Market Update: Afternoon Trading Highlights

• Workday Inc. (WDAY) saw its stock plummet over 6% after announcing that co-founder Anil Bhosri will step back in as CEO, taking over from Karl Eschenbach, who will still serve as a strategic advisor.

• Kroger Co. (KR) experienced a surge of more than 6% in its stock price following the appointment of Greg Foran as CEO, replacing interim CEO Ron Sargent, who will also join the board of directors.

• Transocean (RIG) and Valaris (VAL), two offshore drilling firms, have agreed to merge in an all-stock transaction valued at around $5.8 billion, with Transocean shareholders expected to own about 53% of the newly formed entity.

• Monday.com (MNDY) shares dropped more than 20% after the company issued disappointing guidance for 2026, overshadowing their profits and revenue growth from the fourth quarter.

• Sally Beauty Holdings (SBH) shares rose roughly 4.5% after reporting fiscal first-quarter earnings that slightly exceeded Wall Street expectations.

• Him & Hers (HIMS) shares fell around 23% after announcing the discontinuation of a combined oral version of semaglutide due to regulatory scrutiny.

Wells Fargo anticipates that the upcoming January U.S. Consumer Price Index (CPI) report will clarify the inflation landscape as last year’s government shutdown effects dissipate. The bank projects a core CPI increase of 0.33% month-on-month, slightly above the 2025 average, while the overall CPI is expected to rise 0.25%, influenced by food and gasoline prices.

Wells Fargo explained, “The updated factors from last January’s price surge may lead to optimism about a strong start to the year, but we still worry that pandemic-related seasonal distortions could skew the data.”

The central bank mentioned that delays in passing on tariff costs are contributing to stability in core goods prices, and they expect moderate inflation in services. Wells Fargo does not foresee the economy cooling off in 2026, thanks to ongoing supportive fiscal and monetary policies, despite slight declines in both headline and core CPIs year-over-year.

On Monday, tech stocks bounced back, although the Dow Jones fell below the 50,000 mark.

Chris Beauchamp, chief market analyst at IG, remarked, “It was a relatively calm risk-on day for the broader market following the election results in Japan over the weekend. The Dow hasn’t maintained its position above 50,000 as of now, but the rebound in tech stocks indicates that this rotational bull market may be reversing. This week, macroeconomic indicators will attract attention, as lackluster job and inflation data could support dovish expectations from the Federal Reserve.”

Meanwhile, precious metals prices rose, with gold regaining the $5,000 mark after a week of wild fluctuations. Beauchamp noted, “Gold’s resurgence comes after last week’s instability… A renewed rally in gold and silver might pose the biggest threat to Bitcoin right now, overshadowing cryptocurrencies and their peers.” Bitcoin’s rally has stalled, pointing to an ongoing disconnect between traditional safe assets and digital currencies.

Stocks in telehealth company Him & Hers (NYSE: HIMS) faced a 25% decline after the firm announced the discontinuation of its combined oral formulation of semaglutide amid regulatory concerns. Initially, the company intended to market the drug as a more affordable option compared to Novo’s recent oral product launch.

The U.S. Food and Drug Administration also hinted at potentially restricting access to the active components in popular GLP-1 medications like Wegovy, Ozempic, and Zepbound, possibly referring the issue to the Department of Justice.

This week promises to be busy and possibly volatile on Wall Street. Investors are managing a crowded earnings calendar amidst delays caused by sluggish U.S. economic data, and anxiety continues from a significant shift that impacted stocks and cryptocurrencies.

Last week, the Dow Jones Industrial Average topped 50,000 for the first time, but instead of a celebration, markets are debating whether last Friday’s rally represented a turning point or just a pause in February’s erratic trading.

