Anna's Markets Recap

_{Just facts, you think for yourself}

Saturday, 5:07 AM

February 14, 2026

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

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Executive Summary: What Moved Markets Last Week

The week of February 6–13, 2026 marked a dramatic inflection point for U.S. markets. The Dow Jones Industrial Average crossed 50,000 for the first time in history, only to surrender those gains days later as an AI-driven disruption narrative triggered the Nasdaq's worst single session of 2026. A cooler-than-expected CPI print on February 13 failed to ignite a sustained rally, confirming that investor anxiety had shifted from inflation to a more existential question: will artificial intelligence destroy more corporate value than it creates? Across the six trading days (Feb 6, 9, 10, 11, 12, 13), a violent rotation unfolded — out of mega-cap tech and software, into small caps, consumer staples, energy, and international markets. The S&P 500 ended the period roughly flat, but beneath the surface, fortunes diverged by tens of billions of dollars in a single session.

The macro backdrop: soft CPI, stronger jobs, and a consumer losing steam

Four major economic data releases shaped the week, all delayed by a 43-day government shutdown that ended February 3:

January CPI (released Feb 13) came in cooler than expected — +0.2% month-over-month (vs. +0.3% consensus) and 2.4% year-over-year (vs. 2.5% expected), the lowest annual reading since May 2025. Energy prices fell 1.5%, while shelter costs rose a modest 0.2%. The report immediately pushed 2-year Treasury yields to their lowest since 2022 and raised the probability of a June Fed rate cut to 93.6% on CME FedWatch. Yet equities barely budged — the S&P 500 gained just 0.05% on the day, as mega-cap tech continued to lag.

January nonfarm payrolls (released Feb 11) surprised to the upside with +130,000 jobs against a +55,000 consensus. The unemployment rate ticked down to 4.3%. Healthcare led gains (+82,000), while federal government employment fell 34,000 as DOGE-related deferred resignations rolled off payrolls. However, benchmark revisions painted a far weaker 2025 than previously understood: total 2025 employment was revised down by 898,000 jobs, reducing average monthly gains to just 15,000 from a previously reported 49,000.

December retail sales (released Feb 10) landed at a dismal 0.0% month-over-month, missing the +0.4% consensus. The control group, which feeds into GDP calculations, actually declined 0.1% — the first drop in three months. Furniture (-0.9%), clothing (-0.7%), and electronics (-0.4%) all weakened, while building materials (+1.2%) offered a rare bright spot.

University of Michigan consumer sentiment (released Feb 6) rose to 57.3 from 56.4, beating the 55.0 consensus and reaching its highest level since August 2025. Critically, year-ahead inflation expectations dropped sharply to 3.5% from 4.0%. However, the improvement was concentrated among households with large equity portfolios; sentiment among non-investors stagnated at depressed levels.

Other data points reinforced a mixed picture. Weekly jobless claims (Feb 12) came in at 227,000, slightly above the 222,000 forecast. JOLTS data showed job openings fell to 6.54 million — a ratio of just 0.87 openings per unemployed worker, the lowest since April 2020. Conference Board consumer confidence had already plummeted to 84.5 in January, its lowest since 2014.

Index performance: Dow's 50,000 party lasted exactly four days

The Dow's milestone moment arrived on February 6, when it surged 1,207 points (+2.47%) to close at 50,115.67 — its first finish above 50,000. The rally extended through February 10, when the Dow posted a closing record of 50,188.14 and touched an intraday high of 50,398. But the celebration was short-lived. On February 12, the Dow plunged 669 points (-1.34%) to 49,451.98, dragged down by Cisco's 12% collapse and Apple's 5% selloff. It closed the period at 49,500.93.

The S&P 500 followed a similar arc — jumping +1.97% on February 6 to 6,932.30 (its best session since May), then deteriorating through the week to close at 6,836.17 on February 13, posting its worst week since November. The Nasdaq bore the heaviest damage: after rallying +2.18% on February 6, it suffered a -2.03% drubbing on February 12 — the worst single session of 2026 — finishing the period at 22,546.67, down roughly 2.1% from the start. The Russell 2000 outperformed, rallying +1.2% on February 13 alone as rate-cut expectations favored small caps.

