Weekly Wrap

Stocks started the week on a mostly positive note but ended with the major averages posting weekly losses amid persistent pressure on mega-cap and tech names. The S&P 500 (-1.4%) and Nasdaq Composite (-2.1%) lagged, while the DJIA (-1.2%) also retreated. Strength in the broader market saw the S&P 500 Equal Weighted Index (+1.0%) handily outperform the major averages. Smaller-cap indexes also outperformed, with the Russell 2000 (-0.9%) and S&P Mid Cap 400 (-0.7%) showing relative resilience, reflecting broader participation beyond mega-cap leadership.

The week was defined by a familiar tug-of-war: AI disruption fears and software weakness weighed on the information technology sector and other mega-cap tech names, while defensive sectors and smaller cyclical components showed pockets of strength. Mega-cap names like Microsoft, NVIDIA, Apple, and Amazon faced repeated pressure, though select software and chip names rebounded midweek. Conversely, the utilities (+7.1%), real estate (+3.9%), and energy (+1.7%) sectors led sector gains, highlighting a defensive rotation amid uncertainty.

Economic data provided mixed signals for monetary policy. The January jobs report was encouraging, with payrolls rising 130K and moderate wage growth, suggesting continued strength in the labor market. At the same time, January CPI showed cooler-than-expected inflation at 0.2% headline and 0.3% core, signaling some disinflation. Together, these reports largely canceled each other out at the margin, keeping rate-cut expectations for later this year in check.

Overall, the market is navigating a split environment: mega-cap tech remains under pressure, AI concerns persist, but defensive sectors, smaller-cap stocks, and cyclical pockets continue to attract rotation.

• S&P Mid Cap 400: -0.7% wek-to-date
• Russell 2000: -0.9% week-to-date
• DJIA: -1.2% week-to-date
• S&P 500: -1.4% week-to-date
• Nasdaq Composite: -2.1% week-to-date

Monday:

Stocks had a mostly positive start to the week, albeit a somewhat uneventful one. A continuation in Friday's leadership across mega-cap, tech, and high-beta names helped the S&P 500 (+0.5%) and Nasdaq Composite (+0.9%) notch solid gains, while broadening strength throughout the session saw the DJIA (flat) nab fresh record highs after early losses. 

The Russell 2000 (+0.7%) also captured a nice gain, while the S&P Mid Cap 400 (+0.2%) had a more subdued session. 

Early in the session, the information technology sector (+1.6%) was the only S&P 500 sector to hold a gain, which it maintained throughout the course of the day. 

Investors continued to do some bargain hunting across software names that fell under immense pressure, with AppLovin (APP 460.38, +53.66, +13.19%) and Oracle (ORCL 156.61, +13.79, +9.66%) (which was upgraded to Buy from Neutral at DA Davidson with a target price of $180) being among the best-performing S&P 500 names today, while Microsoft (MSFT 413.72, +12.58, +3.13%) also managed a nice gain. The iShares GS Software ETF (IGV) finished 3.2% higher. 

Chipmakers also contributed to the strength, with the PHLX Semiconductor Index (+1.4%) posting a nice gain due to solid showings from the likes of NVIDIA (NVDA 190.04, +4.63, +2.50%) and Broadcom (AVGO 343.94, +11.02, +3.31%). 

Other mega-cap stocks outside of the technology sector were also mostly higher today, helping the Vanguard Mega Cap Growth ETF (+1.0%) close with a nice gain.

Meta Platforms (META 677.37, +15.91, +2.41%) was a standout, while Alphabet (GOOG 324.40, +1.30, +0.40%), which sold seven tranches of debt, including a British pound-denominated 100-year bond, also finished higher, helping the communication services sector (+0.8%) end the day near the top of the leaderboard. 

While the consumer discretionary sector's (-0.3%) mega-caps, Tesla (TSLA 417.20, +6.10, +1.48%) and Amazon (AMZN 208.72, -1.60, -0.76%), finished mixed, Amazon ended the day significantly improved from early session lows following a sharp post-earnings retreat on Friday. 

