Recap | 2 February 2026
- Feb 3
- 7 min read
US and Iran to meet amid tensions as diplomacy eyed in Istanbul
President Trump announces trade understanding with India in bid to pressure Russia
US creates strategic rare earths reserve
President Trump names Kevin Warsh to lead Federal Reserve
Metals' historic pullback met with dollar strength, risk asset calm
Manufacturing PMI rebound belies underlying uncertainty
Reserve Bank of Australia hikes rates on inflation concerns
Postponed Russia-Ukraine talks back on in Abu Dhabi
Rafah reopens to trickle of crossings in Gaza
US threatens Cuba with oil embargo
Syria ceasefire with SDF holds
House takes up Senate compromise on spending to avert longer shutdown
SpaceX and xAI plan to merge, consolidate space-based AI vision
EDWARD VON DER SCHMIDT
Headlines
US and Iran to meet amid tensions as diplomacy eyed in Istanbul
Turkey offered to host delegations from the US, Iran, and regional counterparts later this week. The Istanbul talks will seek to head off wider conflict as the US has increased its military presence alongside exchanges of antagonistic rhetoric.
President Trump has tied US action to the fate of Iranian detainees and the status of nuclear enrichment negotiations. Iran has warned of the repercussions that would follow US use of force.
Middle East neighbors have called for calm in their efforts to head off regional instability.
Sources:
Iran's supreme leader warns any US attack would spark 'regional war' (AP; 2/1)
Turkey seeks to broker US-Iran talks by week's end (AP)
Exclusive: Iran fears US strike may reignite protests, imperil rule, sources say (Reuters)
Iran, US to hold nuclear talks on Friday as Trump warns Tehran (Reuters)
Before Any Strike on Iran, U.S. Needs to Bolster Air Defenses in Mideast (WSJ; 2/1)
U.S., Iran Poised to Meet for Talks (WSJ)
President Trump announces trade understanding with India in bid to pressure Russia
After a call between President Trump and Prime Minister Modi, the president announced that the US had agreed to reduce tariffs on Indian exports and lift secondary levies.
In exchange, India will reportedly ease trade barriers and cease its purchases of Russian oil. Details of the agreement were lacking.
President Trump asserted that halting purchases of Russian oil would apply pressure to reach a ceasefire accord with Ukraine with another round of negotiations ahead.
Sources:
Trump plans to lower tariffs on Indian goods to 18% after India agreed to stop buying Russian oil (AP)
US to cut tariffs on India to 18%, India agrees to end Russian oil purchases (Reuters)
Trump Cuts India Tariffs in Deal He Links to Russian Oil (Bloomberg)
U.S. Will Cut Tariffs on India to 18% in Trade Deal (WSJ)
US creates strategic rare earths reserve
The administration announced the creation of a $12bn rare earths reserve dubbed "Project Vault".
The project aims to minimize supply disruptions of the sort that arose from trade restrictions imposed by China.
Rare earths are a crucial component of magnets used in a variety of industrial capacities.
Sources:
Trump launches $12 billion minerals stockpile to counter China (Reuters)
Japan retrieves rare earth-rich mud from seabed to lower reliance on China (AP)
Trump Unveils $12 Billion Mineral Reserve to Counter China (Bloomberg)
Trump Administration to Create $12 Billion Rare-Earth Stockpile to Counter China (WSJ)
Markets & Economies
President Trump names Kevin Warsh to lead Federal Reserve
On Friday, President Trump announced that he would nominate former Fed Governor Kevin Warsh to succeed Jerome Powell as Chair of the Federal Reserve.
Warsh, who had previously espoused hawkish views related to inflation and Fed asset purchases, has recently advocated for policy rate easing.
Warsh's nomination will struggle to advance given that Senator Tillis intends to block all Fed nominees until the DOJ inquiry into Powell is resolved.
Sources:
Trump's choice of Warsh to lead the Fed could reshape the world's most influential central bank (AP; 1/30)
Trump taps ex-Fed insider Warsh to lead world's top central bank (Reuters; 1/30)
Trump's Fed chair pick Warsh likely to boost Wall St rule easing (Reuters; 1/30)
Trump Picks a Reinvented Warsh to Lead the Federal Reserve (Bloomberg; 1/30)
Warsh Set to Face Early Reality Check as Trump's Man at the Fed (Bloomberg; 1/30)
Trump Picks Kevin Warsh as Fed Chair (WSJ; 1/30)
Metals' historic pullback met with dollar strength, risk asset calm
Friday's historic collapse in gold and silver tapered off to begin the week even as selling pressure persisted in precious metals.
