As we advance through February 2026, markets are digesting a stronger-than-expected January employment report, continued cooling in labor demand metrics, and a notable rebound in software stocks after a bruising selloff tied to AI disruption concerns. This week’s Market Monitor highlights these key data releases alongside ongoing Trump administration policy moves. Equity markets showed resilience, with the Dow Jones hitting fresh records and technology shares recovering ground, while bond yields moved modestly higher on the jobs strength. Commodities, including oil, drew support from developments around Venezuelan energy opportunities.

Market Overview

U.S. equities advanced overall, led by a rebound in technology and software names that had faced intense selling pressure earlier in the month. Major indexes posted gains for the week, with the Dow Jones Industrial Average climbing above the 50,000 milestone and setting multiple record closes. The S&P 500 and Nasdaq showed more modest net performance but benefited from late-week strength in growth sectors. Fixed income markets saw Treasury yields edge higher amid the positive jobs surprise, which tempered near-term rate cut expectations. Oil prices held steady to firmer on signs of potential U.S. investment reopening in Venezuela.

Key Economic Releases

Labor market data this week presented a tale of two surveys and softening demand signals, yet the headline official report provided reassurance after December’s weakness.

January 2026 Nonfarm Payrolls and Unemployment:  

Employers added 130,000 jobs, a clear beat versus consensus expectations around 55,000–80,000 and a notable improvement from December’s downwardly revised +48,000. The unemployment rate ticked down to 4.3% from 4.4%. Job gains were concentrated in health care, social assistance, and construction. This report, delayed by a brief government shutdown, was widely viewed as a blowout relative to subdued forecasts shaped by trade tensions, immigration policies, and prior softness. Average hourly earnings data and other details reinforced a still-functional labor market.¹

ADP January 2026 Jobs Report:

Private sector employment rose by only 22,000 jobs, well below expectations and signaling a lackluster month for private hiring outside standout sectors like education and health services.  This contrasted sharply with the official NFP print, giving us mixed signals for the labor market.

December 2025 Job Openings:

Job openings fell to 6.5 million, the lowest level in more than five years, down sharply from a revised 6.9 million in November. The data underscored a continued cooling in labor demand while hires and separations remained relatively balanced.³

Easing and Reversal of the Software Stocks Selloff:

Software and related technology stocks suffered a sharp selloff last week, with the sector shedding substantial market value amid fears that rapid AI advancements—highlighted by new tools from companies like Anthropic—could disrupt traditional software business models, licensing revenues, and incumbent players. Names across enterprise software, fintech, and adjacent services saw double-digit declines in some cases, contributing to a multi-trillion-dollar wipeout in broader market value at one point.⁴

By the end of last week, the selloff eased and began to reverse as investors reassessed the moves as potentially overdone. A broader market stabilization, combined with the resilient jobs data reinforcing economic growth prospects, helped trigger a rebound in software and tech shares. While concerns about AI-driven disruption persist, many strategists noted that core software offerings remain sticky and essential, creating selective opportunities in high-quality names. The sector’s recovery contributed meaningfully to late-week gains in the Nasdaq.⁵

Trump Administration Policy Developments

The administration continues its interventionist approach. On the energy front, the Treasury Department advanced measures to facilitate U.S. oil companies’ rehabilitation of existing assets in Venezuela, issuing a general license authorizing maintenance, refurbishment, and related transactions for oil and gas operations. This builds on January discussions and could support domestic energy firms while addressing global supply dynamics.⁶

Separately, questions linger around the proposed one-year 10% cap on credit card interest rates. With the original January 20 target date passed, banks continue to navigate uncertainty, exploring countermeasures while consumer advocates push for relief. These policies highlight a blend of sector-specific support and consumer-focused interventions that could reshape credit availability and energy markets.

Outlook

The January jobs beat, even against a softer ADP reading and declining openings, suggests the U.S. economy retains underlying resilience despite 2025’s subdued annual growth and external pressures. The software sector’s rebound, which happened in the same week as the selloff, underscores that while AI poses transformative risks, panic selling works against long term investment plans.   With inflation trends stable from prior readings and productivity gains still filtering through, the Federal Reserve is likely to remain data-dependent and patient on rate adjustments.  Many market prognosticators are pushing out estimates for 2026 rate cuts based on the surprise NFP beat.⁷

Our team continues to favor high-quality, diversified portfolios positioned, aligned with our clients’ financial goals to navigate policy uncertainties.  We will monitor upcoming inflation prints, earnings, and further policy clarity closely.

Best regards,  

Richard Barnett

Chief Investment Officer

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Footnotes:

1. Bloomberg News, U.S. Bureau of Labor Statistics, Employment Situation - January 2026, https://www.bls.gov/news.release/empsit.nr0.htm

2. ADP National Employment Report, January 2026, https://mediacenter.adp.com/2026-02-04-ADP-National-Employment-Report-Private-Sector-Employment-Increased-by-22,000-Jobs-in-January-Annual-Pay-was-Up-4-5

3. U.S. Bureau of Labor Statistics, Job Openings and Labor Turnover Survey - December 2025, https://www.bls.gov/news.release/jolts.nr0.htm  

4. Reuters, "US software stocks slammed on mounting fears over AI disruption, lose $1 trillion in week," February 5, 2026, https://www.reuters.com/business/us-software-stocks-stabilize-after-bruising-selloff-ai-disruption-fears-2026-02-05

5. Reuters, "AI disruption fears create buying chance in US software stocks, strategists say," February 10, 2026, https://www.reuters.com/business/ai-disruption-fears-create-buying-chance-us-software-stocks-strategists-say-2026-02-10

6. POLITICO, "Trump administration moves closer to opening Venezuela to more US oil producers," February 10, 2026, https://www.politico.com/news/2026/02/10/trump-open-venezuela-us-oil-00768970

7. Bloomberg News, US Adds 130,000 Jobs and Unemployment Falls After Tepid 2025, 2/11/26, https://www.bloomberg.com/news/articles/2026-02-11/us-payrolls-rise-130-000-unemployment-rate-unexpectedly-falls

Researched and compiled with the assistance of Grok.  This newsletter represents our opined general assessment of the market environment at a specific time and is not intended to be a forecast or guarantee of future performance or results. The opinions and statements expressed are intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities or investment strategies to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. This material may contain estimates and forward-looking statements, which may include forecasts and do not represent a guarantee of future performance. This information is not intended to be complete or exhaustive and no representations or warranties, either express or implied, are made regarding the accuracy or completeness of the information contained herein. The opinions expressed are as of February 11, 2026, and are subject to change without notice. Investing involves risks. Past performance is not a reliable indicator of current or future results, and index returns do not account for fees. It is not possible to invest directly in an index.  

Investment advisory and wealth management services are offered through Highline Wealth Partners, an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training and does not guarantee investment performance.

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