Other cyclical sectors had mixed showings. The financials sector (-0.6%) lagged amid a tough day for insurance names.  Insurance Information reported that OpenAI has authorized the first AI application from an insurance provider on ChatGPT. Willis Towers Watson (WTW 290.09, -39.95, -12.10%) and Arthur J. Gallagher (AJG 217.74, -23.84, -9.87%) were among the worst-performing S&P 500 components, while the Dow component Travelers (TRV 292.82, -8.68, -2.88%) also finished lower. 

Meanwhile, the materials (+1.4%) and energy (+0.8%) sectors posted solid gains as oil and precious metals prices increased today. 

The defensive consumer staples (-0.9%) and health care (-0.9%) sectors were today's laggards amid a more risk-on tone in the market today. 

Though not components of the health care sector (or S&P 500), Hims & Hers Health (HIMS 19.33, -3.69, -16.03%) plummeted today after Novo Nordisk A/S (NVO 49.37, +1.73, +3.63%) filed a lawsuit over its compounded versions of Wegovy and Ozempic, which coincides with a weekend FDA announcement targeting non-FDA-approved GLP-1 drugs.

Though the session was largely devoid of new catalysts, the stocks still managed to advance in a relatively broad fashion today. Strong performances from some of the market's largest tech components resonated at the index level and provided confidence that Friday's rebound effort was not a one-off event. 

Earnings results will pick up throughout the week, which will likely be a catalyst of price action. 

There was no economic data of note today, adding to the somewhat subdued corporate news flow.  

U.S. Treasuries began the week with slim gains across the curve after a steady bounce off morning lows in longer tenors. The 2-year note yield settled down two basis points to 3.48%, and the 10-year note yield settled down one basis point to 4.20%.

Tuesday:

The S&P 500 (-0.3%), Nasdaq Composite (-0.6%), and DJIA (+0.1%) finished mostly lower today as mega-cap and tech names saw their recent rebound efforts modestly stalled, while early strength in the broader market succumbed to some afternoon selling pressure. 

The DJIA's modest gains were enough to secure record highs for the third consecutive session. 

While sector strength tilted positive for most of the session, it was eroded somewhat in the afternoon, with just five S&P 500 sectors finishing higher.  Losses were relatively modest across the six sectors that finished lower, though weakness in some of the market's weightiest names pressured the major averages. 

The communications services sector (-0.8%) finished with the widest loss as Alphabet (GOOG 318.63, -5.77, -1.78%) and Meta Platforms (META 670.72, -6.65, -0.98%) both finished lower. 

The financials sector (-0.8%) finished similarly as major banking and financial services names lagged today. 

Meanwhile, the consumer staples sector (-0.7%) faced a combination of weakness from this morning's economic data and earnings releases.  Walmart (WMT 126.70, -2.32, -1.80%) and Costco (COST 971.23, -26.36, -2.64%) finally faced some pressure after an exceptional start to the year following a flat December retail sales report (Briefing.com consensus 0.4%). 

Coca-Cola (KO 76.82, -1.16, -1.48%) finished modestly lower after beating EPS estimates but missing on revenues. 

The top-weighted information technology sector (-0.6%) finished at session lows after spending the first half of the session with modest gains. Datadog (DDOG 129.67, +15.66, +13.74%) was an earnings standout, and software names tracked higher for most of the session, but the iShares GS Software ETF (IGV) finished just 0.4% higher after holding a significantly higher gain. 

Microsoft (MSFT 413.27, -0.33, -0.08%) was unable to maintain its early strength, while NVIDIA (NVDA 188.54, -1.50, -0.79%) and Apple (AAPL 273.68, -0.94, -0.34%) added to the day's mega-cap weakness that saw the Vanguard Mega Cap Growth ETF finish 0.4% lower. 

The PHLX Semiconductor Index (-0.7%) finished even lower, pressured by sharp retreats across memory storage names such as Western Digital (WDC 262.56, -23.43, -8.19%) and Sandisk (SNDK 541.64, -41.76, -7.16%). 

While growth stocks largely underwhelmed today, there were a few defensive and cyclical pockets of the market that outperformed. 

The utilities sector (+1.6%) finished with the widest gain as all but one of its components finished higher. Vistra Corp. (VST 159.58, +6.61, +4.32%) led the advance after receiving an upgrade to Buy from Hold from Jefferies. 

