Market Update – February 9, 2026

Sound Planning Group Team

Financial Markets

Markets had a risk-off week as investors rotated out of technology and into more defensive sectors, with a partial recovery on Friday. Value stocks outperformed, led by a 2.5% gain in the Dow Jones Industrial Average, while the S&P 500 finished nearly flat at –0.10% and the Nasdaq Composite declined 1.84%.

Market News

ADP Jobs Report

With January’s BLS employment report delayed by a three-day partial federal shutdown, the ADP employment report provided a preliminary look at labor market conditions in January. Private employers added 22,000 jobs in January, reinforcing the trend of moderating employment growth.

By sector, education and health care stood out, adding 74,000 jobs in the month, while financial services added 14,000 and construction contributed 9,000. These gains were largely offset by job losses in professional and business services, which shed 57,000 jobs, alongside declines in other services and manufacturing.

Hiring was strongest among mid-sized firms with 50 to 499 employees, while small business employment was flat and large employers reduced headcount by 18,000 jobs. The report reflects a labor market that remains stable but continues to show limited momentum, with hiring activity failing to reaccelerate.

Source: ADP Research

Challenger Jobs Report. Another non-governmental labor market indicator, the Challenger Jobs Report, pointed to rising signs of economic strain early this year. U.S.-based employers announced 108,435 job cuts in January, an increase of 118% from the 49,795 cuts announced in the same month last year. Last month recorded the highest level of job cuts for a January since 2009, as well as the largest monthly total since October 2025.

Transportation led all industries with 31,243 announced cuts, largely driven by major layoff plans by UPS. Technology followed with 22,291 job cuts, most of which stemmed from Amazon’s decision to eliminate roughly 16,000 positions as part of a broader management restructuring.

Reported reasons for layoffs were led by contract losses accounting for 30,784 cuts, followed by market and economic conditions with 28,392 announced layoffs, while restructuring contributed 20,044 job cuts and store, unit, or department closings accounted for 12,738 planned layoffs. Artificial intelligence was cited in 7,624 job cuts, representing about 7% of total announcements. The report points to a more cautious start to the year for the labor market and could prompt the central bank to speed up its pace of rate cuts.

Source: Challenger, Gray, & Christmas

Tech Earnings. Google and Amazon posted mixed earnings results that weighed on risk-off sentiment last week. Google beat expectations on earnings and revenue but unsettled investors with plans to more than double capital spending in 2026 to support artificial intelligence. Amazon beat revenue estimates but missed on earnings and similarly surprised markets with a much higher than expected capex outlook.

Both stocks faced pressure during the week as investors questioned the scale of planned spending, alongside a broader market rotation out of technology and into defensive sectors.

ISM Manufacturing. Manufacturing conditions improved in January, with the ISM Manufacturing Index rising to a bullish 52.6, marking the first expansionary reading in 12 months. The improvement was driven by stronger new orders, production, imports, and exports. Employment conditions also edged higher but remained in contractionary territory, indicating labor demand in manufacturing continues to lag, as we saw in the ADP jobs report. Still, the month’s improvement provides an encouraging short-term signal for the sector.

ISM Services. The ISM Services Index remained strong in January, holding at 53.8%, unchanged from December. Growth was supported by robust business activity and new orders, though employment softened slightly and inventories contracted, turning bearish. Together with the ISM Manufacturing Index, the report supports a case for a more stable and moderate near-term economic outlook.

Consumer Sentiment. Consumer sentiment from the University of Michigan showed slight improvement in February, rising 1.6% month over month, but remaining 11.4% lower than a year ago. Sentiment increased sharply among consumers with the largest stock portfolios, while it stayed stagnant and at low levels for those without stock holdings.

On the positive side, year-ahead inflation expectations fell to 3.5% from 4.0% last month, the lowest reading since January 2025. Sentiment is now at its highest level since August 2025, though it remains well below pre-pandemic norms.

Source: University of Michigan

Summary

Stocks experienced a choppy week as investors rotated into risk-off sectors, pressured by mixed tech earnings and elevated capital spending plans from Google and Amazon. Labor market indicators were mixed, with below-average job growth in the ADP report and a rise in layoffs, but encouraging readings for ISM Manufacturing and Services and a slight improvement in consumer sentiment.

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, CCIM, CVA, ABAR, CM&AA

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