Pre-Market Report – Wednesday 4 February: US markets see rotation | Tech and software sold down

USS equities had a soggy Tuesday. Not disaster territory, but definitely a “this could’ve been worse” close after things looked uglier earlier. Tech was the problem child. Again. Software got smacked, dragging down the usual suspects — BDCs, private equity names and financial data plays all caught in the downdraft. The AI trade wasn’t spared either, with semis, Nvidia/OpenAI ecosystem stocks, retail favourites and crypto proxies all leaning the wrong way. Other soft spots: China tech, Payments, Rails, Entertainment. Basically, if it had momentum and a story, it got trimmed.

This wasn’t a full risk-off panic Under the surface, money didn’t leave the market — it just changed seats. Cyclicals actually had a decent day, which is not what you’d expect if recession fear was the driver.

Winners included: Small caps, Homebuilders (helped by the rumoured “Trump homes” affordability push), Industrial metals, Chemical Plus: Staples strong (yes, Walmart now a $1T stock — let that sink in)

This looked more like rotation than “sell everything and hide.”

SPI down 20 - Commodities rally - Gold up over 5%

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