Weekly Market Commentary -  February 2, 2026

Week In Review

Despite a gauntlet of headwinds that included a pause in the Fed's cutting cycle, a hotter-than-

expected PPI print, a historic post-earnings slide for Microsoft, and a volatile blowoff reversal in precious metals, major U.S. equity indices displayed remarkable resilience, absorbing the negative sentiment to finish the trading week with only marginal price fluctuations. The Federal Open Market Committee chose to stall the easing cycle, maintaining the benchmark federal funds rate at a range of 3.50%–3.75%. Fed officials indicated that policy had likely reached a neutral level and a "wait-and-see" stance was now appropriate, removing a key liquidity tailwind that had supported higher equity valuations throughout late 2025. The primary macro drag came from the December Producer Price Index, which signaled that wholesale inflation remains uncomfortably "sticky." Final demand PPI surged 0.5% for the month, exceeding analyst forecasts and raising immediate concerns about cost pass-throughs to consumers. In the corporate sector, Microsoft weighed on the S&P 500, as a massive $37.5 billion capex bill and softer guidance for cloud growth raised ROI anxiety across the AI sector. After a parabolic move that saw gold hit a record $5,608 earlier in the week the sector reversed violently, yet the S&P 500 managed to decouple from the metals correction, rising +0.3%.

This Week

Economists anticipate a modest addition of 55,000 nonfarm payrolls for January, with the unemployment rate projected to remain steady at 4.4%.3 A weaker nonfarm payrolls number could force the Fed to reconsider its current cycle pause and pull forward the timeline for the next rate cut.

Portfolio Themes

International stocks are increasingly more appealing as earnings growth revisions move higher. Simplicity offers model portfolios with international stock exposure that may help diversify concentrated U.S. technology risk while capturing high-growth opportunities at attractive relative valuations.

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Data: Unless otherwise noted, data for charts, graphs, and tables is sourced from YCharts. Portfolio Themes idea sourced from FactSet.

1Style box returns use various Russell indices tied to specific areas of the market cap (vertical) and style (horizontal) spectrums. Indices are not typically available for direct investment, are unmanaged, and do not incur fees or expenses.

2 Index Statistics: P/E Ratio – Displays the forecasted P/E ratio of the representative index ETF. Yield - Dividend-per-share divided by current share price. Table statistics are updated weekly. MSCI indices represent broad global and international equity markets. Indices are represented by iShares ETF proxies (IVW, IVV, IVE, ACWI, and ACWX).

3 FactSet.

Past performance does not guarantee future results. Weekly commentary and investment advisory services are provided by Simplicity Wealth, LLC a SEC Registered Investment Adviser. Registration does not imply a certain level of skill or training. The information provided is for informational purposes only and does not constitute any form of advice or recommendation. The information contained within has been obtained from various sources and is believed to be accurate at the time of publication.