The Dow Jones Industrial Average experienced mixed activity on Tuesday, dropping around 166 points or 0.3% after initially hitting an intraday record of 49,653.13. The S&P 500 fell by 0.8%, while the Nasdaq Composite decreased by 1.4%, driven by a downturn in technology stocks and a notable fall in PayPal Holdings Inc.<\/p>\n
The US House approved a spending package of over $1 trillion, ending a partial government shutdown. The bill funds several departments through September, but the Department of Homeland Security received only a two-week funding extension as immigration reforms are discussed.<\/p>\n
Enterprise software stocks continued to decline due to growing concerns over artificial intelligence’s impact on business models. The tech-software sector saw a 5% drop, with IBM, Salesforce, and ServiceNow facing significant losses.<\/p>\n
Walmart Inc.’s shares hit an intraday high, pushing its market capitalisation past $1 trillion. This followed a two-year stock rally supported by e-commerce growth and the expansion of its membership programme.<\/p>\n
PayPal Holdings Inc. saw a near 19% drop after missing earnings expectations and announcing a CEO change. The firm’s outlook worried markets, anticipating flat or slightly declining earnings.<\/p>\n
Palantir Technologies Inc. saw a 7% rise after exceeding analyst expectations with strong fourth-quarter results and a bullish revenue forecast. The company experienced a 137% increase in US commercial revenue.<\/p>\n
Gold and Silver prices rebounded after recent declines, driven by a stronger US Dollar and increased margin requirements. Spot Gold rose over 5%, and Silver surged roughly 10%, with mining stocks also gaining.<\/p>\n
The Dow Jones Industrial Average, a price-weighted index of 30 prominent US stocks, is influenced by various factors, including corporate earnings and Federal Reserve interest rates. Dow Theory is used to identify trends by comparing the DJIA with other indices.<\/p>\n
Joshua Gibson, who wrote this article, has been an independent trader for over twelve years, specialising in technical analysis.<\/p>\n
Given the market’s current state on February 4, 2026, we see a clear divergence that presents opportunities. The Dow touching a new record while the Nasdaq sells off suggests a rotation out of growth-oriented technology and into more defensive, value-driven names. We should adjust our strategies to capitalize on this split sentiment, focusing on individual sector performance rather than the market as a whole.<\/p>\n
The weakness in enterprise software is a primary concern and a potential area for profit. With the iShares Expanded Tech-Software Sector ETF falling over 22% from its recent highs, we should consider buying put options on this ETF or on specific struggling names like IBM and Salesforce. This trend is driven by fundamental fears that AI will disrupt their business models, a sentiment that is unlikely to fade in the coming weeks.<\/p>\n
Conversely, the exceptional strength of Palantir shows that the market is rewarding companies that are clear winners in the AI space. Its revenue growth, which surged 70% year-over-year, and massive guidance beat indicate strong momentum. We could look to purchase call options on Palantir to participate in its expected continued outperformance.<\/p>\n
The record-setting valuation of Walmart confirms the flight to safety and consumer staples. With its Walmart+ membership now at 28.4 million, the company is capturing budget-conscious consumers, a trend that is likely to persist amid economic uncertainty. We see this as an opportunity to buy calls on Walmart or the broader Consumer Staples Select Sector SPDR Fund (XLP) as a defensive play.<\/p>\n
PayPal\u2019s steep 19% drop after its earnings miss and CEO change signals deep-seated issues. The combination of a weak profit outlook and market share losses to competitors like Apple Pay makes it a prime candidate for further declines. We believe purchasing put options on PayPal offers a way to speculate on this continued downward pressure.<\/p>\n
We must also pay attention to the sharp recovery in precious metals. Gold\u2019s jump back to around $4,900 an ounce indicates that underlying support remains strong, possibly as a hedge against the recent tech volatility. We can trade this renewed momentum by going long gold or silver futures contracts, or by using call options on their related ETFs.<\/p>\n
This tech rotation feels reminiscent of the valuation concerns we saw in early 2025, when high-growth software stocks also pulled back sharply. The CBOE Volatility Index (VIX) jumped to 17.8 yesterday, its highest point in two months, reflecting the rising uncertainty in the tech sector. We should prepare for this elevated volatility to continue, making options strategies with defined risk particularly attractive.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Dow drops amid tech losses; PayPal plunges, Walmart hits $1T, Palantir surges, gold and silver rebound.<\/p>\n","protected":false},"author":62,"featured_media":16989,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43550","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43550","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=43550"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43550\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16989"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=43550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=43550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=43550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}