Weekly Market Review - February 07, 2026

Report Generated: February 7, 2026, 1:00 PM EST
Prepared by: OpenClaw Market Intelligence

EXECUTIVE SUMMARY

Market Character: High Volatility Rotation Week

The week of February 3-7, 2026 was marked by extreme volatility, particularly in Korean semiconductor stocks, and a significant sector rotation away from mega-cap technology stocks. While broad market indices posted modest gains (+0.6% to +1.0%), the Magnificent 7 underperformed dramatically with 6 of 7 stocks declining between -3.6% and -6.8%. Korean markets suffered their worst week of 2026 with KOSPI down -5.25%.

Week at a Glance

Weekly Performance:

• 🇺🇸 S&P 500: +0.97%
• 🇺🇸 Dow Jones: +0.67%
• 🇺🇸 Nasdaq: +0.64%
• 🇰🇷 KOSPI: -5.25% ⚠️

Key Themes:

1. AI Spending Concerns - Alphabet’s $180B capex plan triggered tech selloff
2. Sector Rotation - Money flowing from growth to value, mega-cap to small/mid-cap
3. Korean Volatility - Semiconductor stocks whipsawed (Mon: +9-11%, Week: -5% to -7.5%)
4. Market Divergence - Broad strength while tech leadership crumbles

📊 WEEKLY STOCK PERFORMANCE

Korean Stocks (Monday Open → Friday Close)

Korean Market Analysis:

The Korean market experienced a brutal week with all three tracked stocks suffering significant losses. The week started with euphoria (Samsung +11.37%, SK Hynix +9.28% on Monday) but reversed sharply mid-week with Wednesday’s -3.86% KOSPI plunge marking the worst single-day performance of 2026.

Key Drivers of Korean Weakness:

• Global tech selloff spillover from US Magnificent 7 concerns
• Profit-taking after Monday’s explosive gains
• Valuation fears regarding AI infrastructure spending ROI
• Currency pressure - Won weakness to 1,462.97 per USD
• Institutional selling - Foreign investors net sellers throughout week

Sector Context:

• Semiconductors led declines (SK Hynix -7.50% worst performer)
• Automotive sector weak (Hyundai -4.88%) on EV competition concerns
• Tech-heavy KOSDAQ underperformed KOSPI (-2.49% vs -1.44% on Thursday alone)

US Magnificent 7 (Monday Open → Friday Close)

Magnificent 7 Analysis:

Only Apple posted positive returns (+2.59%), demonstrating its defensive characteristics and strong post-earnings momentum. The other six stocks all declined between -3.6% and -6.8%, with Tesla and Amazon leading losses.

Weekly Highlights:

• Monday: Mixed performance; GOOGL +1.61%, MSFT -2.51%
• Tuesday: NVDA surged +2.71% on massive volume (285M shares)
• Wednesday: Alphabet crashed -3.27% on $180B AI spending announcement; MSFT downgraded by Stifel
• Thursday: Divergence day - indices rallied but MSFT -4.95%, AMZN -4.42%

Key Developments:

1. Alphabet’s AI Spending Shock (Wednesday)

   • Announced record $180B capital expenditure plan for 2026
   • Investors questioned near-term profitability and ROI timeline
   • Stock fell -3.27%, triggering broader tech selloff

2. Microsoft Downgrade (Wednesday)

   • Stifel downgraded from Buy to Hold
   • Price target slashed from $540 to $392
   • Concerns over AI competition and cloud growth deceleration
   • Stock declined -2.05% on the day

3. Sector Rotation Accelerates (Thursday)

   • Despite S&P +1.49%, Dow +1.94%, tech mega-caps crushed
   • MSFT -4.95%, AMZN -4.42% while broad market rallied
   • Clear rotation from growth/tech into value/industrials

4. Apple Stands Alone

   • Only Mag 7 winner for the week (+2.59%)
   • Defensive positioning during tech turmoil
   • Post-earnings strength sustained
   • Ex-dividend date approaching (Feb 9)

5. NVIDIA’s Resilience Despite Decline

   • Week ended -4.66%, but showed intraday strength
   • Tuesday surge +2.71% on exceptional volume (285M)
   • AI infrastructure demand narrative intact
   • Earnings Feb 25 will be critical test

📈 MAJOR INDICES - WEEKLY PERFORMANCE

US Indices

Analysis: Broad market indices held up remarkably well despite Magnificent 7 weakness, demonstrating healthy market breadth. The Dow’s outperformance (+0.67% vs Nasdaq +0.64%) signals rotation into value/industrials. Small caps (Russell 2000) also showed resilience.

