Daily market snapshot

Thursday, 2/12/2026 p.m.

• Stocks slide in broad risk-off move - Equity markets opened on the front foot this morning but sold off sharply over the course of the session, with major U.S. small- and large-cap benchmarks finishing the day 1%-2% lower*. This turnaround followed an upbeat mood in global equity markets overnight, with Asian and European stocks continuing their strong performance over 2026 up to now*. Bond markets rallied sharply amid the risk-off sentiment, with yields on the 10-year U.S. Treasury note down eight basis points (0.08%) to 4.10%, the lowest level seen since early December*. The dollar was broadly steady against a trade-weighted basket of currencies over the session, while oil and gold prices both fell around 3% as commodities in general struggled*.
   
• Investors continue to look for AI winners and losers – We are increasingly seeing signs of greater discrimination in markets across the potential winners and losers from the AI revolution*. Micron Technology shares were up almost 4% in premarket trading this morning after comments from its CFO provided bullish signals around memory-chip production, with this sector benefiting from strong demand at present*. Meanwhile, concerns over climbing costs for these memory chips sent Cisco Systems shares 7% lower*. This follows price action in recent weeks, which has seen software companies hit by concerns over disruptions to their business models from AI*. These fears are increasingly spreading outside of the technology sector, with real estate weak today as investors questioned the demand for office space amid greater AI take up in the future*. We think this increased discrimination has the potential to generate some ongoing volatility and may encourage a continued rotation into cheaper sectors at home and abroad in which we are seeing signs of improving earnings growth*.
   
• Initial claims remain low, despite today's upside surprise –Today's initial unemployment insurance claims report was higher than expected, with claims remaining around the 230,000 mark following the previous week's spike*. This helped push the four-week moving average of claims up to 220,000, a three-month high*. However, we don't think this increase is especially concerning. Claims remain low from a historic standpoint, indicating muted labor-market distress*. Meanwhile, yesterday's payrolls report pointed to some improvement in private hiring, which was stronger than expected over January, maintaining the upward trend seen through the end of 2025*. Overall, we think the labor market remains resilient for now, which will likely ease the urgency at the Fed to cut interest rates, especially with inflation still elevated. Economists expect tomorrow's CPI report to deliver a firm 0.3% month-over-month increase in both headline and core CPI inflation, although we think it is possible that some of this strength reflects seasonal price resets at the start of the year*. In our view, the Fed seems most likely to stay on hold until inflation starts to cool in the second half of the year.

James McCann;
Investment Strategy

^{Source: *Bloomberg}

Wednesday, 2/11/2026 p.m.

• Stocks little changed after stronger-than-expected jobs data - Equity markets initially moved higher following a much better‑than‑expected January jobs report, but gains faded by the end of the trading day*. Solid hiring and a drop in unemployment reinforced expectations that economic and earnings momentum can continue*. However, bonds were under some pressure as investors priced in a slower trajectory for Fed rate cuts*. Value-style investments extended their year-to-date outperformance, supported by the solid economic growth prospects*. In contrast, growth investments, particularly software stocks, saw renewed selling on AI disruption concerns. Elsewhere, commodity markets were broadly stronger, with silver, gold and oil each up more than 1%*.
   
• Delayed January jobs report surprises to the upside - While some investors were bracing for a soft reading, the January payrolls report, delayed due to the government shutdown, surprised meaningfully to the upside, signaling improving hiring momentum. The U.S. economy added 130,000 jobs, way more than the 50,000 expected, and the strongest payroll gain in 12 months, with the bulk of it coming from the health care sector, as has been the case over the past year*. Annual revisions removed 862,000 jobs, indicating a sluggish pace of hiring in 2025, but not as weak as feared*. Encouragingly, the rate of unemployment in January ticked down, labor-force participation and hours worked rose, and manufacturing employment increased for the first time since 2024*. We think this release provides ammunition to the Fed hawks to maintain a patient approach to rate cuts, reinforcing the narrative of a stabilizing labor market. Markets have adjusted accordingly, with bond futures now fully pricing in a Fed cut by July instead of June*. From a portfolio standpoint, we expect the 10‑year yield to drift back toward the middle of its 4%–5% range, and we believe the rotation toward “old economy” and pro‑cyclical sectors may continue.
   