Meanwhile, the real estate sector (+1.4%) traded higher as the House passed a bipartisan bill to reduce regulations and increase housing supply. 

The materials sector (+1.3%) also charted a gain wider than 1.0% due to strong performances from chemical stocks. 

Though the consumer discretionary sector (+0.5%) finished with only about half of its earlier strength, it still notched a solid gain due to solid post-earnings performances from Marriott (MAR 359.35, +28.14, +8.50%) and Hasbro (HAS 104.00, +7.24, +7.48%), along with strength in its homebuilder components. 

Amazon (AMZN 206.90, -1.82, -0.87%) traded modestly higher for much of the session but was unable to secure its first higher finish following its earnings report last Thursday afternoon. 

Outside of the S&P 500, the Russell 2000 (-0.3%) and S&P Mid Cap 400 (-0.1%) also ceded their early gains. 

All told, today's session started as a modest extension of the recent rebound effort, and while select pockets of the market finished with nice gains, weakness in mega-cap and tech spaces resulted in a mostly lower finish for the major averages. Action at the index level was still subdued as the market awaited its next catalyst in the form of more earnings and tomorrow's release of the January employment situation report. 

U.S. Treasuries registered gains in the overnight session, comforted by the calm seen in Japan's bond market despite speculation that the LDP's commanding victory in last weekend's snap election could stoke additional fiscal stimulus. Those gains persisted into today's cash session, courtesy mostly of a weak retail sales report for December and the recognition that employment costs moderated in Q4. The 2-year note yield settled down three basis points to 3.45%, and the 10-year note yield settled down five basis points to 4.15%. 

Reviewing today's data:

• January NFIB Small Business Optimism 99.3; Prior 99.5
• December Retail Sales 0.0% (Briefing.com consensus 0.4%); Prior 0.6%, December Retail Sales, ex-auto 0.0% (Briefing.com consensus 0.4%); Prior was revised to 0.4% from 0.5%
  • The key takeaway from the report is that spending on goods was down across most discretionary categories following some decent-sized gains in November. That will foment some concern about consumer spending fatigue at the end of last year, which of course included the holiday shopping period.
• Q4 Employment Cost Index 0.7% (Briefing.com consensus 0.8%); Prior 0.8%
  • The key takeaway from the report is that there was some moderation in employment costs on a year-over-year basis that will help temper inflation worries.
• December Import Prices 0.1%
• December Import Prices ex-oil 0.4%
• December Export Prices 0.3%
• December Export Prices ex-ag. 0.3%
• November Business Inventories 0.1% (Briefing.com consensus 0.2%); Prior was revised to 0.2% from 0.3%

Wednesday:

The S&P 500 (flat), Nasdaq Composite (-0.2%), and DJIA (-0.1%) traded in a tight range near their flatlines for the bulk of the session after some notable swings early on. The modest weakness snaps a three-day streak of record highs for the DJIA. 

Stocks opened to solid gains following this morning's release of the January Employment Situation Report, which showed 130K payrolls added in January (Briefing.com consensus 68K). While the headline figure generated some positive buzz around the U.S. growth outlook, it also tempered the market's expectations for its next rate cut from the Fed. The probability of at least a 25-basis point rate cut at the June 17 FOMC meeting now stands at around 60%, down from just over 75% yesterday, according to the CME FedWatch tool. 

After retreating from the opening highs, stocks largely drifted sideways. True to 2026 form, strength in the broader market had a positive tilt, with select cyclical and defensive sectors posting solid gains, while mega-caps faced weakness. 

Amazon (AMZN 204.20, -2.70, -1.31%) and Alphabet (GOOG 311.24, -7.39, -2.32%) continued to face pressure after their earnings releases last week, weighing on the communication services (-1.3%) and consumer discretionary (-0.6%) sectors. 

The information technology sector (+0.3%) had the bumpiest morning but managed to close modestly higher as the broader AI infrastructure landscape had a solid day. The PHLX Semiconductor Index (+2.3%) was lifted by a sharp rebound in memory storage names such as Sandisk (SNDK 599.34, +57.70, +10.65%) and Micron (MU 410.34, +37.09, +9.94%) after some weakness yesterday. 