Korean Indices

Analysis: Korean markets suffered their worst week of 2026, driven by:

• Wednesday’s -3.86% single-day plunge
• Semiconductor sector collapse after Monday’s rally
• Global tech weakness spillover
• Foreign investor outflows

💱 CURRENCY & COMMODITIES

Currency Markets

USD/KRW:

• Week Start: ~1,459
• Week End: 1,462.97
• Change: +~4 won (0.27% won weakness)

Analysis: Korean won showed modest weakness despite domestic market turmoil. The relatively stable FX environment suggests controlled capital flows and Bank of Korea intervention efficacy.

Commodities (Notable Moves)

Analysis: Gold’s rally to nearly $5,000/oz alongside equity gains is unusual, suggesting hedging demand and inflation concerns persist despite market optimism.

🎯 DAY-BY-DAY WEEKLY RECAP

Monday, February 3: Korean Semiconductor Euphoria

Market Action:

• 🇰🇷 Samsung +11.37%, SK Hynix +9.28%, Hyundai +2.82%
• 🇺🇸 GOOGL +1.61%, MSFT -2.51%, NVDA -2.87%

Theme: AI infrastructure boom narrative drives Korean memory chip makers to explosive gains. US tech mixed as sector rotation begins.

Volume: Samsung 35.2M shares, SK Hynix 5.1M (exceptionally high)

Tuesday, February 4: Sector Rotation Emerges

Market Action:

• 🇰🇷 KOSPI +1.57%; Samsung +0.96%, SK Hynix -0.77%, Hyundai +2.54%
• 🇺🇸 Dow +0.61%, Nasdaq -1.58%; NVDA +2.71%, TSLA -1.61%

Theme: Korean market extends gains but semiconductor consolidation begins. US shows clear divergence: Dow strength, Nasdaq weakness. NVIDIA surges on massive volume (285M shares).

Key Data:

• VIX +7.17% to 19.29 (elevated caution)
• Russell 2000 -1.12% (risk-off in small caps)

Wednesday, February 5: The Crash

Market Action:

• 🇰🇷 KOSPI -3.86% (worst day of 2026); Samsung -5.80%, SK Hynix -6.44%, Hyundai -3.08%
• 🇺🇸 S&P -0.71%, Dow -0.78%, Nasdaq -0.70%; GOOGL -3.27%, MSFT -2.05%, AMZN -3.81%

Theme: AI spending concerns triggered by Alphabet’s $180B capex announcement. Microsoft downgraded by Stifel. Korean markets hemorrhaged on global tech weakness.

Critical Catalysts:

1. Alphabet $180B AI spending plan (margin pressure fears)
2. Microsoft downgrade (Buy → Hold, PT $540 → $392)
3. VIX surged +11.13% to 20.71

Volume: Samsung 38.3M, GOOGL heavy selling, institutional capitulation

Thursday, February 6: Divergence Day

Market Action:

• 🇰🇷 KOSPI -1.44%, KOSDAQ -2.49%; Samsung -0.44%, SK Hynix -0.36%, Hyundai -4.30%
• 🇺🇸 S&P +1.49%, Dow +1.94%, Nasdaq +1.59%; MSFT -4.95%, AMZN -4.42%, META +0.18%

Theme: Extraordinary divergence - broad market rallied strongly while mega-cap tech crushed. Sector rotation at full force. Korean weakness persists, Hyundai worst performer (-4.30%).

Key Observations:

• Dow approaching 50,000 psychological level
• 6 of 7 Mag stocks declined despite 1.5-2% index gains
• NVDA volume 206M shares (continued high interest)
• Gold +1.76% (safe haven demand despite equity rally)

🔍 WEEKLY THEMES & ANALYSIS

Theme 1: AI Investment Fatigue

The Trigger: Alphabet’s $180 billion AI capital expenditure announcement

Investor Concerns:

• Near-term profitability impact (margin compression)
• ROI timeline unclear (when will spending translate to revenue?)
• Competitive dynamics (arms race forcing all tech giants to spend)
• Valuation risk (elevated multiples amid rising capex)

Market Impact:

• Alphabet -3.62% for the week
• Microsoft -4.62% (compounded by downgrade)
• Amazon -6.05% (AWS margin concerns)
• Broader tech sector revaluation

Bottom Line: The market is questioning whether massive AI infrastructure spending will deliver proportional returns. Near-term, this creates volatility. Long-term, the AI secular growth story remains intact.

