Weekly Economic Update: February 10th, 2026

The wild trading continues

We started the week with a partial government shutdown, which was quickly resolved.¹ However, funding for the Department of Homeland Security remains a point of friction and will pop up again when temporary funding runs out on Friday, Feb. 13.²

Then fear and greed stepped into the ring and duked it out. The situation was about overvalued Big Tech stocks, huge spending commitments for AI, and a crypto and precious metal meltdown. Countering that was the narrative that there were better valuations in the broader market, and earnings have been coming in strong, justifying the move to more attractive options. If you look at the trading chart for last week, it will look like a roller coaster — a breath away from new records and euphoria to panicky nervousness that we may be on the verge of collapsing into a correction.

Our view on all this is that markets are never perfectly priced; sometimes they’re overinflated, and sometimes they’re a downright bargain. Even within a hot market, there will be discrepancies with overinflated or hyped-up stocks or sectors sucking up all the oxygen until people decide to move on.

This is why we as individual investors have to look at the long-term picture. Patience, planning, focus and discipline are our superpowers. We cannot compete with the legions of traders and their arsenal of mega computers and algorithms on Wall Street. Our superpowers, in combination with a trusted advisor and a faithfully followed plan, will always serve us well. It allows us to be less emotional and more focused, with the ability to decide when to act rather than be acted upon.

As for the markets last week, despite all the turmoil, we ended up over 1,200 points higher on the Dow (all of it on Friday), to close above 50,000 for the first time.³ The S&P 500 set a new record last Monday before losing ground because of the huge influence of Big Tech and AI, yet we’re still very close to a new record and the psychologically important 7,000-point milestone.⁴

Nasdaq predictably suffered more, but that index has historically been more volatile due to its tech-heavy composition, and if tech stumbles, Nasdaq takes it on the chin.⁵ Yet not everyone has given up on tech, and the true believers piled back in to pick up their favorite tech stocks, which they now view as being on sale.

At least there were other options for people moving out of tech stocks; the same couldn’t be said for silver and gold, which lost some shine before bouncing back.⁶ But the most painful sell-off was Bitcoin, which has now dropped to levels below what its value was when President Donald Trump was reelected in November 2024.⁷ After rising to around $125,000 at the end of September 2025, it was worth around $70,000 at the end of last week. So much for crypto being a hedge against dollar weakness or stock market volatility.

If you hadn’t witnessed the markets’ gyrations last week, you would have thought it was a ho-hum sort of week with new records being set. Again, it solidifies the argument for discipline and patience. There’s a lesson here: If you focus too much on a narrow set of options, when things don’t work out, there are few places to pivot to. When Bitcoin drops, there isn’t another cryptocurrency to find shelter in. Same with precious metal. That’s why we typically urge moderation with these types of investments and recommend not painting yourself into a corner.

Will the cavalry arrive in time?

The jobs picture continues to deteriorate. The Job Openings and Labor Turnover Survey (JOLTS) data for December showed one million fewer openings (6.5 million current openings), while the ADP employment report showed an anemic +22,000 new corporate jobs created in January.^8,9 (Consensus was calling for 30,000-65,000 new jobs, which was pretty weak to start with.) And the Challenger report showed U.S. companies laid off more than 100,000 workers in January.¹⁰ That’s up 118% from the same period 12 months ago and 205% from December 2025. It’s also the highest number of layoffs for any January since 2009.

All this before we even see the January Bureau of Labor Statistics (BLS) employment situation for January. That report was pushed back to this week because of the mini government shutdown. This “no hire, no fire” jobs market is clearly leaning to the “fire” side of the equation.

So, what was Fed Chair Jerome Powell thinking when he said the jobs market had “stabilized” and the Fed would focus on inflation going forward?¹¹ The job market clearly needs help, and although interest rate cuts may not fix the problem, they can go a long way toward helping employers keep their heads above water and perhaps retain their workers. Maybe we won’t see interest rate cuts at the next two meetings because the Fed made another policy mistake, but let’s hope we also see the last of Powell as Fed chair before things get worse. We think we hear the bugle — but the cavalry hasn’t appeared yet!

