February 10, 2026

The Markets

Over the past month, we’ve seen five sharp stock market declines – and five rebounds, reported Charles Riley of Bloomberg. He pointed out that market declines often go hand-in-hand with a change in the economic outlook, but that’s not the case this time. The economy appears to be doing reasonably well.

The declines and recoveries reflect investor sentiment and uncertainty, reported Carmen Reinicke, Alexandra Semenova, Vildana Hajric, and Michael MacKenzie of Bloomberg. For example, investors are worried that:

• Artificial Intelligence (AI) will disrupt industries, altering stock valuations. AI has the potential to change the way companies operate. Last week, “a new AI automation tool… sparked a $285 billion rout in stocks across the software, financial services and asset management sectors… as investors raced to dump shares with even the slightest exposure,” reported Reinicke, Joe Easton, and Henry Ren of Bloomberg.

• Technology companies are overspending. AI companies have been spending enormous amounts of money on infrastructure hoping the investments will pay off in the future. Investors are concerned current spending will hurt future profits, reported Martin Baccardax of Barron’s. As a result, investors are becoming more selective about the technology stocks they choose.

Investors also have moved assets from the technology sector into other market sectors. “With unease around AI still unresolved, investors are looking elsewhere for value and finding it. Shares of companies with little direct tech exposure, from consumer staples to energy producers, are enjoying a rare moment in the sun. But it’s less a vote of no confidence in tech than a search for businesses that stand to benefit from a firmer economy,” reported John Authers and Richard Abbey of Bloomberg.

Last week, “Treasuries surged, driving yields down the most in months, as signs of weakness in the U.S. job market helped deepen the retreat from stocks, commodities and cryptocurrencies and boost wagers on Federal Reserve policy easing,” reported Elizabeth Stanton and Miles J. Herszenhorn of Bloomberg. The Standard & Poor’s 500 and Nasdaq Composite Indexes moved lower, while the blue-chip Dow Jones Industrial Average surpassed 50,000 for the first time.

Data as of 2/6/26	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor's 500 Index	-0.1%	1.3%	14.0%	19.0%	12.1%	14.1%
Dow Jones Global ex-U.S. Index	-0.1	5.8	30.1	13.9	5.3	7.4
10-year Treasury Note (yield only)	4.2	N/A	4.4	3.6	1.2	1.7
S&P GSCI Gold Index	4.95	14.71	73.1	38.4	22.1	15.3
Bloomberg Commodity Index	-2.3	7.5	13.1	3.4	7.1	4.6

The Data Tells a Different Story Than the People Do

Before you read any further, ask yourself these two questions:

1. How is the U.S. economy doing?
2. Why did you answer the way you did?

Economic data suggest the U.S. economy is doing reasonably well. At the end of January, the Federal Reserve reported, “Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated.”

What Do Americans Think About the Economy?

While data show the economy doing well, many Americans aren’t feeling it. In February, the University of Michigan’s Surveys of Consumers Director Joanne Hsu reported:

“While sentiment is currently the highest since August 2025, recent monthly increases have been small—well under the margin of error—and the overall level of sentiment remains very low from a historical perspective. Concerns about the erosion of personal finances from high prices and elevated risk of job loss continue to be widespread.”

Last Fall, Pew Research asked Americans how the economy was doing. Seventy-four percent thought the economy was in fair to poor condition because of inflation, tariffs, the cost of living, wealth inequality, the cost of food and groceries, low wages, and a lack of good-paying jobs.

In contrast, 26 percent of participants said the economy was in good or excellent condition. The group cited general economic growth or improvement, lower inflation, stock market performance, and low unemployment as reasons for its view.

Overall, participants’ top concerns were:

• The price of food and consumer goods: 65%
• The cost of housing: 61%
• The price of gas and energy: 45%
• Being unable to find a job: 42%
• The performance of the stock market: 19%

Economic Anxiety Is a Global Issue

Last week, Gallup reported that economic anxiety is a global issue. Its survey of people in 107 countries found the economy topped the list of national concerns. Twenty-three percent of the people Gallup surveyed said they were concerned about the standard of living, high prices, and low wages in their countries. Jon Clifton and Benedict Vigers of Gallup reported:

“Gross Domestic Product (GDP) — the value of goods and services produced in a specified period — is a standard metric that countries, and their leaders, use to assess their progress. However, annual GDP growth bears little relation to whether people identify the economy as their country's top challenge. Instead, there is a much stronger relationship between how people feel about their own household income and their perceptions of the economy as a national challenge.”

Weekly Focus – Think About It

“We don't see things as they are, we see them as we are.”

—Anonymous

Wishing you and your families well,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management

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