Market Commentary

For the week ending 2/13/2026

 

Volatility and rotation that ultimately led to a late-week broad selloff in major U.S. equity indexes characterized last week’s market activity.

While Wall Street began the week with record-breaking highs for the Dow Jones Industrial Average, it eventually lagged on persistent anxieties regarding the potential disruptions from artificial intelligence (AI), as well as the trajectory of inflation.

Investors noted ongoing signs of a “broadening” market as leadership began rotating away from some of the dominant tech giants and toward other more cyclical or value-oriented sectors. Small-cap stocks, represented by the Russell 2000, showed intermittent strength earlier in the week, as some investors sought non-tech-related investments.

After a strong start to the week where the Dow Jones touched a new record high, market sentiment shifted sharply on Thursday. Investors grew increasingly concerned over AI’s potential to disrupt a variety of other industries including: software, financial services, commercial real estate, and trucking/logistics sectors. Broadly speaking most stocks were lower this week, with growth and technology stocks underperforming. All of the major U.S. indices trended downward toward the end of the week.

Broader economic data remained mixed, but relatively supportive. Headline retail sales for December were flat month-over-month, missing expectations for a 0.4% increase. The slightly delayed, and eagerly awaited January employment report showed 130,000 jobs added in the month, nearly double the expected 70,000 jobs, while the unemployment rate ticked slightly lower from 4.4% to 4.3%. Weekly initial jobless claims were in-line with consensus. Continuing jobless claims ticked higher this week, but the four-week moving average is at its lowest level since October 2024. Lastly, January existing homes sales disappointed, falling 8.4% month-over-month, reflecting a lack of inventory for sale and higher prices, both representing challenges for potential buyers.

Market participants spent the latter half of the week in a “wait-and-see” mode ahead of the January Consumer Price Index (CPI) report, which was released early Friday morning. January annualized headline CPI rose 2.4%, a bit cooler than consensus 2.5%. Annualized core CPI increased at 2.5%, in-line with consensus expectations.

For the week, the S&P lost -1.4% to 6,836, the Nasdaq fell -2.1% to 22,547 and the Dow closed down 1.2% at 49,501.

Oil dipped -1% to $62.89/bbl., gold rose 1.3% to $5,046/oz. and the yield on the 10-year Treasury slid to 4.06%.

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