Global markets on February 3, 2026, reflected a complex mix of risk-on and risk-off dynamics, as investors navigated ongoing macroeconomic uncertainty, currency fluctuations, and sector-specific pressures. U.S. equities retreated on concerns over tech earnings and AI sector fatigue, while European and Asian benchmarks showed selective gains. Tel Aviv’s equity market stood out with broad-based strength, offering a contrast to global caution.

Americas: U.S. Equities Retreat as Volatility Spikes

U.S. markets faced a downward session on February 3, with the S&P 500 closing at 6,917.81, down 0.84%, the Nasdaq falling 1.43% to 23,255.19, and the Dow Jones dropping 0.34% to 49,240.99. The CBOE Volatility Index surged 10.16% to 18.00, signaling heightened investor nervousness. Small-cap stocks saw more modest gains, with the Russell 2000 advancing 0.31% to 2,648.50.

Investors reacted to uneven earnings results in technology and growth sectors, which highlighted the divergence between AI-driven optimism and near-term financial performance. Meanwhile, the U.S. Dollar Index edged lower by 0.04% to 97.39, providing some relief to multinational firms and emerging market exposures. For February 4, markets are likely to remain sensitive to macroeconomic signals, tech sector commentary, and currency fluctuations, with volatility expected to persist in early trading.

Europe: Mixed Trading as Investors Balance Stability and Risk

European benchmarks closed mixed on February 3. The MSCI Europe index gained 0.25% to 2,770.78, while major national indices posted modest declines: FTSE 100 fell 0.26% to 10,314.59, EURO STOXX 50 decreased 0.20% to 5,995.35, and the DAX slipped 0.07% to 24,780.79. The Euro Index rose 0.23% to 118.18, while the British Pound Index also advanced 0.23% to 136.97.

Market participants weighed regional economic stability against external pressures, including U.S. interest rate expectations and global liquidity conditions. Defensive sectors such as utilities and consumer staples saw relative resilience, while cyclical and tech-linked equities faced selective selling. Heading into February 4, European investors will monitor corporate guidance and geopolitical developments for signs of broader market direction.

Asia: Emerging Markets Outperform Amid Selective Trading

Asian markets displayed mixed performance on February 3, with notable divergence across benchmarks. South Korea’s KOSPI Composite Index advanced 1.08% to 5,345.32, and Australia’s S&P/ASX 200 rose 0.82% to 8,929.70. The Australian Dollar Index strengthened 0.99% to 70.15. In contrast, Japan’s Nikkei 225 declined 0.71% to 54,332.63, and Hong Kong’s Hang Seng fell 0.41% to 26,724.63. India’s S&P BSE Sensex dropped 0.31% to 83,483.32, while China’s SSE Composite remained flat at 4,067.67.

The trading day was affected by selective sector rotations, with technology and export-oriented equities facing pressure in Japan, while industrials and commodities-linked stocks led gains in Australia and South Korea. Investors also factored in local market holidays, including Sri Lanka’s Colombo Stock Exchange observing Independence Day, which limited regional activity. For February 4, Asian markets are likely to react to overnight U.S. performance, currency fluctuations, and ongoing macroeconomic data releases.

Tel Aviv: Broad-Based Rally Across Major Indices

The Tel Aviv Stock Exchange recorded strong gains on February 3, 2026. The TA-35 index rose 1.74% to 4,119.81 points, TA-90 advanced 1.39% to 4,092.13, and TA-125 increased 1.65% to 4,106.97. Sector-specific indices also recorded positive performance, with the TA-125 Value Index climbing 2.02% to 4,303.28 and the TA Sector-Balance Index rising 1.90% to 4,755.71. Total equity market turnover reached approximately 5.25 billion NIS, while bond markets saw 4.05 billion NIS in trading volume.

Investor sentiment was supported by domestic liquidity, selective inflows into high-quality stocks, and optimism in structural sectors such as banking and industrials. Despite global caution, the Tel Aviv market demonstrated resilience, positioning it as a potential safe haven for regional and international investors.

Market Outlook: February 4, 2026

Looking ahead, global investors will closely monitor U.S. earnings updates, interest rate signals, and geopolitical developments, while currency movements and macroeconomic indicators are expected to continue shaping market dynamics. European and Asian markets may remain selective in their advances, whereas Tel Aviv equities are likely to maintain momentum given domestic liquidity support. Elevated volatility in the U.S. suggests early caution in global trading sessions, highlighting the importance of strategic positioning for cross-border portfolios.