February 9, 2026

“A house divided against itself cannot stand.”

Abraham Lincoln

In honor of his birthday this week (February 12th), let us all remember we share much more in common than we don’t. Last week was a wild ride again, but as usual everything ended well. Here are the numbers. The S&P 500 finished the week up .28%, the Dow Jones Industrial Average was the big winner, up 2.74%, and the Nasdaq fell 1.45%. Internationally, the FTSE 100 was up 1.43% and the MSCI-EAFE gained.99%. The 2-year Treasury yield was 3.495%, and the 10-year paid 4.206%.

In our fun facts department….

Just a word on yesterday’s Super Bowl. The Super Bowl indicator suggests that a win by an NFC team signals a bullish, rising stock market for the year, while an AFC win predicts a bear market (declining market). This long-standing, largely coincidental, theory has historically held a high accuracy rate, although it is considered a fun, non-scientific, or spurious, market indicator. Here are some key findings on the Super Bowl Indicator. But first the theory. Historically, an NFC win predicts a positive, rising stock market for that year, while an AFC win predicts a decline.

So, does it play out? The historical accuracy from 1967 to 1997 suggests it does, the indicator boasted a 90% success rate, with a 70% accuracy rate over its full history. In recent trends, the indicator continues to spark debate, with recent years sometimes favoring the AFC (e.g., in 2024, the AFC’s Chiefs won, yet the market had a strong year). The actual performance differences are when the NFC wins historically the market follows with a 10.2% average annual gain for the S&P 500, compared to 8.1% for AFC victories. So, I guess after yesterday’s Seahawk win, we look for another good year. (For the record, the indicator is not a reliable financial tool; it is a “spurious correlation” that should not be used to guide investment decisions.

Moving on to the fireworks of last week which was highly volatile for U.S. stocks, featuring a multi-day tech-led sell-off followed by a dramatic rebound on Friday. The Dow Jones Industrial Average rallied 1200 points on the day, bursting through 50,000 for the first time ever. The milestone is particularly symbolic after a week in which tech stocks wobbled over AI fears and put the whole market at risk. Overall, the market showed signs of rotation away from some high-growth tech names toward more cyclical and value-oriented stocks. Heavy selling hit technology and software stocks earlier in the week, with some reports noting software names under significant pressure (e.g., concerns about AI disruption to legacy software businesses). Big Tech earnings and guidance played a role, including Amazon’s announcement of massive AI infrastructure spending (around $200 billion planned), which initially weighed on sentiment as investors worried about profitability and capex burdens. This contributed to risk-off moves, with the Nasdaq seeing multiple down days and Bitcoin dipping below $64,000 before recovering. Then last Friday, the markets staged a strong recovery, led by chipmakers and broader tech stabilization. Investors appeared to “buy the dip,” with renewed focus on AI infrastructure spending as a positive for certain hardware and semiconductor names. The Dow benefited from rotation into cyclical and economically sensitive stocks (less tech-heavy composition helped it outperform). Bitcoin bounced back above $70,000. The economic data and Fed patience on rates (steady policy with limited near-term cuts expected) added to the backdrop, though inflation readings (e.g., hotter PPI earlier) kept some caution alive. The week highlighted a potential shift toward value/cyclical stocks after prolonged tech dominance. Last week featured a packed U.S. economic calendar focused on business activity surveys, labor market indicators, and inflation signals.

Inflation? December PPI (released late January, but still fresh in discussions): Headline PPI rose to around 3.0% year-over-year (hotter than expected ~2.7%), with services driving gains. This reinforced persistent inflation pressures and contributed to caution around Fed rate-cut expectations. Markets reacted amid ongoing Fed policy discussions. Markets digested the prior week’s FOMC decision to hold rates steady (3.5–3.75% range) after earlier cuts. Officials emphasized patience amid resilient growth and inflation risks.

ISM Manufacturing PMI (released February 2–3): Showed continued monitoring of factory activity. Readings hovered around or slightly above contraction/expansion thresholds, reflecting mixed signals in industrial production amid global demand concerns. S&P Global / ISM Services PMI (mid-week): Services sector activity remained a bright spot, with composite PMIs indicating resilience in the broader economy despite manufacturing softness.

The labor market? ADP Employment Change (early February): Private-sector hiring data offered a preview of official jobs numbers. Figures were modest, signaling a cooling but still positive labor market. Additionally, January U.S. Nonfarm Payrolls report (originally scheduled for February 6) was delayed due to a partial government shutdown / funding issues and rescheduled to February 11. The expectations were for modest job growth (~70k), with the unemployment rate holding near 4.4% and average hourly earnings showing wage trends.

Overall, the week highlighted a tug-of-war: cooling labor momentum but sticky inflation and solid services activity. This backdrop contributed to market volatility, with dip-buying in stocks late-week and rotation away from some growth names. The rescheduled January jobs report (now February 11) and upcoming CPI (February 13) remain critical for shaping Fed expectations and market direction in the near term. Stay tuned!

Finally, the U.S. housing market and mortgage rates showed stability with minor fluctuations, remaining in a range near recent lows as the spring buying season approaches. Mortgage Rates benchmark 30-year fixed-rate mortgage stayed very stable, hovering right around 6% with only slight movements. Freddie Mac’s weekly Primary Mortgage Market Survey (for the week ending February 5, 2026) reported the average at 6.11%, up just 1 basis point (0.01%) from the prior week’s 6.10%. This remains near three-year lows and significantly below 6.89% from a year earlier.

The 15-year fixed-rate mortgage averaged 5.50%, also up slightly (1 basis point) from the previous week. Overall, rates remained in a narrow range (5.9–6.2% depending on the day and lender), showing little volatility. This stability follows the Federal Reserve’s decision to hold rates steady in late January, with ongoing expectations for rates to drift sideways or slightly lower through much of 2026 (forecasts from Fannie Mae and others point to around 6% on average). The broader housing market indicators reflected gradual improvement and a shift toward more balance (though no major weekly data releases occurred last week): Inventory continued to rise modestly year-over-year (up 10–20% in recent reports), giving buyers more options and reducing intense competition compared to prior years. Buyer demand showed signs of picking up as rates stabilized near these levels, with purchase applications trending higher in recent weeks. Home sales remained subdued but on a slow rebound path, with forecasts for 2026 projecting modest gains in existing-home sales (e.g., 2–4% increases per sources like Zillow and Realtor.com). No dramatic shifts in home prices or sales volume were reported for the specific week, but the market is seen as transitioning toward greater stability after years of volatility.

In summary, last week brought minimal change: mortgage rates held steady near 6%, offering predictability for buyers and refinancers, while the housing market continued its gradual thaw with slowly growing inventory and demand.

Looking ahead on what to expect out of the markets, More volatility may persist as earnings season continues and investors digest AI capex trends, economic data, and any policy signals. The Dow’s last week 50,000 milestone is symbolic, but the real story is the tug-of-war between AI-driven growth and concerns over its costs and disruptions.

Mike