The VIX told the fear story most clearly: it surged 18% on February 12 to 20.83, crossing the psychologically critical 20-level, and climbed further to 21.77 on February 13 despite the soft CPI. Treasury yields declined throughout the week, with the 10-year falling from 4.22% to approximately 4.11% — a two-month low — as bonds attracted safe-haven flows.

Technology and growth: the $630 billion capex question

The dominant narrative of the week was not a single earnings miss or product failure — it was the collective shock of $630+ billion in announced 2026 AI capital expenditure from hyperscalers (Amazon $200B, Alphabet $175–185B, Meta $115–135B, Microsoft ~$148B annualized). Investors increasingly demanded proof that this spending would generate returns, and each day brought fresh evidence that AI was disrupting incumbents faster than it was enriching them.

Apple (AAPL) suffered the week's most dramatic single-day decline. On February 12, the stock plunged 5.00% to $261.73 — its worst session since April 2025 — erasing roughly $200 billion in market cap. Two catalysts converged: Bloomberg reported that Apple's AI-powered Siri upgrade was hitting internal testing snags, with features potentially delayed from iOS 26.4 (March) to iOS 26.5 or even iOS 27 (September); and FTC Chairman Andrew Ferguson sent a letter to Tim Cook alleging Apple News may be censoring conservative outlets, raising potential FTC Act violation concerns. Volume surged to 77.3 million shares, well above the 62.3 million average. Apple opened the period at $278.12 (Feb 6) and traded around $259.09 on February 13, a decline of roughly 7% for the week. Despite the selloff, underlying fundamentals remained strong: Q1 FY2026 earnings (reported Jan 30) showed record revenue of $143.8 billion (+16% YoY) with iPhone sales up 23%, and Counterpoint Research data showed Apple's China market share climbing to 19% in January.

NVIDIA (NVDA) was the relative winner among mega-cap tech, gaining modestly from approximately $181.77 (Feb 6) to ~$187.19 (Feb 13) as investors positioned ahead of the most anticipated earnings event of the quarter — Q4 FY2026 results scheduled for February 25. The stock rallied over 2% on February 9 and touched ~$194 intraday on February 11 before pulling back. UBS raised its price target from $235 to $245, and Goldman Sachs maintained a $250 target. Consensus expects Q4 revenue of approximately $65.5 billion and EPS of $1.52. Nvidia trades at roughly 27x forward earnings, a discount to its historical premium, reflecting investor caution despite the company's dominant position in AI infrastructure.

Microsoft (MSFT) swung through a wide range — rallying +3.11% on February 9 to $413.60 before falling -2.15% on February 11 and closing at ~$404.60 on February 13. The stock sits 22% below its all-time high of $555.45 (October 2025). Azure's 39% growth rate, while strong, trails Google Cloud's 48%, and the software disruption narrative weighed heavily: the iShares Expanded Tech-Software ETF (IGV) entered bear market territory, down roughly 31% from its highs. Goldman Sachs recommended buying the dip on February 13, and Microsoft announced a $0.91 cash dividend with an ex-date of February 19.

Amazon (AMZN) was arguably the week's biggest casualty. The stock entered the period reeling from its February 5 Q4 earnings report — which beat on revenue ($213.39B, +14% YoY) and AWS growth (24% YoY, fastest in 13 quarters) but shocked markets with $200 billion in 2026 capex guidance against analyst expectations of $146.6 billion. By February 12, Amazon had posted its eighth consecutive day of decline — the longest losing streak since 2006 — and MarketWatch declared the stock had entered bear market territory. D.A. Davidson downgraded to Neutral on February 6. The stock fell from approximately $220 on February 6 to ~$200.24 on February 13, a decline of roughly 9%. AWS CEO Matt Garman told CNBC on February 12 that fears about AI disrupting software were "overblown."

Meta Platforms (META) traded from $661.46 (Feb 6) to approximately $654 on February 13, a modest 1% decline. The standout event was Bill Ackman's Pershing Square disclosing a ~$2 billion stake on February 11, calling Meta "deeply discounted" and "one of the world's greatest businesses." Bank of America raised its target to $885, Cantor Fitzgerald to $860, and Jefferies named Meta a top pick with a $1,000 target. Despite this bullish chorus, the stock couldn't escape the broader tech selloff, falling 2.82% on February 12. Russia's blocking of WhatsApp added a minor geopolitical headwind.