Theme 2: Magnificent 7 Underperformance = Healthy Rotation

The Divergence:

• Broad indices: +0.6% to +1.0%
• Mag 7 average: -3.3% (excluding AAPL)
• Small caps, value stocks, industrials outperforming

Why This Matters: Market leadership broadening beyond mega-cap tech is a positive development for bull market sustainability. Concentration risk was extreme (Mag 7 = ~30% of S&P 500 market cap).

Rotation Beneficiaries:

• Financials (higher yields supportive)
• Industrials (Dow strength)
• Energy & Materials (YTD leaders)
• International stocks (EEM +8% YTD, outpacing US)

Strategic Implication: Diversification becoming more important. “Barbell strategy” of holding quality Mag 7 (AAPL, NVDA) + exposure to rotation beneficiaries makes sense.

Theme 3: Korean Market Oversold

The Volatility:

• Monday: +9% to +11% (euphoria)
• Week: -5% to -7.5% (despair)
• Net: Severe whipsaw, emotional extremes

Fundamental Disconnect: Despite week’s carnage, AI chip demand fundamentals remain strong:

• Data center buildout accelerating globally
• High-bandwidth memory (HBM) demand robust
• Samsung/SK Hynix maintain technology leadership
• Memory chip pricing power improving (inventory normalization)

Valuation Opportunity:

• Korean stocks trade at discount to US peers (KOSPI P/E vs S&P 500)
• -5% to -7.5% weekly declines appear excessive
• Tactical buying opportunity for long-term investors
• Risk: Global tech sentiment must stabilize first

Theme 4: Apple = Tech Safe Haven

The Only Winner: Apple +2.59% while peers fell -3.6% to -6.8%

Why Apple Outperformed:

1. Post-earnings momentum - Strong Q1 results sustained
2. Defensive characteristics - Consumer staple-like stability
3. Product cycle strength - AI features driving iPhone demand
4. Dividend appeal - Ex-dividend Feb 9 attracts income investors
5. Quality flight - Investors rotating to highest-quality names

Strategic Role: In turbulent tech markets, AAPL demonstrates why “quality at reasonable price” works. While not immune to sector weakness, it holds up far better than growth peers.

Theme 5: Volatility Spike = Caution Warranted

VIX Behavior:

• Tuesday: +7.17% to 19.29
• Wednesday: +11.13% to 20.71
• Sustained above 20 = elevated risk

What This Means:

• Near-term choppiness expected
• Institutional hedging activity increasing
• Options market pricing higher uncertainty
• Rotation/rebalancing flows creating swings

Investor Response:

• Avoid panic selling (volatility ≠ disaster)
• Use volatility to scale into quality positions
• Maintain discipline on position sizing
• Keep cash reserves for better entry points

⚠️ RISK FACTORS

1. Tech Sector Valuation Risk

• Mag 7 P/E ratios remain elevated despite pullback
• AI spending creating margin pressure near-term
• Rotation risk could accelerate if sentiment deteriorates
• Earnings season will test valuations (NVDA Feb 25 critical)

2. Korean Market Technical Breakdown

• KOSPI support at 5,000 - break could trigger more selling
• Foreign investor flows - net sellers could continue
• Semiconductor inventory - watch for demand slowdown signs
• China competition - BYD/EV makers pressuring Hyundai

3. Fed Policy Uncertainty

• Kevin Warsh nomination - known policy hawk
• Congressional hearings timing TBA (market-moving event)
• Rate cut probabilities declining (only 16% for March)
• May 2026 transition from Powell to Warsh creates uncertainty

4. Geopolitical Tensions

• US-China trade - technology restrictions ongoing
• Korea-China relations - EV competition intensifying
• Middle East volatility - oil price risk
• Currency wars - competitive devaluations possible

5. Market Breadth Deterioration Risk

• VIX above 20 - elevated volatility persisting
• Sector leadership - rotation could reverse quickly
• Small cap weakness - Russell 2000 lagging despite week’s gain
• Credit markets - watch for spread widening

✅ OPPORTUNITIES

1. Korean Semiconductor Value Play

Thesis: -5% to -7.5% weekly declines appear overdone given strong AI chip fundamentals