Software stocks, on the other hand, faced renewed pressure after some relief in the previous session. The iShares GS Software ETF (IGV) finished 2.6% lower, and Microsoft (MSFT 404.37, -8.90, -2.15%) was once again a mega-cap laggard. 

Earnings also played a role in today's action, with several sectors' best and worst performing components being results of this morning's releases.

Smurfit Westrock plc (SW 50.28, +4.53, +9.90%) contributed to a solid day for the materials sector (+1.3%), while Generac (GNRC 214.99, +32.69, +17.93%) was the best-performing S&P 500 name, helping the industrials sector (+0.5%) notch a gain. 

Meanwhile, Robinhood Markets (HOOD 78.07, -7.53, -8.80%) was one of the worst-performing S&P 500 names after missing revenue expectations. The financials sector (-1.5%) was a laggard as major banking and financial services stocks saw a continuation of yesterday's weakness. 

Elsewhere, the energy sector (+2.6%) finished as the best-performing S&P 500 sector as heightening geopolitical tensions between the U.S. and Iran contributed to crude oil futures settling today's session $0.59 higher (+0.9%) at $64.60 per barrel. 

The consumer staples sector (+1.5%) also logged a nice gain on broad strength throughout the sector as it rebounded from yesterday's weakness that followed a flat retail sales report for December. 

Outside of the S&P 500, the Russell 2000 (-0.4%) and S&P Mid Cap 400 (-0.2%) were never able to reclaim their opening gains. 

Overall, the session underscored the market's familiar push-and-pull between resilient breadth and ongoing mega-cap pressure, leaving the major averages little changed by the close. With rate-cut expectations recalibrating and earnings continuing to drive sharp single-stock moves, the market proceeded cautiously in anticipation of its next catalysts. 

U.S. Treasuries retreated on Wednesday with the short end leading the move, though the entire complex spent the day in a steady rally off lows that were reached in immediate reaction to a stellar jobs report for January (130,000; Briefing.com consensus 68,000). The 2-year note yield settled up six basis points to 3.51%, and the 10-year note yield settled up three basis points to 4.17%. 

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -0.3%; Prior -8.9%
• January Nonfarm Payrolls 130K (Briefing.com consensus 68K); Prior was revised to 48K from 50K, January Nonfarm Private Payrolls 172K (Briefing.com consensus 60K); Prior was revised to 64K from 37K, January Unemployment Rate 4.3% (Briefing.com consensus 4.4%); Prior 4.4%, January Average Hourly Earnings 0.4% (Briefing.com consensus 0.3%); Prior was revised to 0.1% from 0.3%, January Average Workweek 34.3 (Briefing.com consensus 34.2); Prior 34.2
  • The key takeaway from the report is that it is a positive sign for the U.S. growth outlook, yet it may come with the cost of foregoing an additional rate cut by the Fed, at least in the near future.
• The Treasury's budget deficit was $94.6 billion in January (Briefing.com consensus: -$190.0B), which was much narrower than expected and a notable improvement from the same period a year ago when it was $128.6 billion. Receipts totaled $559.9 billion, while outlays summed to $654.6 billion.
  • The key takeaway from the report is that it shows the benefits of collecting customs duties as a means of reducing the deficit. At the same time, it also reflects the onerous interest costs stemming from the high amount of debt issuance needed to fund government operations. Weekly crude oil inventories increased by 8.53 million barrels after decreasing by 3.46 million barrels a week ago.

Thursday: 

Stocks had their toughest session of the week today, quickly ceding modest opening gains amid renewed pressure across software and mega-cap stocks and fears of broader disruption from AI elsewhere. 

The S&P 500 (-1.6%), Nasdaq Composite (-2.0%), and DJIA (-1.3%) finished lower across the board as weakness broadened throughout the session. The market's clear "risk-off" positioning led the Russell 2000 (-2.0%) and S&P Mid Cap 400 (-1.4%) to similar retreats. 

Weakness was first evident in the information technology sector (-2.7%), which closed as the worst-performing S&P 500 sector today. 