Alphabet (GOOGL) spent the week digesting its own capex sticker shock ($175–185B for 2026) and executing its largest-ever bond sale — $20 billion in USD-denominated bonds plus a debut sterling issuance including a rare 100-year "century bond" at a 6.125% coupon, the first by a tech company since Motorola in 1997. Total proceeds reached $32 billion in under 24 hours, nearly 10x oversubscribed. The stock traded from approximately $322 (Feb 6) to $309.00 on February 12, settling around $307–$316 on February 13. Waymo began deploying next-generation "Ojai" robotaxis in San Francisco and Los Angeles.

Tesla (TSLA) was range-bound, trading between roughly $411 and $428 over the period. It closed at $422.99 on February 9 (+1.36%), rallied to $428.27 on February 11, then pulled back to $416.85 on February 12 amid the broad selloff. Robotaxi optimism, Optimus robot production slated for Q1, and Cybercab production planned for April 2026 provided upside narratives, but declining U.S. EV sales and sharply bearish retail sentiment on Reddit offset them. The analyst consensus is mixed: 11 Buy, 12 Hold, 7 Sell, with JPMorgan maintaining a $145 sell target versus an average target of $393.51.

Salesforce (CRM) hit a 52-week low of $180.24 intraday on February 12 — down an extraordinary 43% from its 52-week high of $330.35 a year earlier. The software "SaaSpocalypse" narrative — fears that AI agents from Anthropic and OpenAI will cannibalize traditional CRM seat-based licensing — crushed the stock. Despite a $5.6 billion U.S. Army IDIQ contract win and analysts maintaining an average target of $320.76, the stock ended the period around $185, down roughly 25% YTD.

Netflix (NFLX) hit its own 52-week low of $75.23 on February 12 (post-split adjusted), falling 4.73% to close at $75.86 — down roughly 44% from its June 2025 high of $134.12. The dominant overhang was antitrust scrutiny of the $82.7 billion Warner Bros. Discovery acquisition: the DOJ expanded its probe, the Senate held hearings on February 12 where co-CEO Ted Sarandos testified, and activist investor Ancora publicly opposed the deal.

Broadcom (AVGO) declined from approximately $343 (Feb 6) to ~$327.89 on February 13, weighed down by a 6.6% plunge on February 11 on concerns that rapid AI-driven sales could squeeze margins. DA Davidson initiated coverage with a cautious Neutral rating and $335 price target on February 13, notably below the consensus average of $458.59. The stock trades roughly 20% below its December 2025 peak of $414.61. Broadcom remains a key beneficiary of Alphabet's massive capex through its custom Google TPU chip designs.

Financial institutions weathered a brutal week, except Berkshire

The financial sector suffered its worst week of 2026, hit by a cascade of analyst downgrades, the credit card rate cap debate, and the broader rotation out of growth stocks.

JPMorgan Chase (JPM) fell from approximately $319–321 (Feb 6) to $303.15 on February 13, a decline of roughly 5–5.5%. The sharpest pain came on February 11 (-2.34%) and February 12 (-2.6%), when Goldman Sachs fell 5.1% and Citigroup dropped 5% in a sector-wide rout. On February 12, JPMorgan announced a major reorganization of its Commercial and Investment Bank to "maximize the impact of AI," naming Guy Halamish — a former Israeli intelligence officer and 20-year JPM veteran — as CIB COO. The stock sits about 10% below its January 5 high of $337.25.

Visa (V) declined from $331.58 (Feb 6) to approximately $313.84 on February 13 (intraday), a drop of roughly 5.4%. This came despite strong Q1 FY2026 earnings (reported Jan 29) showing revenue of $10.9 billion (+15% YoY) and payments volume up 8%. Visa launched its "Visa & Main" small-business platform with a $100 million working-capital facility on February 5–6. The ex-dividend date fell on February 10 ($0.67/share).

Mastercard (MA) fell from approximately $547–550 (Feb 6) to around $527.46 on February 12, a weekly decline of roughly 5.5–6%. The drop occurred despite a Q4 2025 earnings beat — adjusted EPS of $4.76 crushed the $4.20–4.25 consensus by 12–13% — and 2026 guidance for revenue growth at the high end of the low-double-digit range. The credit card rate cap debate, with Trump pushing for a 10% maximum, remained a significant overhang for both payment processors.

