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Friday’s Bounce Caps a Volatile Trading Week as Major Indexes End Mixed
It was another mixed week for equity markets, as concerns around the disruptive potential of artificial intelligence and the risk of overinvestment in the technology weighed on several high-growth stocks that have led performance in recent years. Corporate earnings releases and ongoing geopolitical tensions also contributed to market volatility. Global equities, as measured by the MSCI ACWI, declined 0.13% for the week, while domestic large-cap stocks, measured by the S&P 500, slipped 0.09%. Small-cap stocks staged a rebound from the prior week, with the Russell 2000 rising more than 2% over the period.
U.S. Labor Market
The week’s economic calendar was dominated by labor market data that generally came in weaker than expected, reinforcing signs of cooling employment conditions. ADP reported private-sector job growth of just 22,000 in January, well below expectations and down from December, bringing total job creation for 2025 to 398,000, a sharp slowdown from 2024. Additional data showed job openings falling to their lowest level since September 2020, with layoffs increasing, while initial unemployment claims rose to 231,000, above consensus estimates, pointing to softening momentum across the labor market.
Fourth-Quarter Earnings Season Update
Fourth-quarter earnings season moved into the second half, with the information technology sector continuing to lead the market in earnings growth expectations, as fourth-quarter 2026 profits are projected to rise 30.4%, more than double the roughly 13.0% growth expected across the broader S&P 500, underscoring the sector’s outsized contribution to overall earnings momentum.
Large-Cap Value Stocks Continue Growth
One notable theme since the start of the year has been a rotation out of growth stocks and into more value-oriented areas of the market. U.S. large-cap value stocks have extended their year-to-date performance advantage over growth to more than 10%, signaling a shift away from the growth style’s dominance in recent years. For the week, the Russell 1000 Value index rose 2.2%, while its growth counterpart declined 2.0%.
Looking Ahead
For the week ahead, a partial U.S. government shutdown that ended on Tuesday led the U.S. Bureau of Labor Statistics to delay the release of its monthly jobs report, which is now scheduled for Wednesday, February 11. In addition, the Consumer Price Index inflation report was postponed to Friday, February 13, two days later than originally planned.
As Always
I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.
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