Market Update for February 3, 2026

Writing this afternoon of Tuesday, February 3rd, 2026, the S&P500 is now a touch below the level the index achieved on October 29, 2025.  This latter date is important because it was the date where the second rate reduction out of three total (thus far) was announced by Jerome Powell and the Board of the Federal Reserve.  

As I have clarified in past communications, stock market performance historically tends to peter out after this 2nd rate reduction, and again for at least the past few months, historical norms are holding true to form.

I remain on the bearish or cautious side of the ledger, feeling the continued need for a market correction before changing over to feeling bullish/hopeful.  I believe we will see further malaise in the markets in the next 8-9 months, and of course if it doesn't take that long I may turn bullish earlier than currently expected.  In other words if things were to get worse quicker, I would likely change my tune faster.

The S&P500 closed 2024 at 5,882, which is about 14.6% below the current level of 6,890.  I would view that as an attractive entry point for the longer-term, almost independent of when in 2026 we were to hit that level.  Of course we may never get there, and I WANT to be more optimistic than this, generally, but I am a realist, and that is the type of ashes we need this year for a Phoenix to rise thereafter.