• Economy on solid footing - We think the current economic environment is being buoyed by several tailwinds: solid consumer spending from higher‑income households, fiscal support from last year’s tax bill that should lead to larger tax refunds and incentivize business investment, and elevated AI‑related capital spending. Taken together, in our view, these drivers suggest the U.S. economy remains well‑supported, with the potential for above‑trend growth that can help lift revenues across a broader set of sectors. While tech stocks have recently lost some momentum, “old economy” areas such as chemicals, transportation, industrials, and other real‑asset businesses have stepped up*. In our view, the market’s rotational character is creating diversification opportunities and helping ease valuation concerns. Beyond U.S. large‑caps, where many investors may already have significant exposure, we see attractive opportunities in U.S. mid‑caps, international developed small‑ and mid‑cap equities, and emerging markets. Within the U.S., we continue to favor industrials, consumer discretionary, and health care.

Angelo Kourkafas, CFA;
Investment Strategy

^{Source: *Bloomberg}

Tuesday, 2/10/2026 p.m.

• Stocks trade lower following slowdown in consumer spending – U.S. equity markets were mostly lower on Tuesday as investors digested the December retail-sales report, which showed retail-sales growth was flat for the month, compared with expectations for a 0.4% increase.* While equities declined, bonds rallied on the slowing consumer spending report, with the 10-year U.S. Treasury yield falling to 4.14% and the 2-year yield to 3.45%.* Declining yields supported interest-rate-sensitive sectors of the S&P 500, such as real estate and utilities.* Technology and communication services, as well as financials, trailed, with the latter weighed down by brokerage stocks, which were pressured by mounting worries about AI‑related competitive pressures.* Overseas, Asian markets finished higher overnight, while European markets closed mostly lower.*
   
• Consumer spending stalled at the end of 2025 – Headline retail-sales growth was flat in December versus expectations for a monthly gain of 0.4%.* Additionally, control group retail sales (which exclude spending on autos, gas stations, and building materials) fell by 0.1% for the month, compared with expectations for a 0.4% gain.* The slowdown in spending was broad-based, with weakness notable in furniture and home furnishings stores (-0.9%), miscellaneous store retailers (-0.9%), and clothing and clothing accessories stores (-0.7%), while spending on building materials was a bright spot (+1.2%).* Despite a lackluster handoff to 2026, we expect steady consumption growth to support healthy economic momentum this year. In our view, larger refund checks stemming from tax legislation passed in 2025 should provide a modest boost to household spending power. Additionally, a cooling but stable labor market and easing monetary policy could offer further support, with our base-case calling for real GDP growth of roughly 2% in 2026.
   
• Busy week of economic data ahead – Key economic data will likely remain in focus for investors over the remainder of the week, with tomorrow bringing the January employment report and Friday the consumer price index (CPI) inflation release.* On the labor‑market front, economists expect nonfarm payrolls to rise by 75,000 and the unemployment rate to hold steady at 4.4%.* In 2025, job growth slowed to an average monthly gain of 49,000, down from 168,000 in 2024.* Despite the deceleration in hiring, there have been limited signs of increased layoffs, with the unemployment rate holding at 4.4% and initial jobless claims remaining well below their long‑run average.* Turning to inflation, expectations call for both headline and core CPI to rise by 2.5% year‑over‑year, which—if realized—would mark the lowest annual core CPI reading since March 2021.* With inflation continuing to moderate and job growth slowing, we expect the Fed to deliver another one or two interest‑rate cuts in 2026.

Brock Weimer, CFA;
Investment Strategy

^{Source: *FactSet} 

Monday, 2/9/2026 p.m.

• Markets rise ahead of updated jobs, inflation data later this week – Equity markets closed higher on Monday, with rebounding technology stocks leading gains*. Bond yields fell, with the 10-year Treasury yield at 4.20%*. In international markets, Asia finished higher overnight, led by Japan's Nikkei index, which reached a new all-time high*. The strength in Japanese stocks likely reflects reduced political uncertainty after Prime Minister Sanae Takaichi's Liberal Democratic Party secured a supermajority in the country's closely watched elections over the weekend*. In commodities, WTI oil traded higher, as flows of Russian oil to India slow, a key requirement of the recently announced U.S.-India trade deal*.
   
