February 13th Market Overview

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Happy Friday

Choppy, sloppy market. Gap ups into midday fades all week. It's honestly annoying but that's why time in the markets beats timing the markets most of the time (I love saying that).

AI fear has spread into sectors people didn't see coming. Trucking, real estate, financials, gaming, media.

P.S. 9fin gives a a faster, clearer view of the debt markets. I love their platform and use it everyday to help write this overview.

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Today's Big Picture

AI Fear Goes Contagion
The AI selloff broke out of software this week and hit sectors nobody expected. Trucking, commercial real estate, financials, media, gaming. A former karaoke company called Algorhythm Holdings wiped $17.4 billion from the Dow Transports with one press release about AI freight optimization. The list of so-called AI losers is growing daily and the market is punishing them all indiscriminately.

The AI Capex Disconnect 
While the market sells anything AI might disrupt, the companies building AI infrastructure are posting blowout numbers. Applied Materials $AMAT beat on revenue and guided Q2 at $7.65B vs the street's $7.02B estimate. Semi equipment demand for 2026 is growing north of 20. The fear is real but the money flowing into AI buildout hasn't flinched.

Inflation is down But Markets Shrug 
January CPI came in at 2.4 annual, below the 2.5 estimate. Cheaper gas and used cars did the work. The 10-year yield fell to its lowest since early December. Welcome news for presumptive Fed Chair Kevin Warsh, but the market barely reacted. AI disruption fears are running the show right now, not inflation.

Market Overview

Index Performance

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Stock Spotlight

Applied Materials $AMAT ( ▲ 8.1% ) 
beat on revenue and earnings then raised Q2 guidance well above consensus. Gross margins expanding as AI chip demand drives higher-value orders.

Pinterest $PINS ( ▼ 16.91% ) 
missed revenue and guided lower. CEO blamed tariff-driven ad pullbacks from big retailers, but the real problem is Google and OpenAI eating their ad budgets.

Rivian $RIVN ( ▲ 29.57% ) 
posted a smaller loss than expected and guided 62,000 to 67,000 deliveries for 2026, roughly half higher than 2025. Software revenue more than doubled.

Coinbase $COIN ( ▲ 16.44% ) 
swung to a loss on an unrealized $700M+ crypto portfolio hit. But 2025 trading volume hit $5.2 trillion and subscription revenue grew to $2.8B. Citizens sees the pullback as healthy.

Big Name Updates

Amazon $AMZN ( ▼ 0.55% ) 
is in bear market territory. Down more than 20 from its November high of $258.60 on the earnings miss plus broad tech rotation.

DraftKings $DKNG ( ▼ 13.83% ) 
beat on Q4 revenue and earnings but the 2026 guide killed it. Expected $6.5-6.9B vs the street at $7.31B. That gap is too wide.

Caterpillar $CAT ( ▲ 2.03% ) quietly became the Dow's biggest contributor, up more than 30 since year-end. AI infrastructure needs heavy machinery and mining equipment. Most people aren't thinking about that yet.

Nvidia $NVDA ( ▼ 2.66% ) 
leasing a data center funded by $3.8 billion in junk bonds per Bloomberg. The buildout pace looks reckless but the orders keep coming.

Other Notable Company News

Maplebear $CART ( ▲ 6.17% ) 
(Instacart) had its best day in months after guiding Q1 transaction value well above estimates.

Moderna $MRNA ( ▲ 5.01% ) 
beat on revenue and narrowed its loss. Covid demand still fading but the quarter was better than feared.

CrowdStrike $CRWD ( ▲ 4.3% ) 
upgraded to buy by HSBC with a $446 target. Analyst sees AI-driven threat detection as a durable edge.

Dollar Tree $DLTR ( ▼ 1.88% ) 
downgraded to underperform by BMO. Stock is up 73 in a year but the analyst sees no digital strategy and expectations the company can't meet.

Sector Watch

Bond Market

Yields dropped across the board after the soft CPI print. The 10-year hit 4.053, lowest intraday since early December. The 2-year fell to 3.41.

• Next week brings the Fed's preferred inflation gauge (PCE) on Friday alongside Q4 GDP

Policy Watch

Reports suggest the White House may narrow steel and aluminum tariffs.

Nucor $NUE, Steel Dynamics $STLD, and Cleveland-Cliffs $CLF all fell on the news.

Worth noting: despite existing 50 tariffs, Chinese steel exports in January were still up 16 year-over-year per Morgan Stanley. The tariffs aren't working the way they're supposed to.

The US and Taiwan signed a trade deal cutting most Taiwanese export tariffs to 15. In return, Taiwan removes 99 of its barriers on US goods and commits to $84B+ in purchases.

• Taiwan hiked its 2026 growth forecast to 7.71 from 3.54 on the AI export boom

• January exports up 69.9 year-over-year, fastest in 16 years

• Trump paused China tech bans ahead of a summit with Xi

International

Trump said he'll talk to Iran "as long as I like" and suggested a deal could happen within a month. Separately, Energy Secretary Chris Wright confirmed Venezuela oil sales revenue tops $1 billion. Funds now flow directly to the US Treasury instead of through a Qatar account.

Domestic

Another shutdown could loom if Congress can't reach an immigration deal. Today's CPI was already delayed by the last one.

• Three Supreme Court opinion days set for Feb 20, 24, and 25

• A tariff ruling could come any of those days

• Trump's State of the Union is Feb 24

What to Watch

Walmart Earnings (Thursday) 
The ultimate consumer health check. Beef inflation running above 10, tariff pressures weighing on retail margins. Guidance matters more than the backward-looking quarter.

Fed Minutes (Wednesday) 
Minutes from the Jan 27-28 meeting drop at 2pm ET. Markets want to see how much weight the Fed put on tariff-driven inflation vs labor market softening.

Supreme Court Tariff Ruling
Three opinion days over five days. A decision could reshape trade policy overnight. Or we wait until summer. Nobody knows.

Thanks for reading - you are now the more informed 🙂

- John