Global markets experienced broad-based weakness on February 5, 2026, reflecting a combination of profit-taking, elevated volatility, and cautious positioning ahead of upcoming macroeconomic data. U.S. indices led the declines, pulling European markets lower, while Asia posted mixed results, highlighting regional divergences in investor sentiment. Tel Aviv mirrored this global trend, posting declines across multiple indices as investors weighed risk in domestic equities.

Americas: U.S. Markets Retreat as Volatility Spikes

U.S. equities experienced a notable sell-off on February 5, with the Dow Jones Industrial Average closing at 48,908.72, down 1.20%, the S&P 500 falling 1.23% to 6,798.40, and the Nasdaq losing 1.59% to 22,540.59. Small-cap stocks under the Russell 2000 declined 1.79%, underscoring broad weakness. The VIX volatility index surged 16.79% to 21.77, reflecting elevated investor concern over earnings results, interest rate expectations, and broader economic uncertainty.

Commodity-linked and cyclical sectors were most affected, while defensive equities and utilities saw relatively lower declines. U.S. dollar strength, as measured by the US Dollar Index up 0.05% to 97.87, contributed to downward pressure on multinational earnings expectations, particularly for export-sensitive companies. The session also reflected pre-positioning ahead of corporate earnings announcements and key economic data releases scheduled for February 6.

Europe: Broad-Based Weakness on Macro Concerns

European indices followed the U.S. lead, with the EURO STOXX 50 declining 0.75% to 5,925.70, the DAX down 0.46% to 24,491.06, and the CAC 40 losing 0.29% to 8,238.17. The FTSE 100 declined 0.90% to 10,309.22, while the MSCI Europe index dropped 1.09% to 2,735.59. Currency pressure from the Euro Index, down 0.22% to 117.80, and the British Pound Index down 0.90% to 135.29, reflected investor caution on growth prospects and monetary policy expectations.

Sectorally, financials and industrials faced selling pressure as bond yields remained elevated and European Central Bank policy expectations remained uncertain. Investors also monitored U.S. market weakness, which exerted additional cross-border influence, particularly for European multinational equities.

Asia: Mixed Trading with Regional Divergence

Asian markets presented a mixed picture on February 5. Japan’s Nikkei 225 gained 0.54% to 54,111.25, supported by technology and export-oriented equities. In contrast, South Korea’s KOSPI fell 1.87% to 5,066.88, and Australia’s S&P/ASX 200 declined 1.99% to 8,712.60, reflecting weakness in financials, mining, and growth-sensitive sectors. The Hang Seng dropped 1.18% to 26,567.68, while China’s SSE Composite edged higher by 0.11% to 4,080.31. Currency movements, including a weaker Japanese yen and Australian dollar, contributed to regional disparities.

Investors remained cautious as they positioned defensively ahead of key economic data and corporate earnings announcements, weighing both growth momentum and geopolitical factors affecting regional trade and supply chains.

Tel Aviv Market: Broad Declines Across Major Indices

Tel Aviv’s equities reflected global risk-off sentiment. The TA-35 index fell 1.98% to 4,039.01 on a turnover of 8.49 billion NIS, while the broader TA-90 declined 1.30% to 4,011.34. Sector-specific indices, including the TA-90 Banks and TA-90 Value, dropped between 1.19% and 1.40%, with trading volumes indicating dominant selling pressure. Short-term bond indices showed minimal movement, with the short-term All-Bond index rising slightly by 0.03%, suggesting defensive positioning in fixed income. Overall, market breadth was negative, with declines in the majority of listed securities.

Outlook for February 6, 2026: Risk Management and Volatility in Focus

Looking ahead to February 6, markets are likely to remain sensitive to earnings announcements, economic data releases, and currency fluctuations. U.S. futures indicate continued downside pressure, while Asian markets may exhibit divergent performance depending on local corporate earnings and macro developments. For Israeli investors, maintaining liquidity, monitoring global trends, and evaluating exposure to cyclical sectors will be essential as market participants navigate volatility. Volatility metrics, including the VIX and regional FX indices, will serve as early indicators of sentiment, shaping positioning in equities, bonds, and multi-jurisdictional portfolios.