Good Afternoon. AI anxiety just made the jump from stock charts to the debt market. Distressed software loans are piling up, and chip investors didn’t get much comfort from AMD’s post-earnings faceplant. The good news? Your chips for this weekend just got a bit cheaper.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. AI Anxiety Hits Tech Again

The News: U.S. tech stocks slid on Feb. 4, 2026, with the Nasdaq down about 1% in afternoon trading as chip shares and “AI-disruption” fears weighed on the sector. AMD fell about 16% after earnings, its sharpest drop in years, as investors reacted to guidance that didn’t clear sky-high expectations for the AI chip cycle. The selling spread to other semis and AI-adjacent names (including Broadcom and Micron, down 4%+), while the Dow held up better thanks to strength in defensives. Volatility also lingered in metals after last week’s crash, with gold and silver swinging sharply intraday.

Why It Matters: These swings matter mostly through portfolios and sentiment—big tech drawdowns can tighten financial conditions and cool the “wealth effect,” especially for retirement accounts heavy in growth stocks. For investors, the message is clearer: AI is no longer a one-way “buy everything labeled AI” trade. Markets are splitting the world into (1) companies that sell the picks and shovels and can defend margins, and (2) companies whose products could be partially automated away or whose AI upside is already priced in. When expectations are stretched, “good” results can still trade like “not good enough.”

What to Watch: Near term, focus on chip and mega-cap guidance over the next week—if more companies hint at slower AI capex or tougher pricing, the market will keep repricing. Also watch whether gold and silver calm down; when “safe havens” are volatile, risk assets tend to stay jumpy too.
Source: wsj.com

2. “SaaSpocalypse” Spills Into Credit: $17.7B of Software Loans Turn Distressed

The News: A fast selloff in software-company debt has pushed more than $17.7 billion of U.S. tech loans into distressed trading levels over the past four weeks, lifting the total distressed tech-debt pile to about $46.9 billion, according to Bloomberg. Distressed software loans in the U.S. more than doubled in January 2026 to a record $25 billion, as investors fretted that agentic AI tools could erode demand for traditional SaaS products.

Why It Matters: This is the AI disruption story moving from stock multiples to the plumbing of corporate finance. Widespread software stress can translate into quieter but real effects: layoffs, reduced product support, and consolidation in the tools businesses rely on (HR, learning, healthcare billing, call centers). For investors, credit is flashing a warning that the “recurring revenue” model doesn’t immunize companies from a demand shock—especially when leverage is involved. And because software is about 13% of the leveraged-loan market (per reporting), a sustained repricing can bleed into private credit funds, BDCs, and broader risk appetite if downgrades and restructurings pick up.

What to Watch: Watch for a wave of liability-management moves—buybacks, exchanges, maturity extensions—as lenders and sponsors try to avoid outright defaults. Also watch whether this stays “software-specific” or starts to pressure the wider leveraged-loan market; the difference will show up in new-issue pricing, hung deals, and how quickly distressed lists expand.
Source: bloomberg.com

3. Lay’s and Doritos Get a Price Cut Before the Big Game

The News: PepsiCo said on Feb. 3, 2026 it will lower suggested retail prices on big snack brands including Lay’s, Doritos, Cheetos, and Tostitos by up to ~15%, with new pricing rolling out this week ahead of Super Bowl LX on Feb. 8, 2026. The move follows a stretch of higher list prices that helped revenue but pressured demand: PepsiCo has flagged softness in North American volumes, and management has said affordability is keeping lower- and middle-income shoppers from buying more. PepsiCo noted retailers set final shelf prices, so actual discounts may vary by store.

Why It Matters: This is consumer pushback showing up in a very specific place: the snack aisle. For households, a price cut on “weekend staples” is a small but real relief—especially if it sticks beyond Super Bowl promos and doesn’t come with smaller bags/shrinkflation. It’s also a signal that pricing power is getting capped: when volumes soften, CPG giants either defend margin (and risk more store-brand trade-down) or cut price to protect share. PepsiCo choosing price says the volume pain is starting to matter more than the revenue optics.

What to Watch: If this drives a measurable volume rebound in the next quarter and whether rivals follow with their own targeted cuts or “more value” pack sizes. Also watch how PepsiCo funds the move. Cheap chips are fun; cheap execution is harder.
Source: pepsico.com

4. Private Credit Meets a Stress Test

The News: Private-credit funds saw a wave of withdrawal requests in late 2025, with investors seeking to pull $7B+ from several large vehicles, a reversal after years of steady inflows, the Financial Times reported. Layer on a new anxiety: UBS warned that in a worst-case “aggressive” AI-disruption scenario, U.S. private-credit default rates could rise as high as 13%, a tail-risk outcome that’s reigniting questions about credit quality and “semi-liquid” fund structures sold to wealth clients.

Why It Matters: This matters because private credit has become a major lender to the middle market—if defaults rise or funding tightens, it can mean less hiring, fewer expansions, and more restructurings at everyday employers. For investors, the core issue is liquidity math: many products offer periodic redemptions while holding loans that can’t be sold quickly without big price cuts, so a rush for the exits can force funds to gate withdrawals, sell the best assets first, or mark down NAVs. AI adds a twist: it’s not just recession risk anymore—certain software and services borrowers may face a genuine revenue-model hit, and private credit is heavily exposed to those sectors.