Bank of America (BAC) was the week's worst financial-sector performer. After rallying +3.26% to $56.73 on February 6, the stock deteriorated steadily, closing at $52.64 on February 13 — a weekly decline of roughly 7.2%. A Reuters report on February 12 that a U.S. judge found BAC's alleged "reckless disregard" supports an Epstein-related lawsuit added negative sentiment. CEO Brian Moynihan discussed the 10% credit card rate cap on Bloomberg TV, with BAC reportedly considering offering cards at that rate in response.

Berkshire Hathaway (BRK.B) was the clear outlier, finishing the period essentially flat at $500.73 on February 13. Its defensive profile — $381.6 billion in cash, diversified operations, and insurance float — made it a relative safe haven during the selloff. SEC filings revealed Berkshire registered to sell its ~325 million shares of Kraft Heinz, Greg Abel's first major portfolio move since becoming CEO on January 1, 2026. A "billion dollar payday" from Japanese trading house holdings (boosted by election results) and DaVita's ~20% post-earnings surge further supported the stock.

Consumer staples and healthcare: the defensive rotation's biggest winners

As tech cratered, defensive sectors attracted capital. Consumer staples rose +7.52% YTD through February 10 — the second-best performing S&P 500 sector behind energy (+14.37%).

Walmart (WMT) delivered the week's most impressive performance among all companies tracked. The stock reached $1 trillion in market cap for the first time around February 3 — the first traditional retailer to achieve this milestone — and continued climbing, surging +3.78% to ~$133.64 on February 13, a new all-time high. New CEO John Furner (who replaced Doug McMillon on February 1) inherited a company with e-commerce growth of 27% globally, an advertising business growing 53%, and Walmart+ membership at 28.4 million. Q4 earnings are scheduled for February 19 — the next major retail catalyst — with EPS consensus at $0.73.

Johnson & Johnson (JNJ) also reached all-time highs, closing at $244.55 on February 12 (+1.53%) and trading near $244.43 on February 13. The stock gained roughly 2% for the period, buoyed by strong clinical data: 12-month results from the OMNY-AF study (presented February 6) showed 90% primary effectiveness for atrial fibrillation treatment, and VARIPULSE data across 6,811 patients showed a 0% neurovascular event rate. Morgan Stanley's upgrade in late January, citing a robust drug pipeline, continued to drive inflows. The stock is up approximately 53% over the past 12 months.

Eli Lilly (LLY) gained roughly 2% for the period, climbing from approximately $1,020–1,030 (Feb 6) to ~$1,048 on February 13. On February 11, China's regulatory authority approved mirikizumab (Omvoh) for Crohn's disease and ulcerative colitis — Lilly's first China approval in digestive immunity. The company also announced a partnership with gene-editing startup Seamless Therapeutics (Feb 10) and acquired Orna Therapeutics for up to $2.4 billion. Oral orforglipron, the potential blockbuster oral GLP-1 drug, is expected to receive FDA approval by Q2 2026. Lilly holds 60.5% market share in incretin analogs, with tirzepatide generating over $30 billion in 2025 sales.

UnitedHealth Group (UNH) showed signs of stabilization after its catastrophic late-January plunge (~18–20%), recovering from approximately $268.55 (Feb 6) to ~$285.49 on February 13. The stock remains devastated — down 48% from its 52-week high of $606.36 — battered by a CMS proposal for only a 0.09% net increase in Medicare Advantage rates for 2027 (vs. 4–6% expected), ongoing DOJ civil and criminal probes into MA billing practices, and 2026 revenue guidance of $439 billion that implies the company's first revenue decline since 1989.

AbbVie (ABBV) traded sideways, ranging from $220.89 to $227.50 during the period. The most significant development was ABBV suing HHS/CMS on February 11 over the inclusion of Botox in Medicare's Drug Price Negotiation Program, arguing that Botox qualifies as a "plasma-derived product" exempt from price controls. The lawsuit names Health Secretary RFK Jr. and CMS administrator Mehmet Oz as defendants.

Procter & Gamble (PG) rose modestly from $159.17 (Feb 6) to ~$161.71 on February 12, benefiting from safe-haven demand and its status as a Dividend King with 69 consecutive years of dividend increases. The company faces $900 million in tariff headwinds and plans mid-single-digit price increases on approximately 25% of SKUs. Costco (COST) traded in a tight range around $998–1,023, awaiting its March 5 earnings report, with membership renewal rates holding at approximately 90%.

