• The market finished a volatile first week of February 2026 with a historic milestone: the Dow Jones Industrial Average surged over 1,200 points on Friday to close above 50,000 for the first time. Despite this late-week rally, the broader market saw mixed results as investors navigated heavy rotation out of tech and concerns over AI spending.
  
  Weekly Performance Summary
  
  While the Dow snapped a three-week losing streak, the tech-heavy Nasdaq continued to struggle, marking its fourth consecutive weekly decline.
  
  Key Market Drivers
  
  The AI "Gut Check": Tech stocks faced a sharp mid-week rout after Amazon and Alphabet signaled aggressive increases in AI-related capital expenditures, totaling a more than 50% jump in spending. Nvidia recovered late in the week, soaring nearly 8% on Friday as traders bet it would be the primary beneficiary of this increased spending.
  
  Economic Signals: Labor market data showed signs of softening, with initial jobless claims rising to 231,000, a two-month high. Conversely, manufacturing activity hit its strongest growth since May 2022, and consumer sentiment improved to 57.3.
  
  The "Warsh" Factor: Early in the week, markets reacted to the nomination of Kevin Warsh as the next Federal Reserve Chair, which initially pushed Treasury yields higher and pressured rate-sensitive sectors like industrials and software.
  
  Sector Spotlight
  
  * Defensive and cyclical sectors led the way as investors rotated away from high-growth tech. * Top Gainers: Consumer Staples (+6%), Industrials (+4.7%), and Energy (+4.3%). * Top Losers: Consumer Discretionary (-4.6%) and Telecommunications (-4.4%).
  
  Individual Movers:
  
  Stellantis plummeted 25% following a business reset and a $26 billion charge, while Molina Healthcare fell 26% on a disappointing 2026 forecast.
  
  
• Final Words: Market indicates Greed. No New Buys
  
  Below is last week sector performance

  

  report.
  
  

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Currrent Shiller PE (see below) is showing overbought conditions as index is far above mean/media and our AryaFin engine is indicating caution. Have a good weekend.

The Buffett Indicator (aka, Buffett Index, or Buffett Ratio) is the ratio of the total United States stock market to GDP.