February 9, 2026

Good morning,

Markets

For the week ending 2/6/2026:

• The S&P 500 decreased 0.1% to close at 6,932.30.  
• The yield of the 10-year Treasury bond decreased from 4.24% to 4.21%.
• Oil decreased from $65.21 to $63.55.
• The CBOE Volatility Index (VIX) increased from 17.44 to 20.37.
• U.S. dollar currency exchange rates were:
• EUR/USD: 1.18    (USD stronger from a week ago)
• GBP/USD: 1.35    (USD stronger from a week ago)
• USD/JPY: 156.78  (USD stronger from a week ago)

Market Headlines

• Tech Volatility: Tech stocks sold off sharply for most of the week amid investor concerns over a surge in AI-related capital expenditures and fears that AI could disrupt established software providers. This pressure contributed to the Nasdaq posting its worst three-day performance since April 2025, before a relief rally on Friday limited the index’s weekly decline to 1.8%. The emergence of new AI tools that automate tasks across legal and financial sectors has intensified concerns that existing business and software models may be disrupted faster than companies can adapt.
• Sector Rotation: This week featured a significant sector rotation away from high-growth technology and into “old economy” sectors. The Nasdaq closed down 1.8%, while the consumer defensive and industrial sectors rose 5.83% and 5.61%, respectively. These sectors are viewed as offering more consistent earnings and dividends compared to high-growth technology, which can serve as a hedge against market volatility. Additionally, these sectors are perceived to carry a lower risk of disruption from new AI tools, making them attractive to investors seeking to reduce portfolio exposure to AI.
• Stalling Labor Market: Despite the January 2026 U.S. jobs report being delayed until next Wednesday, the December 2025 report showed that job openings fell to their lowest level in more than five years. Combined with ADP reporting a gain of only 22,000 private-sector jobs in January and layoff announcements reaching their highest level since 2009, the data suggest that the U.S. labor market is stalling. Fed officials have indicated that the labor market is in a “precarious” position and view it as the primary risk to the economic outlook for 2026.

Key Takeaways

• Investors are becoming increasingly wary of AI-related capital spending. While many tech companies continue to report earnings that exceed analyst expectations, investor focus has shifted toward future capital expenditure plans. Amazon’s earnings report on Thursday revealed a projected spending plan of $200 billion for 2026, an increase of more than 50% from 2025. This outlook largely contributed to the stock’s 12.1% decline this week. Similarly, Alphabet (Google) announced plans to double its 2025 expenditures in 2026, with projected spending between $175 billion and $185 billion. As a result, the stock reversed course after reaching an all-time closing high on Monday and finished the week down 5.1%. Last week, we highlighted that investors are looking beyond earnings when assessing sentiment in the tech sector. This week, investors made it clear that there is growing concern over the massive amount of capital being invested in AI and whether the potential returns justify the cost.
• As data continues to indicate that the labor market is softening, all eyes are on Wednesday’s U.S. jobs report. With labor demand reportedly at its lowest level since September 2020 and unemployment trending higher in 2025 to levels not seen since 2021, investors and the Fed will be watching closely to see whether these trends carried into the first month of 2026. Analysts continue to characterize the labor market as a “low hire, low fire” environment; however, with layoff announcements increasing and hiring activity declining, questions are emerging about whether the labor market is beginning to weaken more meaningfully. Markets typically experience heightened volatility and increased volume on days the U.S. jobs report is released, so investors should anticipate a potentially volatile trading day on Wednesday.



The Week Ahead: February 9-12

• Monday: Fed governor commentary (Christopher Waller & Stephen Miran)
• Tuesday: Retail sales    
• Wednesday: U.S. employment report
• Thursday: Initial jobless claims, Existing home sales
• Friday: Consumer Price Index (CPI)

Until next week,

Weller Financial Group

Weller Financial Group is located at 6206 Slocum Road, Ontario, NY 14519 and can be reached at 315-524-8000. Financial Advisors at Weller Financial Group offer advisory services through Commonwealth Financial Network®, a Registered Investment Adviser.

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