Volatility in Tech Weighs on Indexes
Major U.S. equity indexes declined between 1% and 2% last week, marking the S&P 500’s fourth negative week in the past five. Mega-cap technology stocks remained under pressure, with the Magnificent 7 falling 2% and now down nearly 7% year to date.
Concerns around artificial intelligence disruption and evolving business models contributed to broad selling pressure across financial services, insurers, real estate, and logistics companies.
Despite this volatility, underlying economic indicators told a different story.
Labor Market Shows Resilience
January payroll growth reached 130,000 jobs, more than doubling economist forecasts and marking a clear acceleration from 2025’s monthly average of 30,000.
The unemployment rate improved to 4.3% from 4.4%, suggesting stabilization after months of gradual deterioration. Private sector hiring showed additional strength, averaging 100,000 over the past three months when excluding federal employment reductions.
These figures indicate a labor market that remains stable despite broader equity volatility.
Inflation Moderates Further
Inflation continued its gradual decline. January’s Consumer Price Index rose 2.4% year over year, down from 2.7% in December and the lowest reading since May 2025.
Shelter costs continued easing, contributing to the softer reading. The 10-year Treasury yield fell to 4.05%, reaching a year-to-date low.
Core inflation remained slightly elevated at 2.5%, and some tariff-related pressures appeared in goods categories. With fourth-quarter GDP results approaching and leadership changes at the Federal Reserve expected in June, policy direction will likely remain data driven.
International markets diverged sharply. Japan’s benchmark surged nearly 6% to a record high following election results that increased expectations of fiscal spending and tax relief.
Alphastar CIO Tony Parish noted:
“Economic data improve amid tech turbulence.”
Here are three key considerations for investors:
-
Economic Resilience Supports Stability
Stronger payroll growth and easing inflation suggest underlying fundamentals remain intact even as equity markets experience volatility.
-
Technology Volatility Highlights Concentration Risk
Weakness in mega-cap stocks illustrates how concentrated leadership can influence index performance. Diversification across sectors may help mitigate short-term swings.
-
Interest Rates Reflect Inflation Progress
The decline in the 10-year Treasury yield signals market recognition of moderating inflation. Continued data improvement could influence policy expectations later this year.
Final Thoughts
Recent market volatility has largely centered on technology stocks, yet broader economic signals remain constructive. Labor market stability and moderating inflation provide a foundation for measured policy decisions in the months ahead.
As Tony Parish shared:
“Economic data improve amid tech turbulence.”
READ THE FULL REPORT
Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of February 17, 2026. Please consult with a qualified financial professional for personalized advice.
Economic Data Improves Amid Tech Turbulence: Week of February 17, 2026
Volatility in Tech Weighs on Indexes
Major U.S. equity indexes declined between 1% and 2% last week, marking the S&P 500’s fourth negative week in the past five. Mega-cap technology stocks remained under pressure, with the Magnificent 7 falling 2% and now down nearly 7% year to date.
Concerns around artificial intelligence disruption and evolving business models contributed to broad selling pressure across financial services, insurers, real estate, and logistics companies.
Despite this volatility, underlying economic indicators told a different story.
Labor Market Shows Resilience
January payroll growth reached 130,000 jobs, more than doubling economist forecasts and marking a clear acceleration from 2025’s monthly average of 30,000.
The unemployment rate improved to 4.3% from 4.4%, suggesting stabilization after months of gradual deterioration. Private sector hiring showed additional strength, averaging 100,000 over the past three months when excluding federal employment reductions.
These figures indicate a labor market that remains stable despite broader equity volatility.
Inflation Moderates Further
Inflation continued its gradual decline. January’s Consumer Price Index rose 2.4% year over year, down from 2.7% in December and the lowest reading since May 2025.
Shelter costs continued easing, contributing to the softer reading. The 10-year Treasury yield fell to 4.05%, reaching a year-to-date low.
Core inflation remained slightly elevated at 2.5%, and some tariff-related pressures appeared in goods categories. With fourth-quarter GDP results approaching and leadership changes at the Federal Reserve expected in June, policy direction will likely remain data driven.
International markets diverged sharply. Japan’s benchmark surged nearly 6% to a record high following election results that increased expectations of fiscal spending and tax relief.
Alphastar CIO Tony Parish noted:
Here are three key considerations for investors:
Economic Resilience Supports Stability
Stronger payroll growth and easing inflation suggest underlying fundamentals remain intact even as equity markets experience volatility.
Technology Volatility Highlights Concentration Risk
Weakness in mega-cap stocks illustrates how concentrated leadership can influence index performance. Diversification across sectors may help mitigate short-term swings.
Interest Rates Reflect Inflation Progress
The decline in the 10-year Treasury yield signals market recognition of moderating inflation. Continued data improvement could influence policy expectations later this year.
Final Thoughts
Recent market volatility has largely centered on technology stocks, yet broader economic signals remain constructive. Labor market stability and moderating inflation provide a foundation for measured policy decisions in the months ahead.
As Tony Parish shared:
READ THE FULL REPORT
Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of February 17, 2026. Please consult with a qualified financial professional for personalized advice.