Software stocks came under renewed scrutiny after AppLovin (APP 366.91, -89.90, -19.68%) delivered a beat-and-raise earnings report but sold off sharply, finishing as the worst-performing S&P 500 component today. The iShares GS Software ETF (IGV) finished 2.7% lower. 

While memory storage stocks such as Sandisk (SNDK 630.29, +30.95, +5.16%) and Micron (MU 413.97, +3.63, +0.88%) finished higher after a retreat yesterday, they ended the day well off of their earlier highs, and weakness across other chipmaker stocks sent the PHLX Semiconductor Index 2.5% lower. 

Cisco (CSCO 75.00, -10.54, -12.32%) was another earnings laggard, with its warning that higher memory costs will be adversely affecting its profit margins weighing on other hardware names such as Dell (DELL 112.85, -11.31, -9.11%) and Apple (AAPL 261.73, -13.77, -5.00%). 

While the broadening out of leadership from tech into cyclical sectors has been a prominent headline in 2026, today's session did not follow that trend, with several notable retreats in the mix. 

This year's best performer, the energy sector, closed 2.2% lower amid a falling price of oil. Bloomberg reported that President Trump told reporters that he expects negotiations with Iran to be resolved over the next month, a development that helped crude oil futures settle today's session $1.72 lower (-2.7%) at $62.88 per barrel. 

The financials sector (-2.0%) was another laggard, expanding this week's losses to 4.8%. Robinhood Markets (HOOD 71.12, -6.85, -8.79%) continues to sink after its earnings release, while today saw an extension of yesterday's weakness across major banking names. There was some modest buying support across some financial services and insurance names that faced pressure in previous sessions amid concerns of AI disruption, but it was nowhere near enough to offset losses elsewhere. 

The AI disruption theme did have a tangible effect on the industrials sector (-1.2%) today, with courier stocks such as C.H. Robinson (CHRW 167.78, -28.55, -14.54%) and Expeditors Intl (EXPD 140.45, -21.44, -13.24%) finishing sharply lower. 

Elsewhere, mega-cap weakness weighed on the consumer discretionary (-1.6%) and communication services (-1.5%) sectors, sending the Vanguard Mega Cap Growth ETF 1.8% lower. Amazon (AMZN 199.60, -4.48, -2.20%) is yet to notch a higher finish after its earnings release last Thursday. 

Unsurprisingly, some more defense-oriented corners of the market garnered some rotational interest today. 

The utilities sector (+1.5%) captures the widest gain, with Exelon (EXC 47.55, +3.10, +6.97%) leading the advance after topping earnings estimates. 

The consumer staples sector (+1.2%) finished similarly, with Walmart (WMT 133.64, +4.87, +3.78%) adding to its impressive start to the year and finishing as the best-performing Dow component today. 

The real estate sector (+0.3%) also captured a modest gain. 

Ultimately, today's session saw the market give up some ground as AI disruption concerns mingled with this year's pattern of weakness in mega-cap tech. After a strong rebound effort on Friday and several uneventful sessions this week, it is almost easy to forget that the major averages logged losses of 1.0% or wider across the board last Thursday as well. However, the retreat today showed that recent headwinds have not yet fallen by the wayside, leaving the market on defensive footing heading into tomorrow's release of the January CPI (Briefing.com consensus 0.3%; prior 0.3%) and Core CPI (Briefing.com consensus 0.3%; prior 0.2%) readings.

U.S. Treasuries had a strong showing on Thursday with some help from weakness in equities and an impressive 30-year bond auction. The 2-year note yield settled down four basis points to 3.47%, and the 10-year note yield settled down seven basis points to 4.17%.

Reviewing today's data:

• Weekly Initial Claims 227K (Briefing.com consensus 230K); Prior was revised to 232K from 231K, Weekly Continuing Claims 1.862 mln; Prior was revised to 1.841 mln from 1.844 mln
  • The key takeaway from the report is its steady messaging that layoff activity is low and that hiring activity is slow.
• January Existing Home Sales 3.91 mln (Briefing.com consensus 4.21 mln); Prior was revised to 4.27 mln from 4.35 mln
  • The key takeaway from the report is that the existing home market remains supply constrained. That is pushing up prices and mitigating some of the affordability benefits linked to wage growth and lower mortgage rates.

