Market Update – February 17th, 2026

Sound Planning Group Team

Financial Markets

Stocks slipped last week as investors rotated out of risk-on, technology, and financial names and into more defensive sectors. The Nasdaq Composite led the decline, falling 2.1%, followed by the S&P 500, which dropped 1.39%, while the Dow Jones Industrial Average held up best, declining 1.23%.

Market News

Sector Disparities. Dispersion across sectors was significant during the week, with utilities (+7.27%), real estate (+3.6%), and materials (+3.49%) outperforming and posting strong weekly gains. In contrast, financials (-4.81%) declined the most, pressured in part by proposals to cap credit card interest rates, followed by other risk-on sectors including consumer discretionary (-1.53%) and technology (-1.11%). Whether this rotation continues or proves short lived remains to be seen, but the shift toward more defensive positioning was a notable development last week.

January Jobs Report. After a brief delay due to the partial federal government shutdown, January’s BLS employment report came in broadly better than expected, providing a positive surprise for markets last week. The U.S. added 130,000 jobs in the month, more than twice the expected 53,000. Job gains were concentrated in healthcare, social assistance, and construction, while federal government and financial services posted the largest declines.

The unemployment rate edged down to 4.3%, beating expectations for 4.4% and signaling continued stability in labor market conditions. Wage growth remained firm, with average hourly earnings rising 0.4% in January and up 3.7% from a year ago, extending the trend of real wage gains. A stronger than expected start to the year for the labor market suggests the central bank may have less urgency to cut interest rates in the coming months.

Source: Bureau of Labor Statistics

Weak Retail Sales. In contrast to the stronger than expected jobs report, December retail sales came in softer than expected, remaining flat for the month compared with forecasts of 0.4% growth. On an annual basis, retail sales increased 2.1%, a relatively subdued pace for the holiday season and a sign that some consumers may have pulled back on spending.

Weakness was broad-based, with auto sales declining 1.1% year over year, while food and beverage sales provided some support, rising 4.7% from a year ago. The report reflects a more subdued holiday spending season and suggests that consumers may be becoming more selective in their spending.

Source: U.S. Census Bureau

January CPI. January’s inflation reading came in slightly better than expected, with headline CPI at 2.4% year over year and core CPI at 2.5%. On a monthly basis, headline CPI rose 0.2% and core CPI increased 0.3%.

By category, groceries were up 2.1% from a year ago, while dining out rose 4%, reflecting continued demand for services and experiences, consistent with the robust restaurant spending seen in retail sales.

Energy overall was down 0.1% year over year, but this masks divergence within the sector, as energy commodities including gas and fuel fell 7.3%, while energy services such as electricity and gas utilities rose 7.2% annually. Part of the upward pressure on electricity costs reflects rising demand from AI and data centers, which require substantial energy. Lastly, shelter costs increased 3% from a year ago, as pricing gradually becomes more buyer and renter friendly.

Source: Bureau of Labor Statistics

Inflation appears to be moderating, which is encouraging, though risks remain. Some economists caution that assumptions made in the November CPI release during the government shutdown may have understated costs in certain categories, particularly shelter. In addition, rising energy demand from AI and data centers could continue to put upward pressure on electricity prices, underscoring the need to monitor inflation trends closely.

Existing Home Sales. Existing home sales were sluggish in January, with volumes declining 8.4% during the month and down 4.4% compared to January 2025. Inventory increased 3.4% year over year, bringing supply to 3.7 months’ worth, above last year’s 3.5 months. The median sales price rose 0.9% from a year ago to $396,800. Consistent with the recent moderation in shelter inflation, housing market conditions appear to be gradually shifting in favor of buyers.

Source: National Association of Realtors

Summary

Stocks declined last week as investors rotated out of risk-on sectors and into defensives, with utilities and real estate leading while financials and technology lagged. Economic data were mixed, as a stronger than expected jobs report contrasted with flat retail sales and softer consumer spending trends. Inflation showed further signs of moderation, though risks remain, particularly around rising electricity demand tied to AI and data centers. Housing activity remained subdued, with slowing price growth and increased inventory suggesting a gradual shift toward more buyer-friendly conditions.

In closing, we want to express our sincere gratitude to our valued readers and loyal customers for entrusting us with your financial well-being. Your continued support is the cornerstone of our success, and we are committed to serving you with the utmost dedication and professionalism. As we navigate the ever-changing financial landscape together, we encourage you to reach out to us if there have been any shifts in your risk tolerance or if you have experienced any material changes in your Investment Policy Statement objectives or constraints. Your financial goals are our top priority, and we are here to adapt and tailor our strategies to align with your evolving needs, whether they pertain to risk and return objectives or constraints such as time horizon, taxes, liquidity needs, legal issues, unique circumstances, or changes in your financial planning and retirement objectives. Your feedback and communication are essential in helping us ensure your financial success. Thank you once again for your trust and partnership with Synergy Asset Management. We look forward to continuing this journey together.

We appreciate your continued trust.

Joseph M. Maas, CFA, CFP®️, ChFC, CLU®️, MSFS, CVA, ABAR, CM&AA, CCIM

Chief Investment Officer, SPGA\

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