What to Watch: Watch redemption data into Q1 2026—especially whether requests keep clustering around typical ~5% quarterly limits and whether managers loosen terms to meet demand (or tighten them to protect portfolios). Software-heavy portfolios are already showing strain in public markets, and private marks tend to move slower until they don’t.
Source: ft.com

5. Medicare Gets a Green Light for “One Blood Test, Many Cancers”

The News: President Trump signed the MCED Screening Coverage Act into law on Feb. 3, 2026, creating a formal Medicare coverage pathway for multi-cancer blood tests once they win FDA approval and CMS deems coverage appropriate. Under the framework, Medicare coverage and payment would begin in 2028, with age limits and screenings limited to one test every 11 months (effectively annual).

Why It Matters: For seniors, this is a big access unlock if the tests prove clinical benefit: coverage is often the difference between “promising tech” and “widely used healthcare.” Earlier detection can mean earlier, less intensive treatment and better outcomes, but it also raises practical questions about false positives, follow-up scans, and who pays for downstream diagnostics. The catch: coverage is gated by FDA approval and CMS decisions, and timelines still stretch into the next administration cycle.

What to Watch: Watch for the first FDA approvals in MCED and what CMS defines as “clinical benefit” for coverage decisions—those details will determine who wins and how fast adoption ramps. In medicine, the breakthrough is just the beginning.
Source: congress.gov

1. Google Goes Bigger in India

The News: Alphabet is planning a major expansion in India, leasing one office tower and securing options on two more in Bengaluru’s Whitefield corridor—a potential 2.4 million square feet of space that could house up to 20,000 additional employees, according to Reuters citing Bloomberg reporting. Alphabet currently has about 14,000 employees in India out of roughly 190,000 globally, so fully utilizing the new campus would more than double its India footprint. The timing lines up with tougher U.S. immigration costs: the Trump administration’s $100,000 fee on new H-1B visa petitions took effect Sept. 21, 2025 and is now being challenged in court.

Why It Matters: This is the way policy can show up in products: if U.S. hiring becomes more expensive and uncertain, more engineering and AI work shifts to where talent can be hired faster and shipped back digitally. For investors, it’s a signal that “global capability centers” are no longer back-office labor arbitrage; they’re becoming core product and AI build hubs. India gets more high-skill jobs and leverage in the global tech stack.

What to Watch: Watch the H-1B fee lawsuits—the D.C. Circuit agreed to expedite the appeal in January 2026, and companies have warned the outcome could affect participation in the next visa registration cycle. Also watch whether other top H-1B sponsors follow Google’s lead with bigger non-U.S. build centers, especially as India keeps attracting higher-value AI and engineering work. When the talent pipeline gets taxed, the org chart gets redrawn.
Source: reuters.com

2. Chinese Solar Pops on “Musk Visit” Buzz

The News: Chinese solar stocks jumped on Feb. 4, 2026 after local media reported that a delegation linked to Elon Musk visited major photovoltaic firms, including JinkoSolar, days after Musk talked up building 100 gigawatts of annual solar-cell capacity in the U.S. The CSI All Share Solar Power Equipment Sub-Industry Index rose about 3.6% and the CSI SH-HK-SZ Solar Power 50 Index about 3.2% in Wednesday trading, while JinkoSolar shares surged as much as 20% after confirmations of a visit surfaced.

Why It Matters: This rally is about optionality: if Tesla (or Musk-linked teams) wants to scale solar manufacturing fast, China’s supply chain is still the world’s deepest bench. Any credible push toward larger, cheaper solar supply helps long-run electricity costs (and the power-hungry AI buildout), but the near-term takeaway is more market-y: solar equities can move hard on “strategic partnership” speculation even when the underlying economics (tariffs, domestic sourcing rules, margin pressure) haven’t changed.

What to Watch: Watch for proof beyond site visits—named counterparties, joint development announcements, offtake agreements, or capex commitments tied to Musk’s 100 GW/year ambition. Also watch the U.S. policy backdrop (tariffs and clean-energy sourcing rules): if the plan is “build in America,” the path likely still runs through Chinese tooling, know-how, or partnerships—officially or quietly.
Source: reuters.com

3. Europe Hits a Record

The News: European shares notched another record on Feb. 4, 2026, with the STOXX Europe 600 closing at an all-time high of 618.12 (up 0.03%) as gains in energy, telecoms, and consumer stocks offset a sharp healthcare selloff. The drama was Novo Nordisk: the Danish drugmaker fell about 17% after warning that 2026 sales and operating profit could decline 5% to 13%, versus analyst expectations for a much smaller drop. Reuters estimated the move wiped roughly $50 billion off Novo’s market value and helped drag Denmark’s market sharply lower.

Why It Matters: This is a reminder that the GLP-1 boom is not immune to politics and patents: Novo blamed U.S. pricing pressure and looming international semaglutide patent expirations, which can eventually reshape what insurers cover and what patients pay. For investors, it’s a two-part story: (1) Europe’s benchmark keeps grinding higher because money is rotating into other sectors, and (2) “single-stock Europe” is still a thing—when one mega-name stumbles, it can punch a hole in an entire country’s index.

What to Watch: Watch for follow-through on Novo’s pricing strategy—management flagged “unprecedented” pressure, and any additional detail on rebates, patient mix, and the new oral Wegovy pill rollout could change how quickly investors see a rebound.
Source: money.usnews.com

Q: What’s blue and not heavy?

A: Light blue.

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