Market Report, 2026-02-12

Stocks experienced a rough day, with globallystock indices retreating. While the market started the day nearly flat, amediocre forecast from Cisco disturbed the market and sent many stocksdownward. Although its earnings and revenue beat forecasts, rising costs causedthe company to provide more conservative guidance. At the same time, the markethas also moved into a phase where investors have started to evaluate how AIcould hurt businesses, and fear of AI as an instrument is now sending stocksdown—unlike in prior years, when investors bought stocks because they believedAI could make those businesses more profitable.

The Dow Jones Industrial Average declined by 669points to 49,452. The NASDAQ sank 2.04% to 24,688. The S&P 500 declined by1.57% to 6,833. The small-cap index Russell fell by 2.01% to 2,616. Bitcoin andgold also declined significantly, with gold seeing more than a 3% drop for theday. The broad-based selloff indicates market-wide deleveraging.

Not all is lost. Traditionally safe assets haveposted strong gains today. The utility and consumer staples sectors postedmeaningful gains by the close, while U.S. Treasuries rallied. The 5-year,10-year, and 30-year U.S. Treasury yields declined by 8 basis points to 3.66%,4.1%, and 4.74%, respectively.

Economic data provided a shock on the headline,as existing home sales fell by 8.4%, the largest drop in nearly four years.However, the decline could largely be attributed to a severe winter storm inlate January, which may have delayed the closing of many contracts.

We will have a very important inflation readingtomorrow, which, combined with current and future labor market data, couldinform future interest rate policy.