February 11th Market Overview

Happy Wednesday

Jobs data came in super bullish, added 130,000 jobs vs. 55,000 expected. Market popped 300 points on the headline, then spent the rest of the day giving it back.

Healthcare hired almost everyone, strip that sector out and the Job market barely moved. Job news might be strong enough to kill rate cut hopes, weak enough to keep me cautious.

Let’s dig in...

Today's Big Picture

Healthcare Is Carrying
The economy added 130,000 jobs in January, more than double expectations. Healthcare alone accounted for 124,000 of those. Strip that out and the rest of the economy barely hired anyone. On top of that, 2025 total job growth was revised down from 584,000 to just 181,000. One industry is masking how weak everything else is.

The AI Divergence 
Investors are dumping software stocks on fears that AI replaces seat licenses and piling into the hardware names building the infrastructure. Salesforce $CRM and ServiceNow $NOW led losses again. IGV is now in a bear market. On the other side, Vertiv $VRT beat earnings and raised 2026 guidance. Money is leaving SaaS and flowing into physical buildout.

Rate Cuts Pushed To Summer At Best 
Polymarket odds now point to July for the first cut, not June. Wages came in hot and unemployment ticked lower, the Fed has no reason to move. Trump posted on Truth Social calling for lower rates, but the data doesn't support it.

Market Overview

Index Performance

Stock Spotlight

Vertiv $VRT ( ▲ 23.16% ) 
posted a fourth-quarter earnings beat and issued strong 2026 guidance. The AI data center buildout trade is still working.

AST SpaceMobile $ASTS ( ▲ 1.53% ) 
deployed its BlueBird 6 satellite with a 2,400 square foot antenna, the largest commercial communications array ever in low earth orbit.

Cloudflare $NET ( ▲ 6.17% ) 
got a reiterated Overweight from KeyBanc with a $300 price target. Net-new annual contract value grew nearly 50 in Q4, the highest growth rate since 2021.

Energy Fuels $UUUU ( ▲ 2.53% ) 
initiated at Buy by Goldman with a $30 target. They own the only U.S. facility that processes both uranium and rare earth elements.

Big Name Updates

Meta Platforms $META ( ▼ 0.26% ) 
attracted a major new investor. Bill Ackman's Pershing Square revealed a roughly $2 billion stake initiated in November at an average cost of $625 per share. His thesis is that Meta's business model is one of the clearest beneficiaries of AI integration.

Kraft Heinz $KHC ( ▲ 0.24% ) 
paused its plan to split the company. New CEO Steve Cahillane said the problems are "fixable and within our control." Berkshire Hathaway's Greg Abel publicly backed the decision.

Mattel $MAT ( ▼ 25.21% ) 
is headed for its worst trading day in over 26 years. Holiday sales came up short, forcing heavy discounting that crushed margins. JPMorgan downgraded to Underweight and cut the price target to $14.

Robinhood $HOOD ( ▼ 8.75% ) 
missed revenue estimates at $1.28 billion as the crypto slowdown continues to weigh on trading volumes. Piper Sandler called the dip "an attractive entry point" for long-term holders.

Shopify $SHOP ( ▼ 9.74% ) 
posted disappointing adjusted earnings and warned that AI investments will keep pressuring margins this quarter.

Other Notable Company News

Zillow $ZG ( ▼ 18.49% ) 
dropped hard despite revenue beating estimates. Adjusted earnings missed by a penny and housing stocks traded broadly lower.

Moderna $MRNA ( ▼ 3.37% ) 
fell after the FDA refused to even review its application for a new flu vaccine. The company requested an immediate meeting with the agency.

Humana $HUM ( ▼ 3.42% ) 
guided to at least $9 adjusted EPS for 2026. Wall Street wanted $11.91. Medicare enrollment grew faster than expected, and investors are worried about the cost of absorbing those new members.

Halliburton $HAL ( ▲ 2.75% ) 
rose after the U.S. issued a license allowing oilfield services work in Venezuela.

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Sector Watch

Bond Market

Yields moved higher after the jobs beat. The 2-year led the way as traders priced out near-term cuts. The 10-year climbed to 4.18.

• 30-year auction tomorrow, weak demand there could push mortgage rates higher

Policy Watch

Fed 
This report cements the Fed's hold. Average hourly earnings came in at 0.4 month-over-month, hotter than expected. I think March and April are off the table. July is the earliest realistic window.

Fiscal & Trade

• Tariff revenue hit $30 billion in January alone. Fiscal year-to-date total sits at $124 billion, more than triple the same period last year. A Supreme Court decision on tariff authority is pending.

• Bloomberg reports Trump is privately weighing an exit from USMCA. That would scramble North American supply chains overnight.

Immigration 
The new $100,000 H-1B visa fee is changing how Big Tech hires. Amazon, Google, and Microsoft plan to route workers through student visas and the Optional Practical Training program instead. Smaller companies don't have that option.

International 
ByteDance is building its own AI inference chip and is in talks with Samsung to manufacture it.

What to Watch

Oil Tanker Risks 
The U.S. is reportedly discussing seizing tankers carrying Iranian oil. Brent crude is near $70. Any confirmed action could push energy prices rapidly higher and complicate the inflation picture.

Software Sector Bottom 
IGV is in a bear market. At some point valuations will matter again, but catching this knife has been painful. The sector needs a counter-catalyst — maybe a major SaaS name showing AI is additive, not destructive.

Fed Speakers 
After this jobs print, every comment from Fed officials will get extra scrutiny. I'm watching for hawks to get louder this week.

Thanks for reading - you are now the more informed 🙂

- John

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