECONOMIC WEEK AHEAD: February 2-6
The week ahead has an anything-goes energy as a variety of key data and earnings reports vie for attention amid peak geopolitical intrigue. n nLast week left quite an impression on global markets. Trading in gold and silver went off the rails. “Dollar debasement” concerns competed with yen-intervention chatter. Donald Trump ‘s White House kept everyone on their toes, hinting at military action in Iran and threatening new tariffs. Yet President Trump clarified, too, naming Kevin Warsh as his choice for the next Fed chair. If confirmed by the Senate, he will start on May 15. n nInvestors will be assessing how this week ‘s bevvy of labor market indicators might affect the timing of any future Fed rate cuts. They include December ‘s JOLTS data (Tue), January ‘s ADP release (Wed), January ‘s Challenger layoffs survey (Thu), weekly unemployment insurance claims (Thu), and January ‘s employment report (Fri). n nFed Governor Lisa Cook speaks on the economic outlook (Wed), followed by Vice Chair Philip Jefferson (Fri). It will also be a busy week for major central banks abroad, too. The European Central Bank (Thu) and the Bank of England (Thu) are expected to leave rates unchanged. The Reserve Bank of Australia (Tue) could tighten by 25 bps as inflation heats up. n nWe ‘ll get corporate results from a wide variety of names that may offer insights into how the economy entered 2026. The Magnificent-7 earnings season continues, with Alphabet and Amazon reporting. Add updates from AMD, Palantir, and Qualcomm, and this could be a telling week for the speculative AI bets. Reports from PepsiCo, Philip Morris, Qualcomm, Uber, and Walt Disney could provide much-needed intel on how consumers are faring. n nHere ‘s a look at the key data reports this week that might influence the timing of the next Fed rate move: n n(1) Employment. We expect a slight improvement in the labor market in January, with payrolls rising by 60,000 following a 50,000 gain in December (chart). Any upside surprises could boost the dollar and buttress current Fed Chair Jerome Powell ‘s contention that the US doesn ‘t require fresh monetary stimulus. n n(2) Purchasing managers ‘ index. The December surveys from the Institute for Supply Management made for mixed readings (chart). Manufacturing slumped to a 14-month low of 47.9. It should improve a bit in January. The non-manufacturing PMI (Wed) should remain well above 50.0. It was 53.8 in December. n n(3) JOLTS. The November Job Openings and Labor Turnover Survey showed that job openings edged down (chart). The Conference Board ‘s jobs-plentiful series suggests that job openings remain on a downward trend. n n(4) Consumer expectations. The preliminary University of Michigan consumer sentiment reading for February (Fri) is likely to be steady to weaker following January ‘s final 56.4 reading amid labor market concerns and elevated prices (chart). This survey data has been too pessimistic about the outlook for consumer spending for quite some time. Ignore it.