This week was a lot of tough love for the technology sector. Will gains continue to be made elsewhere?
Monday S&P 500 0.47% | NASDAQ 0.90%
Momentum built to start the week after Friday’s positive earnings beat in smaller technology stocks. The Dow Jones closed at a record high continuing a value trend as of late. The 10-year treasury, which impacts loan rates, fell slightly on the day.
Tuesday S&P 500 0.33% | NASDAQ 0.59%
The cyclical trade gained steam as energy and materials led the way while communications and consumer discretionary stocks fell lower. For now, the flows have moved into other sectors with proven track records on capital investment. Retail sales came in weaker than expected in December.
Wednesday S&P 500 0.00% | NASDAQ 0.16%
Markets took a breather mid-week as attention looks to CPI (inflation) data on Friday. Earnings continued to roll in, and a better-than-expected jobs report helped buoy markets. The unemployment rate (Jan) edged lower to 4.3%
Thursday S&P 500 1.57% | NASDAQ 2.03%
Equity markets couldn’t hold in tech as the heavily weighted Nasdaq was dealt a blow. There have been increased jitters around Artificial Intelligence (AI) spending, in particular, software companies. Jobless claims also increased as layoffs will be closely observed into the 2nd quarter.
Friday S&P 500 0.05% | NASDAQ 0.22%
Consumer Price Index (CPI) showed a year-over-year slowing to begin 2026. The news kept additional selling at bay while the economy looks for strong employment numbers and measured spending. This week has revived calls for the sought-after “soft-landing” scenario which would be sub 2% inflation and stable labor market.
Conclusion S&P 500 1.39% | NASDAQ 2.10%
February has not shown equity markets very much love so far. The S&P500 lost its YTD gains this week, and tech-heavy indexes have fallen almost 3% over the same period. In positive news, the 30 year-mortgage rates have fallen approximately .75% since this time last year. Cyclical industries that rely on construction and infrastructure could stand to benefit. These trends are not representative of predicted patterns. As mentioned earlier, these industries can be the economic workhorse but do fluctuate and are not immune to the downside. As the technology landscape continues to change, other industries could make their case as undervalued companies report strong earnings. With that said, for this week, AI companies received very little love going into Valentines Day.
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