• Job growth expected to rise in January – The January jobs report, due Wednesday, is expected to show payrolls increased by 80,000*. If accurate, that would mark the strongest monthly gain in four months and exceed the 2025 average of roughly 50,000 per month*. Forecasts suggest the unemployment rate will hold steady at 4.4%*. We think the stabilizing labor market — characterized by modest hiring and limited layoffs — should give the Fed some time to assess whether inflation continues to cool. In our view, the central bank likely remains on track to cut rates once or twice this year, assuming price pressures continue to ease. We believe lower interest rates should reduce borrowing costs for consumers and businesses, helping support the economy and corporate profits.
   
• CPI inflation expected to cool to start the year – Headline consumer price index (CPI) inflation for January, due Friday, is expected to dip to 2.5% year-over-year, from 2.7% the prior month*. Inflation has moderated in recent months, aided by easing services inflation*. Partially offsetting that progress, goods inflation has picked up, in part due to tariffs*. We expect tariff-related price pressures to begin fading around midyear. Much of the impact reflects one-time price-level adjustments implemented in mid-2025, meaning we expect the effects should gradually roll out of year-over-year inflation comparisons.

Brian Therien, CFA;
Investment Strategy

^{Source: *FactSet} 

Friday, 2/6/2026 p.m.

• Markets roar back – Stocks rebounded strongly on Friday as dip buyers came out in force *. The S&P 500 index erased declines of as much as 1% in overnight futures trading to climb a full 2% over the session, with this surge bettered by a 2.5% gain in the Dow Jones Index, which hit a new record high above the 50,000 mark, and a 3.5% jump in the small-cap Russell 2000 index*. The swing in sentiment comes at the end of a bumpy week in stocks, particularly for some tech names, on concerns around the potential disruption from AI to software services and the eye-watering spending plans of some of the tech giants*. As risk sentiment improved, we saw bonds sell off, with the yield on the U.S. 10-year Treasury note up two basis points (0.02%) over the day*. The dollar was steady against a trade-weighted basket of currencies, as was WTI oil, as investors continue to monitor geopolitical strains between the U.S. and Iran *. Gold prices and silver prices moved higher but remain well below their 2026 peaks *.
   
• Amazon the latest big spender– Amazon's announcement that it plans to spend $200 billion this year on data centers, chips and other equipment was the latest eye-catching headline around AI investment*. Adding to news from Meta, Alphabet and Microsoft over recent days, this takes the total planned spending on AI-focused investment in 2026 to $650 billion across this group*. This represents a full 60% increase in spending across this group in year-over-year terms as the push to lead the AI revolution intensifies*. The scale of this investment looks to be without recent precedent, and markets are naturally becoming concerned around the size of outlay and the return on this spending*. Amazon acknowledged that capital expenditures would weigh on profitability this year, and its shares fell 10% in extended trading*. While many of the underlying fundamentals around sales growth and profitability among the mega-cap technology companies continue to look positive, the market appears to be becoming more discerning around identifying the winners and losers from this race, especially as the tremendous rates of capital-expenditure spending could make some names more asset-heavy over time, weighing on margins and valuations, in our view.
   
• Market rotation the big story – While tech names are rebounding this morning, the big theme of 2026 so far, in our view, remains a rotation away from some of these more expensive stocks that have led market performance over recent years. This has left the Nasdaq index trading around 1% lower year-to-date, while the Russell 2000 index is now up around 7.5% following today's surge, and while international developed-market equities are up around the 7% mark for the year*. The broadening in domestic market leadership has been supported by solid-looking economic fundamentals, with today's University of Michigan consumer sentiment survey pointing to rising confidence and lower inflation expectations in February*. Meanwhile, earnings growth is broadening across the corporate sector, with 79% of S&P 500 names beating estimates so far this earnings season, with an average upside surprise of 8.2%**. As a result, earnings growth estimates have risen to 11.4%, from 7.2% at the end of the quarter, reflecting growth across eight of the 11 sectors**. This supports our recommendation for a diverse allocation across domestic mid- and large-cap stocks, international equities, and emerging-market equities.

James McCann;
Investment Strategy

^{Source: *Bloomberg **FactSet}