Coming this week

• Monday will feature a bevy of Fed speakers. Now that President Trump has announced Kevin Warsh as his pick for Fed chair, there likely won’t be anything of interest in their comments other than an explanation of the Fed’s shift from focusing on jobs to inflation after all the weak jobs data we’ve been seeing.
• On Tuesday, we’ll have retail sales, imports and more Fed speakers.
• Wednesday will feature the delayed BLS employment report, MBA mortgage applications and — you guessed it — more Fed speakers.
• We’ll see existing home sales and weekly unemployment claims on Thursday.
• Finally, we’ll get the consumer price index (CPI) for January on Friday. The last reading was 2.7% for CPI and 2.6% for core CPI year over year.¹² This week will tell us in no uncertain terms whether the Fed has gotten it right or missed the mark again in a long series of mistakes. If jobs continue to crater and CPI declines, we’ll have our answer.
• Fourth-quarter 2025 earnings continue to impress.¹³ As of Feb. 6, 59% of S&P 500 companies have reported results, with 76% reporting positive earnings per share (EPS) and 73% reporting positive revenue. Earnings growth for Q4 is 13.0% (up from 11.8% in the third quarter).
• For the current quarter, 23 S&P 500 companies have issued negative EPS guidance, and 28 have issued positive EPS guidance. Valuation is still historically high for the S&P 500, with the forward 12-month price-to-earnings (P/E) ratio at 21.5 vs. 22.7 in the third quarter, down slightly. This P/E ratio is higher than the 5-year (20) and 10-year (18.8) averages.

Sources:

¹ Kevin Freking. AP. Feb. 3, 2026. “Trump signs bill to end partial government shutdown, setting stage for next fight.” https://apnews.com/article/government-shutdown-ice-funding-471e55ba4c3247051739ee1b50b2857a. Accessed Feb. 8, 2026.

² Alexander Bolton. The Hill. Feb. 6, 2026. “GOP, Democrats expect DHS shutdown after talks fizzle.” https://thehill.com/homenews/senate/5725706-ice-cbp-reforms-stalemate/. Accessed Feb. 8, 2026.

³ Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed Feb. 8, 2026.

⁴ Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC. Accessed Feb. 8, 2026.

⁵ Yahoo! Finance. “NASDAQ Composite (ˆIXIC).” https://finance.yahoo.com/quote/%5EIXIC/. Accessed Feb. 8, 2026.

⁶ Lee Ying Shan. CNBC. Feb. 1, 2026. “Silver and gold extend losses after last week’s historic plunge.” https://www.cnbc.com/2026/02/02/gold-silver-sell-off-historic-plunge-.html. Accessed Feb. 8, 2026.

⁷ Greg Iacurci and Sarah Agostino. CNBC. Feb. 5, 2026. “Bitcoin sells off amid ‘crypto winter.’ What investors need to know.” https://www.cnbc.com/2026/02/05/bitcoin-prices-crypto-crash-selloff-investors.html. Accessed Feb. 8, 2026.

⁸ U.S. Bureau of Labor Statistics. Feb. 5, 2026. “Job Openings and Labor Turnover Summary.” https://www.bls.gov/news.release/jolts.nr0.htm. Accessed Feb. 8, 2026.

⁹ ADP Research. January 2026. “ADP® National Employment Report.” https://adpemploymentreport.com/. Accessed Feb. 8, 2026.

¹⁰ Challenger, Gray & Christmas. “Feb 05 Challenger Report: January Job Cuts Surge; Lowest January Hiring on Record.” https://www.challengergray.com/blog/challenger-report-january-job-cuts-surge-lowest-january-hiring-on-record/. Accessed Feb. 8, 2026.

¹¹ Federal Reserve. Jan. 28, 2026. “Federal Reserve issues FOMC statement.” https://www.federalreserve.gov/newsevents/pressreleases/monetary20260128a.htm. Accessed Feb. 8, 2026.

¹² U.S. Bureau of Labor Statistics. Jan. 13, 2026. “Consumer Price Index Summary.” https://www.bls.gov/news.release/cpi.nr0.htm. Accessed Feb. 8, 2026.

¹³ John Butters. FactSet. Feb. 6, 2026. “Earnings Insight.” https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_020626.pdf. Accessed Feb. 8, 2026.

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