It was a challenging week for U.S. stocks. Recent enthusiasm surrounding artificial intelligence (AI) shifted to concern, particularly for industries that investors believe could face disruption. That concern outweighed better-than-expected economic data on both jobs and inflation.
Last Week’s Market
- Dow: (1.12%)
- S&P 500: (0.97%)
- NASDAQ: (1.63%)
- Russell 2000: (0.55%)
- Foreign Equity: +1.68%
- Emerging Markets: +1.78%
As stocks experienced volatility, bonds benefited. The yield on the 10-year U.S. Treasury declined to 4.048%, pushing bond prices modestly higher.
Year-to-date performance remains mixed. U.S. markets are uneven, while foreign stocks, emerging markets, and bonds are generally higher.
AI Speculation and Market Rotation
Recent speculation that AI could displace jobs in industries such as financial services, insurance brokerages, office REITs, trucking logistics, and others pressured stocks in those sectors.
We are also seeing a notable shift in leadership. Growth stocks, particularly the “Mag 7”, have moved into negative territory for the year, while value stocks are firmly in positive territory. This rotation reinforces the importance of diversification across investment styles.
Economic Data Update
Employment Data
January job creation totaled 130,000, surpassing expectations. Gains were strongest in healthcare, social assistance, and construction.
Inflation Data
The Consumer Price Index (CPI) came in slightly below expectations, with an annual reading of 2.4%. Excluding food and energy, core CPI registered 2.5%.
Part of the moderation reflects the rolling nature of inflation data: as each new month is added, a month from 12 months prior drops off the calculation.
That said, the treatment of healthcare and housing costs within inflation data remains worth monitoring, as these components can significantly influence headline readings in ways that may not fully reflect consumers’ real-world experience.
U.S. Bond Demand
There has been ongoing concern about the willingness of global buyers to purchase new U.S. debt.
Last week, $125 billion in U.S. Treasuries (3-, 10-, and 30-year maturities) were auctioned. The 30-year bond saw its strongest demand in eight years. Strong demand pushed yields lower across maturities and supported bond prices.
This is an encouraging sign for fixed income markets.
The Benefit of Balanced Portfolios
Balanced portfolios are once again demonstrating their value.
A properly diversified allocation may include U.S. growth stocks, U.S. value stocks, foreign and emerging market stocks, and bonds — with adjustments tailored to your specific goals.
For soon-to-be and current retirees, a balanced portfolio aligned with income needs can help reduce overall volatility. This becomes especially important when you rely on portfolio distributions to support retirement income.
Diversification does not eliminate risk, but it can help manage it.
The Week Ahead
It will be a shortened trading week. Key economic reports include:
• Friday’s Personal Consumption Expenditures (PCE) Index — the Federal Reserve’s preferred inflation measure
• The first of three readings for 4th Quarter U.S. Gross Domestic Product (GDP)
With interest rates having recently declined, I also anticipate a potential uptick in new and refinance mortgage applications.
Tax Update for Retirees
As tax season progresses, many taxpayers will begin receiving refunds — which are expected to be modestly higher than last year.
For those age 65 or older:
• Married filing jointly: An additional $12,000 standard deduction is available for adjusted gross income under $150,000 (phased out at $250,000).
• Single filers: An additional $6,000 deduction applies for adjusted gross income under $75,000 (phased out at $175,000).
This provision is temporary and applies to tax years 2025 through 2028.
If you have questions about how this may impact your retirement income plan, please reach out.
Don’t forget to check out our 2026 Key Financial Data guide linked here and always available on our site, where you will find the year’s important numbers such as federal tax bracket ranges, income ranges for common credits, retirement plan contribution limits, Social Security and Medicare figures, and more, especially important as you prepare your tax return or plan for the months ahead.
Please feel free to share the Weekly Retirement Report with friends, family, and colleagues.
Thank you for reading.
Paul Levin, Retirement Refined
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
All market data sourced from The Wall Street Journal, February 13, 2026.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you suggest your specific tax issues with a qualified tax advisor.