The dollar's advance on Monday was accompanied by oil's retreat and technology-driven gains in US equities.
Sources:
US stocks climb as gold and silver prices keep falling (AP)
S&P 500 flirts with record high; chipmakers and small caps jump (Reuters)
Asian stocks up, gold bouncing back in calmer trade (Reuters)
Stocks Climb on Solid Factory Report as Bonds Fall: Markets Wrap (Bloomberg)
Dollar Extends Advance to Second Day as Metals Drop, Oil Sinks (Bloomberg)
Asian Stocks Rebound on AI Optimism as Metal Prices Recover (Bloomberg)
Stocks Rise While Commodity Markets Face Fresh Volatility (WSJ)
What to Know About the Wild Swings in Gold and Silver (WSJ)
Manufacturing PMI rebound belies underlying uncertainty
The ISM US manufacturing purchasing managers index (PMI) surprised as front-loaded purchases reportedly drove an unanticipated spike in the headline reading.
The unexpected expansion stood in contrast to surveyed concerns regarding policy uncertainty and a weak manufacturing employment backdrop.
Sources:
Reserve Bank of Australia hikes rates on inflation concerns
The RBA cited an uncertain inflationary environment in its decision to hike policy rates 25bp.
Sources:
Around the World
Postponed Russia-Ukraine talks back on in Abu Dhabi
Originally scheduled for this past weekend, UAE-hosted talks between the US, Ukraine, and Russia will pick back up on Wednesday.
Territorial disputes, particularly as they pertain to Donetsk, and the presence of NATO troops as part of proposed security guarantees remain contentious.
Russia has continued to target Ukraine's power infrastructure.
Sources:
Rafah reopens to trickle of crossings in Gaza
Amid heightened security controls, Israel reopened the Rafah crossing between Gaza and Egypt in one of the final elements of the first stage of a US-backed ceasefire.
Sources:
US threatens Cuba with oil embargo
An executive order imposing secondary sanctions on countries exporting oil to Cuba compelled diplomatic outreach and applied pressure to the island's government.
Sources:
Trump says US is 'starting to talk to Cuba' as he moves to cut its oil supplies (AP; 2/1)
Cuban diplomat tells the AP there's no dialogue with US but the island is open to one (AP)
What to expect as Trump and Petro meet at White House after months of tension and insults (AP)
Cuba in communication with US, Cuban diplomat says, as Trump tightens screws (Reuters)
Syria ceasefire with SDF holds
An extended ceasefire between Syrian government forces and Kurdish factions in the north held with US-backing after integration struggles threatened to fracture a tenuous peace.
Sources:
Odds & Ends
House takes up Senate compromise on spending to avert longer shutdown
The House of Representatives took up a vote on a Senate compromise that would pass funding legislation through the end of the fiscal year for all but the Department of Homeland Security.
The DHS budget would be extended for a short-period as both chambers debate restrictions on and oversight of immigration enforcement operations.
Sources:
Senate passes Trump-backed government funding deal, sending to House (AP; 1/30)
Trump urges House to vote quickly to end the partial government shutdown (AP)
Labor Department delays January jobs report because of partial shutdown (AP)
US House takes up deal to restore government funding, Tuesday vote expected (Reuters)
Trump Sways Republicans Threatening Blockade of Shutdown Deal (Bloomberg)
Trump Pushes House Republicans to End Partial Shutdown Quickly (WSJ)
SpaceX and xAI plan to merge, consolidate space-based AI vision
SpaceX and xAI intend to merge in order to capture anticipated synergies of planned space-based data processing.
Sources:
Musk joins his rocket and AI businesses into a single company before an expected IPO this year (AP)
SpaceX acquires xAI in record-setting deal as Musk looks to unify AI and space ambitions (Reuters)
Musk's SpaceX Combines with xAI at $1.25 Trillion Valuation (Bloomberg)
SpaceX, xAI Tie Up, Forming $1.25 Trillion Company (WSJ)
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