NEW YORK, February 2, 2026 — Wall Street finished Friday’s session in the red, rattled by President Donald Trump’s nomination of former Federal Reserve Governor Kevin Warsh to be the Fed’s next chairman and a sharp decline in precious metals prices. But despite the late-week stumble, January proved a positive month for major market indexes.
January Gains Despite Friday’s Dip
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Major averages recorded monthly gains, even with Friday’s losses.
- The Dow Jones Industrial Average rose 1.1% in January.
- The S&P 500 gained 1.2% for the month.
- The Nasdaq Composite notched a 1% increase.
- The Russell 2000 jumped over 4% in January.
The 30-stock Dow Jones Industrial Average and benchmark S&P 500 logged gains of 1.1% and 1.2%, respectively, for January, while the tech-heavy Nasdaq Composite notched a 1% gain. The small-cap Russell 2000 saw the biggest jump, rising more than 4% during the month. Investors are bracing for potential volatility in the coming days as they assess the economic outlook, inflation, interest rates, and corporate earnings.
What economic data will investors be watching closely? Friday’s U.S. employment report for January is expected to show the economy added 67,000 positions, with the unemployment rate holding steady at 4.4%. The ISM manufacturing and services PMIs will also be closely monitored ahead of the jobs report.
Several significant earnings reports are also due, including those of Amazon (NASDAQ:AMZN) and other “Magnificent Seven” companies. AI powerhouses Palantir Technologies (NASDAQ:PLTR) and Advanced Micro Devices (NASDAQ:AMD) will also be in focus, along with Eli Lilly, Novo Nordisk, Pfizer, Pepsico, Walt Disney, PayPal, Uber, Reddit, Roblox, Snap, Qualcomm, and Super Micro Computer.
Adding to the week’s complexities, the federal government briefly entered a shutdown on Saturday, though it is expected to conclude on Monday.
Stock to Buy: Alphabet
Alphabet is heading into its quarterly report with expectations of better-than-expected earnings and revenue growth, fueled by a resurgent ad business and accelerating contributions from artificial intelligence across Search, YouTube, and Google Cloud. The Q4 update is scheduled for release after market close on Wednesday at 4:00 PM ET.
The options market anticipates a move of +/-6.4% in either direction, with a strong bias toward the upside, as 80% of “whisper numbers” predict a positive surprise. Profit estimates have been revised upward 29 times in recent weeks, with only five downward revisions, indicating growing optimism around Alphabet’s earnings potential. Consensus estimates call for earnings of $2.64 per share, a 21.8% increase year-over-year, and revenue of $111.1 billion, up 15.7% from the prior year. Google Cloud Platform is expected to post over 37% annualized sales growth, driven by strong demand for AI infrastructure and enterprise solutions.
A strong earnings beat, coupled with optimistic forward guidance, could propel the stock to new highs as the company monetizes its AI initiatives and cloud momentum. GOOGL stock is currently trading near its 52-week high ($342.29), above its 50-day moving average ($317.97), and has delivered an 8% year-to-date return and a 66.3% gain over the past year. Technically, the stock has shown resilience, consolidating above key support levels around $325, with potential for a breakout above $350 on positive earnings.
Alphabet Trade Setup
- Entry: $338-$340 (pre-earnings)
- Target: $350-$355 (gain ~5%)
- Stop-Loss: $330 (risk ~2.4%)
Stock to Sell: Strategy
Strategy, by contrast, is set to report earnings under challenging circumstances. The Michael Saylor-led company, now the world’s largest corporate holder of Bitcoin, faces headwinds from cryptocurrency volatility. The firm currently holds approximately 712,647 Bitcoin, acquired at an average price of about $76,037 per BTC, totaling over $54 billion in value at recent prices. However, Bitcoin’s price recently dipped below this average cost basis for the first time since October 2023, putting the company’s holdings underwater and raising concerns about unrealized losses.
Strategy is due to report its Q4 earnings results after the close on Thursday at 4:20 PM ET. Analysts expect a loss of -$0.08 per share and revenue of $118.8 million, but the primary focus will be on its Bitcoin treasury and potential impairment charges. The company reported a staggering $17.44 billion unrealized loss in Q3 2025 due to crypto declines, and similar impairments could weigh on Q4 results.
With shares trading at a discount to net asset value (around 0.7x its Bitcoin holdings), the stock’s beta of 3.4 amplifies downside risks in a risk-off environment. MSTR stock is down 55.3% over the past year and is trading at $149.71, barely above its 52-week low ($139.36). Technically, shares have broken below their 50- and 200-day moving averages, with momentum indicators signaling oversold conditions but no clear reversal.
Strategy Trade Setup
- Entry: $149.71
- Target: $130 (gain ~12.7%)
- Stop-Loss: $155 (risk ~4%)
Disclaimer: This is not financial advice. Always conduct your own research.
At the time of writing, I am long on the S&P 500 and the Nasdaq 100 via the SPDR® S&P 500 ETF and the Invesco QQQ Trust ETF. I am also long on the Technology Select Sector SPDR ETF. I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.
