The main events are clearly marked on the calendar. Wednesday brings the January jobs report, still treated as the most trusted window into the health of the U.S. economy, even though it increasingly tells us more about where we were than where we're going. Friday follows with inflation data, the metric that decides whether rate cuts remain a summer story or get pushed further into the future. Between those two releases, we'll also get updates on labor costs, jobless claims, retail housing activity, and the Employment Trends Index. By the end of the week, we'll know a lot more, or at least we'll argue about it with greater confidence.

This explains the uneasy tone at the open. Concerns are stacking up. Some investors are worried that the economy is slowing more than it appears. Others are nervous that artificial intelligence spending has crossed the line from ambitious to excessive. These fears aren't new, but they've become harder to ignore after the market's recent mood swings.

That anxiety makes last week's ending all the more striking. Just days ago, U.S. equities looked fragile. Software stocks were sliding, nerves around artificial intelligence spending were fraying, and investors were quietly wondering whether too much money had chased too few guarantees. By Friday morning, even experienced market watchers were bracing for the possibility that things could get ugly.

Instead, markets snapped back hard. The S&P 500 jumped 2%. The Nasdaq 100 rose more than 2%. The Dow climbed 2.5% and pushed past 50,000 points for the first time. The Russell 2000 surged 3.6%. What looked like a potential rout turned into a relief rally powerful enough to reset the mood, if not fully calm it.

That rebound mattered not just for its size, but for its breadth. The Dow's gains were led by consumer staples, healthcare, industrials, and financials, sectors that don't usually scream speculative frenzy. At the same time, semiconductor stocks joined the party, helped along by Nvidia's Jensen Huang offering reassurance that the massive investments powering the AI boom are not, in fact, a collective hallucination. Huang has a habit of sounding like the most confident person in the room, which can be both comforting and mildly concerning. He is, after all, selling the future while helping to define it. Still, markets listened.

The result was a rally that spread well beyond a handful of mega-cap names. That's an important shift. For much of the past year, gains depended heavily on a small group of dominant technology companies. Now, smaller and mid-sized firms are getting more attention. The Russell 2000 is up more than 7% since the start of the year, far ahead of the S&P 500 and the Nasdaq 100. Valuations help explain why. Smaller companies are cheaper, by a lot, and earnings this season have been good enough to justify a second look.

Macro data also played a role. Mixed economic signals late last week nudged expectations toward easier monetary policy, lifting risk appetite across stocks, metals, and even bitcoin. When investors think rates might fall, optimism tends to spread quickly, sometimes faster than caution would recommend.

Beyond U.S. markets, politics is adding fuel to the global mood. In Japan, a decisive election win for Prime Minister Sanae Takaichi has sparked a rally in equities, driven by expectations of more government spending and policy stability. Bonds sold off, a reminder that confidence often comes with a bill attached.

Oil prices slipped after positive comments on U.S.-Iran nuclear talks. There are tentative signs of progress toward a ceasefire in Ukraine. None of this resolves long-term risks, but it does help explain why markets are leaning cautiously optimistic rather than outright defensive.

The coming days will test whether last Friday's rally was the start of something sturdier or simply a collective exhale before the next surprise. Jobs data, inflation numbers, and a packed earnings calendar will decide whether confidence deepens or cracks. For now, investors are watching, waiting, and trying very hard not to blink first.

On the corporate agenda, the quarterly earnings season remains dense . Companies reporting include Coca-Cola, Cisco Systems, T-Mobile US, McDonald's and Applied Materials on the other.

Today's economic highlights:

On today's agenda: consumer confidence in Switzerland; the Bank of Canada's Market Participants Survey; ECB President Lagarde's speech for the Euro Area; in the United States, speeches by Fed's Waller and Bostic. See the full calendar here.

