Daily market snapshot

Tuesday, 2/17/2026 p.m.

• Stocks close slightly higher – U.S. equity markets edged out a modest gain on Tuesday, with all three major averages finishing higher, reversing losses at the open.* Leadership was narrowly led with financials and real estate the top performers, each gaining roughly 1%.* The technology and industrials sectors also posted modest gains, while all other sectors of the S&P 500 closed lower.* Bond yields were little changed Tuesday, with the 10-year U.S. Treasury yield closing at 4.06%, while the 2-year yield rose slightly to 3.44%.* After a move lower to begin the year, the U.S. dollar stabilized on Tuesday, rising by 0.2% versus a basket of developed-market currencies.* In commodity markets, oil prices closed down nearly 1%, while precious metals prices were lower as well, with gold off by nearly 3%.*
   
• International equity momentum continues in 2026 – International equities have sustained their strong momentum from 2025, delivering additional gains so far in 2026. The MSCI EAFE Index, which measures the performance of developed international markets, has risen nearly 8% year‑to‑date, supported in large part by strength in Japan, where stocks are higher by more than 13% in U.S. dollar terms.* Emerging‑market equities have also produced solid results in 2026. While U.S. technology stocks have paused after strong prior performance, the same cannot be said for emerging‑market technology. The MSCI Emerging Markets Index has gained 11% year‑to‑date, driven by technology‑heavy regions such as Korea, where stocks are up nearly 34% this year.* A modestly weaker U.S. dollar has provided an additional tailwind to international returns, particularly within developed markets.* In our view, global diversification will remain a key investment theme throughout 2026. Combined with our expectation for a healthy global economic backdrop, we recommend that investors take a diversified approach to overweighting equities relative to bonds. Specifically, we see attractive opportunities in U.S. large‑ and mid‑cap stocks, international developed small‑ and mid‑cap stocks, and emerging‑market equities.
   
• Strong earnings season winds down – Fourth‑quarter earnings season is drawing to a close, with more than 75% of S&P 500 companies having reported so far.* This week, investor attention will likely turn to consumer‑spending trends, with retail giant Walmart scheduled to report on Thursday.* At an index level, results have been solid, with fourth‑quarter S&P 500 earnings on pace to grow 12% year‑over‑year—well above expectations for roughly 7% growth coming into the quarter.* Earnings growth has also been broad‑based: nine of 11 sectors of the S&P 500 are on track to post positive year‑over‑year results, led by the technology, industrials, and communication services sectors.* Despite delivering robust earnings growth, technology and communication services sectors have lagged in 2026, each down more than 3%.* In our view, this reflects the high bar of expectations these companies face along with recent concerns that AI advances could erode market share of existing businesses, particularly in the software space. Conversely, value‑oriented sectors—consumer staples, materials, energy, and industrials—have outperformed this year, with all four sectors up more than 10%.* As part of our opportunistic equity sector guidance, we continue to recommend diversifying across both value‑ and growth‑oriented areas. We remain overweight health care, industrials, and consumer discretionary, offset by underweights to utilities and consumer staples.

Brock Weimer, CFA;
Investment Strategy

^{Source: *FactSet}

There will be no Daily Snapshot on Monday, February 16, 2026, in observance of the Presidents Day holiday.

Friday, 2/13/2026 p.m.

• Stocks little changed to end the week – U.S. equity markets closed near the flatline on Friday following a mostly in-line consumer price index (CPI) report for January, which showed headline CPI rising 2.4% year-over-year while core CPI posted a 2.5% annual gain, the lowest core reading since 2021.* Leadership tilted toward value- and interest-rate sensitive sectors, with utilities and real estate among the top performers, while growth sectors such as technology and communication services lagged.* The Russell 2000 small-cap index also outperformed, gaining roughly 1%.* Bond yields closed lower in response to signs of ongoing disinflation, with the 10-year U.S. Treasury yield declining to 4.05%, its lowest level since last fall.* Overseas, Asian markets closed lower overnight, while European markets traded modestly lower as well.*
   
• Disinflationary trend remains intact – Consumer price index (CPI) inflation for January showed continued easing in price pressures, with headline CPI rising 0.2% for the month and 2.4% year-over-year, while core CPI increased 0.3% in January and 2.5% on an annual basis.* The 2.5% annual gain in core CPI marks the lowest reading since 2021.* Core goods prices were flat for the month, driven by a 1.8% decline in used vehicle prices, while goods prices outside the transportation category saw firmer pressures, with core goods excluding used vehicles rising 0.4%, potentially reflecting pass-through effects from tariff-related costs.* On the services side, shelter prices rose a modest 0.2% for the month, while upward pressure in categories such as transportation services contributed to a 0.4% monthly increase in overall services prices.* With inflation still running above the Fed’s 2% target and this week’s jobs report indicating signs of stabilization, we believe the Fed will remain on hold in the near term. However, if inflation continues to moderate over the back half of the year, we see scope for the Fed to deliver another one to two interest-rate cuts in the second half of 2026.
   
• Leadership rotation underway to start 2026 – After leading U.S. markets higher for most of the past three years, growth sectors such as technology are among the laggards year-to-date.* Within technology, the software industry has been hit particularly hard, with the S&P 500 software and services industry group down roughly 20% in 2026 amid rising concerns that advances in AI could erode market share for established software companies.* While technology has lagged, “old economy” sectors such as materials, industrials, energy, and consumer staples have rallied, each gaining more than 12% year-to-date.* Additionally, while the S&P 500 is roughly flat this year, the Russell Mid-cap Index and Russell 2000 (U.S. small-cap) Index are each up over 5%.* International markets have also shown continued strength, with the MSCI EAFE Index (international developed) up more than 8% and the MSCI Emerging Markets Index up over 11%.* In our view, the long-term growth story behind AI remains intact, and we maintain a favorable outlook for U.S. large-cap stocks. However, we think the recent rotation into international equities and value-oriented sectors underscores the importance of diversification. In addition to U.S. large-caps, we see attractive opportunities in U.S. mid-cap stocks, international small- and mid-cap equities, and emerging-market stocks.

Brock Weimer, CFA;
Investment Strategy

^{Source: *FactSet}

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}