Markets Finish the Week Strong
February 9, 2026
I hope everyone enjoyed the Super Bowl after last week’s spike in market volatility, driven largely by artificial intelligence (AI) and software-related headlines.1 The S&P 500 Index slipped into negative territory by Thursday; however, Friday’s rally put the equity market back in the green year-to-date.2 Interest rates also moved sharply, with the 10-year Treasury approaching 4.3% early in the week before ending lower at 4.21%.3 The equity selloff was triggered by technology, particularly software, as companies announced over $650 billion in capital expenditure for the year, exceeding both last year’s levels and market expectations.4 The snap election in Japan shows strong support for Prime Minister Takaichi and her potential bold spending plans, which could weigh on the yen and interest rates globally.
Additional signs of U.S. labor market weakness emerged, with Challenger, Gray & Christmas job cuts at 108,435, the highest January since the Global Financial Crisis.5 The official January payroll data, originally scheduled for Friday, was delayed until Wednesday of this week.6 On a positive note, key manufacturing data improved, with the Institute for Supply Management (ISM) Manufacturing Index returning to expansionary levels and supporting the view that the growth narrative is underway in 2026.7 Solid corporate profit growth continues in the U.S. as the S&P 500 Index is now reporting double-digit earnings growth for the fifth consecutive quarter.8 The solid earnings growth should help employment from deteriorating materially.
In the week ahead, the major macroeconomic releases include December retail sales on Tuesday, the delayed January jobs report on Wednesday and the January Consumer Price Index (CPI) report on Friday.9 Expectations are for an increase in jobs by 69,000, up from December’s 50,000, while the unemployment rate is forecast to remain steady at 4.4%.10 Core CPI is expected to rise 0.3% month over month, up sequentially from December and still elevated compared to the Federal Reserve’s annual inflation target of 2%.11 Earnings season is still underway, and we will continue to monitor key economic datapoints.
Sources:
1-3,6,7,9-11Bloomberg
4CNBC – Amazon leads Big Tech’s $1 trillion wipeout as AI bubble fears ignite sell-off; 2/6/26
5CNBC – Dow tumbles nearly 600 points, S&P 500 goes negative for 2026 in tech sector rout: Live updates; 2/5/26
8FactSet – S&P 500 Earnings Season Update; 2/6/26
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