S&P 500 Falls as Market Fortunes Turn Away from AI Tech Firms

Despite ongoing carnage affecting companies with exposure to AI technology development costs, the S&P 500 (Index: SPX) managed to eke out a small gain in the trading week ending on Friday, 13 February 2026. The index closed out the week at 6,836.17, down 96.13 points or 1.39% from the preceding week.

But the market wasn’t down evenly among all stocks. Stocks for firms either making big investments in building out their AI-technology infrastructure saw big declines, joined by firms either financing them or at risk of having their businesses disrupted by the implementation of AI technologies.

Meanwhile, firms without that kind of exposure gained, as investors rotated their holdings into small cap and value stocks. If it weren’t for that rotation, the index would have fallen further.

Together, these factors put the trajectory of the S&P 500 at the lower end of the range it would be expected to be for investors focusing on the upcoming future quarter of 2026-Q2. The latest update of the alternative futures chart shows the effect of investors moving away from the big cap tech stocks that have dominated the S&P 500 in the last few years.

The market moving headlines capture some of the rolling whackage, to coin a phrase, afflicting the stocks of companies with high AI exposure risks.

Monday, 9 February 2026

• Signs and portents for the U.S. economy:

• White House sets lower job growth expectations; Fed grapples with same issue
• Oil settles up more than 1% after US urges caution for vessels near Iran

Fed minions not worrying about dollar, U.S. Treasury Secretary not worrying about Fed’s balance sheet:

• Fed’s Miran says weaker dollar not affecting monetary policy choices

• Fed’s Miran says data suggests Americans aren’t shouldering tariff hit

US Treasury’s Bessent says Fed will take its time on balance sheet moves

Bigger stimulus developing in China:

• China’s stock exchanges introduce measures to facilitate refinancing for listed companies
• China’s January bank lending seen up on predictable monetary policies: Reuters poll

• China urges banks to curb US Treasuries exposure, Bloomberg News reports

Growth signs developing in Japan:

• Japan markets set for renewed ‘Takaichi trade’ after landslide election win
• Yen strengthens against U.S. dollar after Japanese election

ECB minions sees potential growth opportunity for themselves:

• Europe must prepare for greater global safe haven role, ECB’s Kocher says

Wall Street advances as tech bounces further off of recent losses

• Nasdaq outpaces S&P 500 on AI and software rebound
• Gold reclaims $5,000 as China’s central bank extends gold-buying spree for 15th month

Tuesday, 10 February 2026

• Signs and portents for the U.S. economy:

• Oil prices steady as Iran-US tensions and US data eyed
• Bond Market Faces Historic Shock As Mag 7 Giants Turn Cash Flow Negative To Fund Capex Tsunami
• US import prices unchanged year-on-year in December
• US labor costs growth cools in fourth quarter
• Is the US in a hiring recession?

Fed minions shrug off job hiring data, think their monetary policies are perfectly set:

• Fed’s Logan: ‘cautiously optimistic’ that current rate-setting will do the job
• Fed’s Hammack says interest rates could be on hold ‘for quite some time’

Bigger trouble, stimulus developing in China:

• China tightens market oversight to create ‘slow bull’ momentum

Stronger yen developing in Japan after elections:

• Yen extends gains after Takaichi election victory, US data in focus

ECB minions worried about tariff inflation in Eurozone, bigger trouble developing in the Eurozone:

• Euro zone inflation to take hit from tariffs but rate cuts could offset, ECB economists find
• German auto industry in ‘crisis’ as investments, jobs move abroad, lobby says

S&P 500, Nasdaq end lower after the latest retail sales data

• S&P 500, Nasdaq dip with economic data, earnings in focus

• US brokerages fall as AI-driven rout extends to financials
• Insurance Brokers Extend Monday’s Plunge On Fears AI Is Coming For Them Next

Wednesday, 11 February 2026

• Signs and portents for the U.S. economy:

• US job growth accelerates, unemployment rate falls to 4.3%

• US employment growth through March revised down by 862,000 jobs
• US job growth surges in January, but labor market far from turning around
• What the U.S. nonfarm payrolls shocker says about the economy

Oil rises 2% on US–Iran tensions, improved demand

Fed minions expected to hold interest rates steady for now, to finally get around to dealing with troubled banks, not sure productivity will improve enough to lower inflation from the level they haven’t admitted they’ve been targeting:

• Fed’s interest rate pause bolstered by jobs data, but concerns linger
• US Fed to review previously flagged bank shortcomings, memo says
• Fed’s Schmid says too soon to expect productivity to fix still-elevated inflation

