Weekly Market Review - 02-02-2026

Feb 2
5 min read

Global markets delivered a mixed performance over the past week as investors weighed easing inflation expectations against ongoing policy uncertainty and shifting geopolitical dynamics. UK equities edged higher, supported by resilient large-cap stocks, while US markets moved lower amid a more cautious risk tone. Elsewhere, falling inflation forecasts, currency movements and key central-bank decisions remained firmly in focus as markets looked ahead to a busy week of economic data and policy signals.

Market Recap.

UK equities moved higher over the week, with the FTSE 100 ETF rising 0.81%, supported by relative resilience in large-cap stocks despite a mixed global backdrop.

US equity markets finished the period lower. The Dow Jones Industrial Average ETF declined 1.39%, while the S&P 500 ETF slipped 0.37%. Technology stocks also came under pressure, with the Nasdaq 100 ETF falling 0.46% over the week, reflecting a more cautious risk tone among investors.

News.

UK motorists received a boost this week after the government launched its new Fuel Finder Scheme, allowing drivers to compare petrol and diesel prices across all fuel stations nationwide. Under the scheme, fuel retailers are now required to report price changes to third-party apps and websites within 30 minutes, improving transparency and competition across the sector.

The government estimates the initiative could save the average household around £40 a year, with motoring groups highlighting that pump prices can vary by as much as 20p per litre depending on location. Petrol prices are currently averaging 131.9p per litre, the lowest level since July 2021, while diesel stands at 140.9p, according to the RAC. The move follows Competition and Markets Authority findings that competition between forecourts has remained weak, with the scheme designed to help consumers shop around more easily and encourage sharper pricing.

Inflation.

Inflation remained in focus this week after the International Monetary Fund signalled a further easing in global price pressures. IMF Managing Director Kristalina Georgieva said global inflation is expected to fall to 3.8% in 2026, before easing to 3.4% in 2027, reflecting the impact of tighter monetary policy and improving supply conditions.

However, the IMF warned that progress remains uneven, with services inflation and wage pressures proving more persistent in several advanced economies. Geopolitical tensions, trade restrictions and potential supply-chain disruptions were highlighted as ongoing risks, reinforcing expectations that central banks will continue to approach interest-rate cuts cautiously.

Central Banks.

The European Central Bank remained in focus this week as renewed strength in the euro added complexity to the policy outlook. Analysts noted that a stronger currency could act as a de facto tightening, helping to ease imported inflation pressures while weighing on growth and export competitiveness. As a result, expectations for further ECB rate hikes have continued to fade.

ING described the current environment as “the first real global euro moment,” reflecting increased confidence in the single currency amid shifting global capital flows. However, policymakers are expected to remain cautious, with the ECB unlikely to respond directly to exchange-rate moves unless they materially affect the inflation outlook.

Commodities.

Commodity markets delivered a mixed and volatile performance this week as precious metals surrendered recent gains and energy prices weakened amid easing geopolitical risk. Precious metals, which had been trading at elevated levels, faced sharp corrections late in the week. Gold prices retreated from their recent highs and were trading around approximately $4,700 per ounce, while silver hovered near $80–84 per ounce, both reflecting significant volatility and profit-taking after record runs earlier in January. The sell-off has been driven by a combination of margin tightening, leveraged position unwinding, and shifts in market expectations following changes in U.S. monetary policy outlooks.

In contrast, energy markets remained under pressure. Brent crude and WTI both softened, with crude oil trading around $63–$65 per barrel, weighed down by supply dynamics and a reduced risk premium as tensions eased in key geopolitical hotspots.

ESG.

Global efforts to standardise climate reporting gained momentum this week after the International Public Sector Accounting Standards Board (IPSASB) finalised new climate-related disclosure requirements for governments. The new framework is designed to improve transparency around climate risks, emissions exposure and long-term sustainability commitments across the public sector, aligning government reporting more closely with private-sector climate standards.

The IPSASB said the rules aim to strengthen accountability and comparability in public-sector climate disclosures, helping investors and stakeholders better assess how governments are managing climate-related financial risks. The move marks a significant step towards more consistent global climate reporting and underscores the growing regulatory focus on embedding climate considerations into public finance frameworks.

Geopolitics.

Geopolitical developments in the Middle East took a more positive turn this week after Israel reopened the Rafah border crossing between Gaza and Egypt for the movement of people. The reopening marks a limited but meaningful easing of restrictions that have been in place since mid-2024 and follows progress linked to the US-backed ceasefire framework.

While movement through the crossing remains tightly controlled and limited to humanitarian cases, the presence of European Union monitors and coordination with regional partners has been viewed as a stabilising step. The move has been welcomed as a humanitarian lifeline and signals tentative progress toward improved conditions, even as broader geopolitical risks in the region persist.

Week Ahead.

United States: In the United States, attention will focus on a busy run of economic activity and labour-market data. The week begins with the ISM manufacturing index on Monday, 2 February, offering an updated read on factory-sector momentum. This is followed by factory orders on Tuesday, 3 February, providing further insight into business demand. Services-sector conditions come into focus with the ISM services index on Wednesday, 4 February. The week concludes with the key January non-farm payrolls report on Friday, 6 February, alongside the unemployment rate and average hourly earnings, which will be closely watched for signals on labour-market tightness and wage pressures.

Eurozone: Across the Eurozone, inflation data will be in focus at the start of the week, with flash consumer price figures due on Monday, 2 February, offering an early indication of price pressures at the beginning of 2026. Later in the week, retail sales data on Wednesday, 4 February will provide insight into consumer demand across the bloc. In the absence of major ECB policy events, markets are expected to remain sensitive to inflation trends and commentary from central bank officials.

United Kingdom: In the UK, the spotlight will fall on the Bank of England’s Monetary Policy Committee decision on Thursday, 5 February. Markets will be focused on the policy vote, updated guidance and any changes in tone from policymakers following recent inflation data. Outside of the MPC meeting, the domestic data calendar is relatively light, leaving interest-rate expectations and global developments as the primary drivers of UK market sentiment over the week.