Market View: Week of Feb. 13, 2026
ECONOMIC REVIEW¹
New Federal Reserve (Fed) Chairman Nominee Kevin Warsh suggested a modern Fed–Treasury accord once he has been confirmed into his position.
The suggested Fed-Treasury accord would align the two parts of government on debt issuance and how to maintain their balance sheets.
Critics argue this could blur fiscal and monetary lines and ultimately erode Fed independence in a structurally high-debt environment.
Retail sales, a key measure of consumer spending, were unchanged in December, lagging the expected +0.4% gain. Retail sales are up +2.4% versus a year ago.
Nonfarm Payrolls increased by 130,000 in January, higher than expectations of an increase of 50,000.
The increase was led by healthcare jobs (+82,000). The largest decline was from the federal government (-42,000).
The unemployment rate decreased to 4.3%, down from 4.4% in December.
The Consumer Price Index (CPI) came in slightly softer than expected with headline inflation coming in at 2.4%, and core, which excludes food and energy, coming in at 2.5%.
Month-over-month (MoM) headline inflation was only 0.2%, while core MoM inflation was 0.3%, both of which were in-line with expectations.
How does the most recent economic data impact you?
In December, many households saw depleted savings, and a job market that was at a standstill. This week’s data should help consumers with a strengthening labor market and cooling inflation.
Larger tax refunds should also provide modest relief to some households, allowing for the ability to rebuild savings and pay down credit card balances.
The labor report was a welcome surprise, lessening the market’s worries over prior weakening jobs data.
It is important to remember that one month of solid data does not indicate a trend, and investors should still be keeping an eye on the status of the labor market.
Softer inflation has renewed the idea of the Fed cutting interest rates more, or sooner than expected, as inflation creeps towards the Fed’s 2% target.
A LOOK FORWARD¹
This week, investors will be closely watching the Personal Consumption Expenditures (PCE) report and the 2025 fourth quarter Gross Domestic Product (GDP).
How does this week’s slate of economic data impact you?
After an encouraging CPI reading investors will look to the Fed’s preferred inflation gauge PCE for assurance on cooling inflation.
Fourth quarter GDP will provide investors with confirmation of the strength of the economy heading into 2026.
MARKET UPDATE²
| Market Index Returns as of 2/13/26 | WTD | QTD | YTD | 1 YR | 3 YR | 5 YR |
|---|---|---|---|---|---|---|
| S&P 500 | -1.35% | 0.00% | 0.00% | 13.22% | 19.91% | 13.33% |
| NASDAQ | -2.08% | -2.95% | -2.95% | 13.30% | 24.42% | 10.66% |
| Dow Jones Industrial Average | -1.15% | 3.14% | 3.14% | 13.01% | 15.40% | 11.61% |
| Russell Mid-Cap | -0.05% | 5.69% | 5.69% | 11.87% | 13.06% | 8.14% |
| Russell 2000 (Small Cap) | -0.85% | 6.73% | 6.73% | 17.65% | 12.50% | 4.34% |
| MSCI EAFE (International) | 1.94% | 7.81% | 7.81% | 30.62% | 17.10% | 9.76% |
| MSCI Emerging Markets | 3.25% | 10.81% | 10.81% | 41.23% | 18.08% | 4.20% |
| Bloomberg US Agg Bond | 0.89% | 1.28% | 1.28% | 7.48% | 4.61% | 0.14% |
| Bloomberg High Yield Corp. | 0.12% | 0.73% | 0.73% | 7.67% | 9.24% | 4.38% |
| Bloomberg Global Agg | 1.01% | 1.73% | 1.73% | 8.41% | 4.01% | -1.55% |
OBSERVATIONS
A continuation of last week’s tech sell-off led to all major domestic equity indices finishing in the negative. The NASDAQ led the way (2.08%), with the S&P 500 (-1.35%) and less tech-oriented Dow Jones (-1.15%) not far behind.
Mid- and small-cap equities also saw losses in the week in the broad market sell-off, with both down -0.05% and -0.85%, respectively.
Developed international markets continued their outperformance of domestic markets, rising +1.94%, while emerging markets bounced back, gaining +3.25% for the week.
Domestic fixed income rose, as the Bloomberg U.S. Aggregate Bond index gained +0.89%. Global bonds reversed from the previous week’s performance, up +1.01% on the week.
Corporate credit, particularly lower quality credit, continued its upward trend, rising +0.12% for the week.
BY THE NUMBERS
Software Sell-Off Over Artificial Intelligence (AI) Fears:
In early February 2026, nearly $300 billion in tech market value was erased in a single day as investors reassessed how AI could reshape business models. This impact was felt most by Software as a Service (SaaS) companies like Salesforce, Adobe, and ServiceNow, whose per-user pricing structures may be pressured if AI agents boost worker productivity. Legal and data firms such as Thomson Reuters and LegalZoom saw even steeper declines amid concerns that autonomous AI could replace research and drafting tasks, though investors continue to recognize the enduring value of proprietary, hard-to-replicate datasets. The sell-off reflected growing uncertainty around how AI will change pricing and revenue, rather than a belief that demand for software and data is disappearing.³
The Seahawks are Super Bowl champions:
The Seattle Seahawks are once again Super Bowl champions, claiming the Lombardi Trophy for the first time since the 2013 season. Seattle dominated the New England Patriots from start to finish in Super Bowl LX, smothering the Pats all night en route to a 29-13 victory that wasn't nearly as close as the final score. The Seahawks delivered one of the best defensive performances in Super Bowl history. The Patriots finished with 331 yards of offense, but more than a third came on two late drives that each covered over 100 yards with New England down multiple scores late in the fourth quarter. The so-called "Dark Side Defense" conjured images all night of the famed "Legion of Boom" unit that led Seattle to its last Super Bowl victory -- and by the end of the evening, it was hard to argue this group wasn't worthy of the comparison. Seattle now owns two Super Bowl victories, becoming the 17th franchise with at least two titles.⁴
1 Data obtained from Bloomberg as of 2/13/2026.
2 Data obtained from Morningstar as of 2/13/2026.
8776015