Bigger trouble, less deflation developing in China:

• China’s auto sales fall at fastest pace in nearly two years in January
• China makes small dent in deflation battle as supply-demand imbalance persists

BOJ minions laying out their plans for interest rate hikes and inflation slows and yen strengthens:

• BOJ could hike rates as early as March, up to 3 times in 2026, Mizuho executive says
• Japan’s wholesale inflation slows, weak yen pressures import costs
• Yen pushes towards best week in a year on ‘Buy Japan’ talk

Bigger trouble developing in the Eurozone:

• Where Chinese automakers have gained the most ground in Europe

• EU tariffs on imports of China-made EVs

Wall Street ends muted after strong jobs data nibbles at Fed rate cut bet

• U.S. stocks end in the red as nonfarm payrolls shock wanes
• Gold trims gains as strong U.S. jobs data dampens rate cut bets
• Real Estate Stocks Crash In Latest “AI Scare Trade”

Thursday, 12 February 2026

• Signs and portents for the U.S. economy:

• Oil prices edge lower as IEA reduces demand forecast
• A year on from DeepSeek shock, get set for flurry of low-cost Chinese AI models
• US existing home sales drop to more than two-year low in January
• Trump revokes basis of US climate regulation, ends vehicle emission standards

• What the EPA’s flip on climate change means for automakers

Fed minions expected to deliver rate cuts in mid-year:

• Wall Street brokerages pencil Fed rate cuts in mid 2026

China fighting deflation, dealing with trade restrictions and crop shortfalls:

• China targets value-driven auto market with new pricing rules, safety standards
• Exclusive: US-China trade detente fuels mothballing of key China tech curbs
• Exclusive: China buyers snap up U.S. sorghum, Australian barley as domestic corn supply tightens

Bigger trouble developing in Japan:

• US tariffs, Chinese competition weigh on EU trade, data show

ECB minions gearing up to leave Eurozone interest rates unchanged for longer, ready to grow their bailout business:

• ECB to extend its longest interest rate pause since below zero days
• ECB to broaden access to euro backstop, board member says

Nasdaq ended lower by 2% as Wall Street slid ahead of upcoming inflation data

• For stock market, AI turns from lifting all boats to sinking ships

• Logistics Stocks Crater As “AI Scare Trade” Crushes Sector, Slams Broader Market

Friday, 13 February 2026

• Signs and portents for the U.S. economy:

• Headline and core CPI inflation rates cool Y/Y in January

• US consumer prices rise less than expected

US, Taiwan finalise deal to cut tariffs, boost purchases of US goods

Oil prices stable as investors weigh OPEC+ supply, US inflation data

• Exclusive: OPEC+ leans towards resumption in oil output increases from April

Fed minions expected to cut U.S. interest rates in June 2026 after favorable inflation data:

• US rate futures raise odds of Fed easing in June after inflation data

• Fed policy is tighter than thought, inflation not a problem, Miran says

Bigger trouble developing in China:

• China January new loans jump but miss forecasts as weak demand persists
• China’s new home prices extend decline as weak demand hounds sector
• China’s supercharged gold trading looks like ‘speculative bubble,’ Capital Economics says

BOJ minions get better inflation data, still planning to hike Japan’s interest rates:

• Japan’s core inflation likely eased in January for 2nd straight month
• Hawkish Bank of Japan policymaker signals rate-hike chance ‘this spring’

ECB minions say Eurozone minions should have more power over financiers:

• EU body should oversee Europe’s biggest asset managers, ECB blog says

S&P 500 ends up slightly as tech dips, inflation cools

• Wall Street ended near even after the latest CPI report landed

The CME Group’s FedWatch Tool continued projecting the Fed will keep holding the Federal Funds Rate steady until 17 June (2026-Q2) when it gives an 87% probability of a quarter point rate cut. The tool also continues to anticipate the next quarter point reduction will take place on 16 September (2026-Q3). While these expectations have been stable over the past several weeks, what’s new this week is that there is now a greater than even probability of a third rate cut in the offing, coming on 9 December (2026-Q4), thanks to the lower-than-expected inflation reported for January 2026.

The Atlanta Fed’s GDPNow toolestimates real GDP growth in the U.S. during 2025-Q4 declined to $3.7% from the +4.2% growth expected in the prior week.

Image credit: Microsoft Copilot Designer. Prompt: “An editorial cartoon of a Wall Street bull and bear, both wearing suits, watching a roulette wheel come to a stop with the ball falling in a slot labeled ‘VALUE STOCKS’ as the bear says ‘It wasn’t going to keep landing on AI’”.