  • Dollar index: 97,035
  • Gold: $5,020
  • Crude Oil (BRENT): $68.04 (WTI) $63.50
  • United States 10 years: 4.24%
  • BITCOIN: $69,190

In corporate news:

  • Paul Weiss chairman Brad Karp resigned after disclosures of past contacts with Jeffrey Epstein undermined his leadership, though he remains at the firm serving clients.
  • DBS Group increased its stake in Shenzhen Rural Commercial Bank to 19.9%, strengthening its exposure to China's banking sector.
  • A consortium led by FedEx and Advent agreed to acquire parcel-locker operator InPost for about €7.8 billion to expand delivery infrastructure across Europe.
  • DSM-Firmenich agreed to sell its Animal Nutrition & Health business to CVC Capital for an enterprise value of about €2.2 billion.
  • NatWest Group agreed to buy UK wealth manager Evelyn Partners for £2.7 billion to accelerate growth in wealth management.
  • Kroger shares jumped after reports the grocer will appoint former Walmart executive Greg Foran as its new CEO.
  • Germany's Federal Cartel Office approved the merger between IBM and Confluent, clearing a key regulatory hurdle.
  • The European Union warned Meta Platforms it may impose interim measures over alleged antitrust breaches linked to blocking rival AI chatbots on WhatsApp.
  • Adyen and Uber expanded their global partnership, launching phone-free Uber kiosks that allow riders to book trips without the app.
  • Elon Musk announces that the Tesla heavy goods vehicle will go into mass production this year.
  • Apple plans to allow external voice-activated AI chatbots in CarPlay, according to Bloomberg.

Analyst Recommendations:

  • Align Technology, Inc.: HSBC upgrades to buy from hold and raises the target price from USD 150 to USD 200.
  • Ares Management Corporation: Raymond James upgrades to strong buy from market perform with a target price of USD 157.
  • Corteva, Inc.: UBS downgrades to neutral from buy and reduces the target price from USD 81 to USD 80.
  • Crown Holdings, Inc.: UBS downgrades to neutral from buy with a target price of USD 126.
  • Doximity, Inc.: Canaccord Genuity upgrades to buy from hold and reduces the target price from USD 48 to USD 34.
  • Philip Morris International, Inc.: Anchor Securities Stockbrokers downgrades to hold from buy and raises the target price from USD 177 to USD 192.
  • Renaissancere Holdings Ltd.: Citi downgrades to neutral from buy and raises the target price from USD 298 to USD 328.
  • Take-Two Interactive Software, Inc.: Baptista Research upgrades to buy from hold with a target price of USD 277.20.
  • Teradyne, Inc.: President Capital Management Corp downgrades to neutral from buy with a price target raised from USD 209 to USD 308.
  • The Timken Company: KeyBanc Capital Markets upgrades to overweight from sector weight with a target price of USD 130.
  • Viatris Inc.: UBS upgrades to buy from neutral with a price target raised from USD 11 to USD 18.
  • Westlake Corporation: Mizuho Securities downgrades to neutral from outperform with a target price of USD 88.
  • Biogen Inc.: Guggenheim maintains its buy recommendation and raises the target price from USD 185 to USD 246.
  • Bloom Energy Corporation: Mizuho Securities maintains its neutral recommendation and raises the target price from USD 89 to USD 110.
  • Coty Inc.: Deutsche Bank maintains its hold recommendation and reduces the target price from USD 4 to USD 3.
  • Hims & Hers Health, Inc.: Citi maintains its sell recommendation and reduces the target price from USD 30 to USD 16.50.
  • Hubspot, Inc.: Bernstein maintains its outperform recommendation and reduces the target price from USD 602 to USD 448.
  • Paypal Holdings, Inc.: Deutsche Bank maintains its hold recommendation and reduces the target price from USD 60 to USD 45.
  • Stellantis N.v.: Evercore ISI maintains its in-line recommendation and raises the target price from EUR 7.50 to EUR 10.
  • Texas Instruments Incorporated: Arete Research maintains its neutral recommendation and raises the target price from USD 192.80 to USD 264.