Another 78 companies from the S&P 500, including Dow components like The Coca-Cola Company (NYSE:KO), McDonald’s Company (NYSE:MCD), and Cisco Systems, Inc. (NASDAQ:CSCO), are set to report their earnings. Notable reports are also expected from ON Semiconductor (NASDAQ:ON), Ford Motor Company (NYSE:F), AstraZeneca PLC (LSE:AZN, NASDAQ:AZN), and Applied Materials (NASDAQ:AMAT).

On the economic front, the delayed December retail sales figures will be announced on Tuesday, followed by the not-yet-released January employment report on Wednesday and the January CPI on Friday.

As trading began, major stock indexes in Wall Street started lower, though there was a wide variation in performance. The Dow Jones dropped 0.5%, moving away from its recent high, while the S&P 500 declined slightly by less than 0.1%. The Nasdaq has had a marginal lead with gains just under 0.1%.

Among significant players, Nvidia increased by 2% and Microsoft by 1.3%, while Apple and Amazon saw declines of 1.5% and 2.9% respectively. The Dow faced downward pressure from companies like Apple, Amazon, IBM, Salesforce, Merck, and Amgen. Apollo Global Management shares rose by 5.1% following its earnings report.

As U.S. futures slipped into negative territory on Monday morning, it reversed some of the sizeable gains from last weekend’s rally.

Other than consumer inflation expectations, no major data is out today, but several indicators such as retail sales and delayed January nonfarm payrolls are expected later this week.

This morning, Nasdaq futures dipped by 0.5%, while the S&P 500 and Dow Jones fell 0.3% and 0.2%, respectively, stepping back from last weekend’s significant highs.

In European trading, the dollar weakened—down 0.55% against the euro and 0.3% against the pound, with the DXY index slipping 0.4% to 97.22. Bitcoin has seen a recovery from last week’s lows but fell by 2.5%, remaining below $70,000.

Last week, the Dow Jones Industrial Average made a notable gain of 1,207 points (2.5%), closing above 50,000 for the first time in its history at $50,115. The S&P rose by 2% to 6,932, marking its highest trading day since May last year, while the Nasdaq saw a 2.2% increase to 23,031, recovering from a sharp decline a day earlier. Smaller stocks performed the best, with the Russell 2000 rising by 3.6% to 2,670.

This followed a downturn mostly impacting software stocks, triggered by the launch of Anthropic’s new enterprise tools aimed at the AI sector.

Kenny Porcari, a market analyst at SlateStone Wealth, commented that the dramatic stock movement illustrates how markets can overreact, as trading algorithms responded impulsively to headlines, resulting in frantic trading behavior.

He noted, “What actually changed on Friday morning? Nothing substantial shifted, and that’s the essence of it. The buyers pushing valuations sky-high finally hit a wall. The headline sparked panic, making investors reconsider the prices they were paying.”

“Leverage became a concern, traders grew anxious, protective stops were triggered as prices fell, trend lines were breached, and short selling increased,” he added.

He further explained, “The collapse of precious metals, the dollar’s rise, the downturn in cryptocurrencies—buyers exited, creating a price vacuum which led to self-inflicted fear.”

“The same principle applies on the way down: prices become detached from fundamentals as the pendulum swings too far in both directions.”

After a period of stabilization on Friday morning, the narrative simply shifted, leading the algorithms to “do their usual thing: swap positions, accelerate buying, and short sellers rushed to cover. Suddenly, the crowd that was driving down stock prices shifted to pushing them up,” he expressed.

“Without fresh bad news to fuel the panic, investors who had initially exited at the start of the week quickly returned. And just like that, it’s another typical day on Wall Street. You don’t need positive news for a market rebound; you just need bad news to halt further declines.”

This week, investors initially interpreted concerns around AI’s potential impact—suggesting that it could obliterate jobs and profit margins as well as disrupt entire industries overnight. That anxiety spurred a fourth consecutive day of selling, but by Friday morning, it was evident that nothing fundamentally had really changed, Porcari remarked.

“The adoption of AI is still slow, monetization is in its early stages, and the biggest players continue to hold the necessary infrastructure, data, and capital to succeed.”