Friday: 

Stocks had a choppy session that culminated in considerable late afternoon selling pressure, sending the S&P 500 (+0.1%), Nasdaq Composite (-0.2%), and DJIA (+0.1%) to a mixed finish. The S&P 500 was unable to reclaim its 50-day moving average (6,894.75), which it closed below yesterday. 

While the broader market traded higher for most of the session, the major averages moved in tandem with fluctuations across mega-cap and tech names. 

The top-weighted information technology sector (-0.5%) had a particularly volatile session. The sector spent much of the morning oscillating around its unchanged level before plotting a steady advance through the midday hours. 

Software names finally saw some relief, with the iShares GS Software ETF (IGV) finishing 2.2% higher. 

Applied Materials (AMAT 354.91, +26.52, +8.08%) and Arista Networks (ANET 141.59, +6.47, +4.79%) also contributed solid gains after their earnings reports. 

However, increasing pressure across some of the sector's largest components ultimately led it to a lower finish. NVIDIA (NVDA 182.78, -4.16, -2.23%) and Apple (AAPL 255.78, -5.95, -2.27%) were especially weak, with the losses overshadowing broad gains throughout the sector. 

The communication services sector (-0.8%) finished with the widest loss today as Meta Platforms (META 639.77, -10.04, -1.55%) and Alphabet (GOOG 306.02, -3.35, -1.08%) added to the pressure across mega-caps

The consumer discretionary sector (-0.1%) also logged a lower finish as Amazon (AMZN 198.79, -0.81, -0.41%) has yet to notch a gain since its earnings release last week. 

Ultimately, the Vanguard Mega Cap Growth ETF finished 0.6% lower, which contributed to the underperformance of the market-weighted S&P 500 (+0.1%) relative to the S&P 500 Equal-Weighted Index (+1.0%). 

Despite the persistent weakness in some of the markets' weightiest names, there were some solid performances across other sectors. 

The defensive utilities sector (+2.7%) surged higher as more defensive pockets continue to generate rotational interest amid the weakness in tech. All 31 of the sector's components finished higher. 

The health care sector (+1.0%) also notched a solid gain, while certain cyclical sectors, including the materials (+1.1%) and industrials (+0.8%) sectors, rebounded from a sharp slide yesterday. 

Meanwhile, rate-sensitive pockets of the market also outperformed today following a solid CPI report for January, which showed a cooler-than-expected increase at the headline level (0.2%; Briefing.com consensus 0.3%) that resulted in a deceleration in the year-over-year rate to 2.4% from 2.7%. Core CPI (0.3%) matched expectations, with the year-over-year growth rate decelerating to 2.5% from 2.6%.

The real estate sector (+1.5%) logged a solid gain, finishing as one of the top-performing S&P 500 sectors this week. 

The smaller-cap Russell 2000 (+1.2%) and S&P Mid Cap 400 (+0.8%) also outperformed, further distancing themselves from the major averages this year. 

Ultimately, the session underscored the market's ongoing bifurcation, with late-day pressure in mega-cap growth offset by sustained rotational strength elsewhere. Until leadership broadens meaningfully beyond the largest tech names, the major averages may continue to struggle for decisive upside traction.

U.S. Treasuries enjoyed a strong finish to the week, sending yields on the 5-year note and longer tenors to their lowest closing levels since early December, while the 2-year yield settled at its lowest level since September 2022, though it remained above its 2025 intraday low that was notched on October 17 (3.378%).

The 2-year note yield settled down six basis points to 3.41% (-9 basis points this week) and the 10-year note yield settled down five basis points to 4.06% (-15 basis points this week).

Bond and equity markets will be closed on Monday for Presidents Day.

Reviewing today's data:

• January CPI 0.2% (Briefing.com consensus 0.3%); Prior 0.3%, January Core CPI 0.3% (Briefing.com consensus 0.3%); Prior 0.2%
  • The key takeaway from the report is that it showed some encouraging disinflation on a year-over-year basis, which the market will perceive as an opening for the Fed to consider additional rate cuts even with GDP growth running above potential.