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Weekly Commentary (02/16/26) – Domestic Stocks Down for Second Straight Week

NDS Wealth Advisors |

Weekly Commentary (02/16/26) – Domestic Stocks Down for Second Straight Week

Despite better-than-expected inflation news and solid employment gains, domestic stocks closed lower for the second consecutive week as fears of artificial intelligence disruption rattled investors.

For the week, the DJIA declined 1.15% while the S&P 500 gave back 1.35%.  The tech-heavy Nasdaq continued its slide and lost 2.08%.   International markets bucked the trend. For the week, the MSCI EAFE index (developed markets) added 1.95% while emerging market equities (MSCI EM) jumped 3.25%.  Small company stocks, represented by the Russell 2000, finished lower by 0.85% for the week.  Fixed income, represented by the Bloomberg Aggregate, finished the week higher as inflation concerns abated and pushed yields lower. As a result, the 10 YR US Treasury closed at a yield of 4.04% (down from the previous week’s closing yield of ~ 4.22%).  Gold prices closed at $5,022.00/oz – up 1.43% on the week.  Oil prices declined 1.04% to close at $62.89%.  

Economic news released last week confirmed a resilient jobs market and moderating inflation.  On Tuesday, The U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) advanced just 0.2% for headline and 0.3% for core in January, one tenth lower than expectations on headline and in-line on core.   Over the past 12 months core CPI rose 2.4%, lower than the 2.5% consensus.   On Wednesday, the Department of Labor released the January jobs report – jobs increased 130k versus the consensus of 70k ... the biggest gain in over a year. Unemployment for January dropped to 4.3% from 4.4% the previous month, reinforcing signs of labor market stability. On Friday the U.S. Commerce Department reported that December retail sales were flat m/o/m, below the expected rise of 0.4%, signaling weaker-than-expected consumer spending.  
 
The week ahead holds several earnings reports from bellwether companies – most notably Walmart, Palo Alto, DoorDash and Medtronic.  All in all, 53 companies in the S&P 500 will report earnings this week.  Major economic reports this week include February Empire Manufacturing, MBA Mortgage Applications, December Preliminary Durable Goods Orders, December Housing Starts, January Industrial Production, December Wholesale Inventories, December Trade Balance, February 14 Initial Jobless Claims, December Personal Income and Spending, December New Home Sales and February Final University of Michigan Sentiment.

We suggest investors stay close to their long-term target asset allocations with a slight defensive bias as short-term market sentiment has soured.