Energy surged on Iran tensions, then reversed; gold consolidated near $5,000

Exxon Mobil (XOM) captured the week's geopolitical volatility perfectly. The stock climbed from $149.05 (Feb 6) to an all-time closing high of $154.53 on February 11 (intraday peak: $156.93) as U.S.-Iran tensions escalated — the U.S. warned ships to avoid Iranian waters and nuclear talks hit a snag. Then on February 12, XOM reversed sharply, falling 2.98% to $149.93, hurt by its ex-dividend date ($0.99/share), an oil pullback on Iran diplomacy optimism, and the broader equity selloff. By February 13, the stock settled at approximately $149.49, essentially flat for the period but up a remarkable 24% YTD in 2026.

Oil prices tracked the Iran narrative closely. Brent crude rose from approximately $66–67/barrel on February 6 to $69.30 on February 11 before pulling back to ~$68.77 on February 12. WTI crude traded in a $62–64 range. The EIA's Short-Term Energy Outlook (Feb 10) forecast Brent averaging just $58/barrel for full-year 2026 — suggesting significant downside risk if geopolitical premiums fade. A massive 13.4-million-barrel U.S. inventory build reported on February 11 underscored the fundamental oversupply concern.

Gold consolidated in the $4,931–$5,072 range, roughly 10% below its all-time record of $5,602.22 set on January 28. Spot gold climbed from $4,931 (Feb 6) to a period high of $5,072 on February 11, supported by dollar weakness, safe-haven demand, and central bank buying (the PBoC extended purchases for a 15th consecutive month). On February 13, gold initially dropped to $5,001 on the CPI release before recovering sharply to approximately $5,055 by close — a +2.5% gain for the period. Year-over-year, gold prices are up approximately 72–74% from February 2025 levels of ~$2,860–2,927.

Home Depot (HD) traded in a narrow range, rising modestly from approximately $382 (Feb 6) to ~$390 on February 13, up about 2.1%. The stock is positioning ahead of Q4 FY2025 earnings on February 24. On February 11, building-products distributor QXO agreed to buy Kodiak Building Partners for $2.25 billion, taking direct aim at Home Depot and Lowe's market share. The housing market remains frozen: persistently elevated mortgage rates have pushed housing turnover to 40-year lows, and management has cited economic uncertainty as the "#1 reason for deferring large projects." Citigroup and TD Cowen both raised price targets to $450 (Buy).

The week ahead and what really changed

Three forces will shape the coming sessions. NVIDIA's Q4 earnings on February 25 represent the single most important data point for the AI investment thesis — consensus expects $65.5 billion in revenue and $1.52 in EPS, but guidance for calendar year 2027 will matter more than the backward-looking beat. Walmart's Q4 report on February 19 will reveal whether the consumer spending deceleration visible in flat December retail sales has deepened. And the February 28 deadline for pharmaceutical companies to opt into Round 3 of Medicare drug price negotiations will set the stage for the next chapter of healthcare policy battles.

What changed this week was not any single data point but a shift in market psychology. The software sector's 20% YTD decline and 31% drawdown from highs — driven by fears that frontier AI models from Anthropic and OpenAI will cannibalize traditional SaaS businesses — signals that Wall Street has moved past "AI benefits everyone" to "AI creates winners and losers." Hedge funds shorted approximately $24 billion in software stocks. The rotation from tech mega-caps into value, small caps, and international equities (Russell 2000 +7.5% YTD vs. Nasdaq roughly flat) may prove to be more than a short-term tremor.

The bond market's message was unambiguous: the 10-year Treasury yield falling to 4.11% and the 2-year dropping to its lowest since 2022 reflect growing conviction that the Fed will cut at least twice in 2026, likely starting in June. With the fed funds rate at 3.50–3.75% and incoming Fed Chair Kevin Warsh's confirmation expected by mid-May, monetary policy remains the one area where the outlook improved during a week when almost everything else deteriorated. Gold's resilience near $5,000, energy stocks' 24% YTD surge, and consumer staples' 7.5% YTD gain all point to the same conclusion: in February 2026, defense is the new offense.

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Baked with love,

Anna Eisenberg ❤️