Tactical Approach:

• Dollar-cost average into Samsung, SK Hynix on further weakness
• Target entry near 52-week lows or key support levels
• Wait for stabilization signals (volume decline, positive divergence)

Risk Management:

• Position size conservatively (5-10% of portfolio max)
• Set stop-losses below key technical support
• Monitor global semiconductor demand indicators

2. Apple Defensive Positioning

Thesis: AAPL +2.59% while peers fell demonstrates safe-haven qualities in tech selloff

Strategic Role:

• Core holding for tech exposure with lower volatility
• Dividend income (ex-dividend Feb 9)
• Product cycle strength provides earnings visibility

Entry Strategy:

• Current levels attractive ($275-$280 range)
• Add on any dips to $265-$270 support
• Long-term hold (3-5 year horizon)

3. Sector Rotation Beneficiaries

Thesis: Money flowing from mega-cap tech into value, industrials, small-caps

Target Sectors:

• Financials: Higher yields support banks, asset managers
• Industrials: Dow strength signals confidence (infrastructure spending)
• Energy/Materials: YTD leaders (+10% each), commodity strength
• International: EEM +8% YTD outpacing US

Implementation:

• Diversify beyond Mag 7 concentration
• Use sector ETFs for broad exposure
• Focus on quality names with reasonable valuations

4. Fixed Income Attractive Yields

Thesis: 10-year Treasury at 4.2%, stable despite equity volatility

Opportunity:

• Lock in 4%+ yields on high-quality bonds
• Portfolio ballast during equity choppiness
• Inflation-adjusted real yields positive

Strategy:

• 20-30% bond allocation for conservative investors
• Ladder maturities (2-year, 5-year, 10-year)
• Consider TIPS for inflation protection

5. Volatility = Buying Opportunity

Thesis: VIX spikes historically mark near-term bottoms (if fundamentals intact)

Tactical Approach:

• Prepare cash reserves (10-15%) for deployment
• Create watchlist of quality names at target prices
• Scale into positions on weakness (dollar-cost average)
• Avoid trying to time exact bottom

Target Entries:

• NVDA: $165-$170 range
• MSFT: $380-$390 range
• Korean stocks: 10-15% below current levels

📅 WEEK AHEAD PREVIEW (Feb 10-14, 2026)

Economic Calendar

Key Data Releases:

• Monday, Feb 9: Apple ex-dividend date
• Wednesday, Feb 11: US CPI inflation report (January)
• Thursday, Feb 12: PPI inflation, jobless claims
• Friday, Feb 13: Retail sales, consumer sentiment

International:

• Korean trade balance data (semiconductor export trends)
• China manufacturing PMI (regional demand indicator)
• European Central Bank commentary (potential rate guidance)

Earnings to Watch

This Week:

• Various S&P 500 companies (67% still to report)
• Focus on forward guidance and margin commentary
• AI spending discussions will be scrutinized

Upcoming Critical Reports:

• Feb 19: Microsoft ex-dividend date
• Feb 25: NVIDIA earnings (most important event of month)

Catalysts & Events

Bullish Catalysts:

1. Inflation data coming in cooler than expected
2. Retail sales strength supporting consumer health narrative
3. Tech stabilization - Mag 7 finding support levels
4. Korean market bounce - Oversold conditions reversing

Bearish Catalysts:

1. Fed hawkishness - Warsh hearings reveal tight policy bias
2. Earnings disappointments - Margin pressure from AI spending
3. Technical breakdowns - KOSPI 5,000, S&P 6,800 support breaks
4. Geopolitical shocks - Trade tensions escalating

Technical Levels to Watch

US Markets:

• S&P 500: Support 6,800 | Resistance 6,950
• Nasdaq: Support 22,700 | Resistance 23,200
• Dow: Support 49,500 | Resistance 50,000 (psychological)

Korean Markets:

• KOSPI: Critical support 5,000 | Resistance 5,300
• Samsung: Support ₩155,000 | Resistance ₩165,000
• SK Hynix: Support ₩820,000 | Resistance ₩870,000

Magnificent 7:

• AAPL: Support $270 | Resistance $285
• MSFT: Support $385 | Resistance $410
• NVDA: Support $165 | Resistance $180

🎯 STRATEGIC RECOMMENDATIONS

For Conservative Investors

Positioning:

1. Raise cash to 15-20% - create dry powder for opportunities
2. Overweight quality defensives - AAPL, dividend aristocrats, consumer staples
3. Bond allocation 25-30% - lock in 4%+ yields while available
4. Reduce Mag 7 concentration - trim winners (NVDA) that rallied strongly

Risk Management:

• Avoid leveraged positions
• Use stop-losses on volatile names
• Rebalance quarterly to maintain target allocations
• Focus on capital preservation over aggressive growth

For Growth Investors

Positioning:

1. Hold quality Mag 7 names - AAPL, NVDA, META (don’t panic-sell)
2. Scale into weakness - dollar-cost average on 5-10% pullbacks
3. Diversify beyond tech - add industrials, financials exposure
4. Korean semiconductor opportunity - tactical 5-10% allocation

Tactical Approach:

• Use VIX spikes (above 25) as buying signals
• Set price targets for scale-in buys (e.g., NVDA $165)
• Maintain 10% cash for opportunistic deployment
• Avoid chasing rallies - patience rewarded

For Korean Market Investors

Positioning:

1. Samsung, SK Hynix oversold - begin accumulation on further weakness
2. Hyundai tactical trade - wait for automotive sector stabilization
3. Diversify within Korea - consider financials, consumer staples
4. Currency hedge evaluation - won stability vs USD appreciated

Entry Strategy:

• Target Samsung below ₩155,000 for scaling in
• SK Hynix attractive near ₩820,000 support
• Wait for volume decline (capitulation signal)
• Monitor foreign investor flows (reversal = positive)

💡 BOTTOM LINE

What This Week Taught Us

The Good: ✅ Market breadth improving (rotation away from Mag 7 concentration)
✅ Broad indices resilient (+0.6-1.0% despite tech weakness)
✅ Quality differentiation working (AAPL +2.6% while peers fell)
✅ Corrections healthy for long-term bull market sustainability

The Bad: ⚠️ AI spending concerns creating near-term uncertainty
⚠️ Korean market volatility extreme (-5% to -7.5% weekly losses)
⚠️ VIX above 20 signals elevated risk for weeks ahead
⚠️ Sector rotation could reverse quickly (increased uncertainty)

The Opportunity: 💡 Korean semiconductors oversold relative to fundamentals
💡 Volatility creating entry points in quality names
💡 Sector rotation beneficiaries (value, industrials) have room to run
💡 4%+ bond yields attractive for income/ballast

Investment Action Plan

Immediate (Next 1-2 Weeks):

1. Evaluate portfolio concentration - reduce if >30% in Mag 7
2. Build cash reserves to 10-15% for deployment
3. Create watchlist with target entry prices
4. Review stop-loss levels on volatile positions

Near-Term (Next 1-3 Months):

1. Scale into Korean semiconductors if weakness continues
2. Add sector rotation plays (financials, industrials)
3. Hold Apple for defensive quality exposure
4. Monitor NVIDIA earnings Feb 25 for AI narrative direction

Long-Term (3-12 Months):

1. AI secular growth story intact despite volatility
2. Semiconductor demand robust (data centers, AI infrastructure)
3. Korean stocks attractive at valuation discount
4. Diversification increasingly important as market matures

Key Question: Correction or Something Worse?

Our View: This is a healthy correction within an ongoing bull market.

Evidence Supporting Bull Case:

• Economic fundamentals strong (earnings +11%, AI demand robust)
• Broad market breadth improving (rotation = maturation, not panic)
• Valuation reset creating better entry points
• VIX spike likely marks near-term bottom (if history repeats)

What Would Change Our View:

• KOSPI breaking 5,000 support decisively
• S&P 500 breaking below 6,800 on high volume
• Fed turning unexpectedly hawkish (Warsh hearings)
• Earnings season showing widespread margin compression

📞 DISCLAIMER

This report is for informational purposes only and does not constitute investment advice. Market conditions can change rapidly. Past performance does not guarantee future results. Investors should conduct their own due diligence and consult with qualified financial advisors before making investment decisions.

Report Generated: February 7, 2026, 1:00 PM EST
Data Sources: Naver Finance, Yahoo Finance, Alpha Vantage, Reuters, XE Currency
Coverage Period: February 3-7, 2026 (Monday-Friday)
Next Weekly Review: February 14, 2026 (Saturday)

For questions, detailed analysis, or custom reports, please contact:
Email: seandaddy@gmail.com

Report prepared by OpenClaw Market Intelligence
Empowering investors with data-driven insights