US markets were closed on Monday for Presidents’ Day after an unusually uneventful weekend on the newswires. Asian and European equities were quiet, but gold, silver and crypto all continued to skid lower and futures trading indicated a shaky open for Wall Street the next day.

The rotation out of certain tech sectors resumed on Tuesday morning and the indexes in general, but the NASDAQ in particular, stumbled out of the gate. Selected software, logistics and real estate names were still being viewed as potential longer term victims of AI and as such remained in Wall Street’s crosshairs at the opening bell.

A positive turnaround kicked in at lunchtime that saw the indexes eventually close unchanged on the day, but it was put down to dip-buyers and bottom-fishers swooping in rather than any real alleviation of the concerns that are at the root of the current price fragility. Meanwhile, European stocks reached more new all-time record highs, emphasizing the US stock market’s worst start to a year relative to other global stock markets since 1995.

We got a big economic data dump on Wednesday morning, showing that industrial production jumped by the most in almost a year, that housing starts hit a five-month high and that durable goods orders declined in line with expectations.

The minutes from the Fed’s most recent rate-setting meeting revealed that most committee members appear to have little appetite for cutting the Fed Funds Rate again any time soon, believing that downside risks to employment have moderated while the threat of persistent inflation remains, particularly following confirmation from the Federal Reserve Bank of New York of multiple reports showing that American consumers and businesses are bearing 90%+ of all tariff costs.

The bargain-hunting continued with some disproportionate buying of the most recently-damaged names with a sense that the tech punishment meted out by traders recently may have been overdone. The stock indexes finished moderately higher.

The US trade deficit has now ballooned to its widest level since the 1960s as data released on Thursday morning showed that exports fell hard and imports rocketed, pushing back hard against the happy-clappy narrative being pushed by the administration. Increased geopolitical concerns in and around Iran also dampened enthusiasm by spiking oil prices again and the indexes took a dive.

We learned from pre-market releases on Friday that PCE annual inflation in December rose to 2.9% and that the latest (shutdown-impacted) Q4 GDP growth estimate crashed from 4.4% to 1.4%.

But the big news came at 10am ET when the Supreme Court struck down and overturned most of Trump’s tariffs (all of those under the IEEPA statute) by ruling that he broke the law when he imposed them, opening the door to utter chaos as companies and countries seek to swiftly drain the US Treasury of up to $170 billion in refunds for illegally-charged tariffs and international trade deals were immediately invalidated.

A scorned Trump went completely off the rails, slamming Supreme Court justices as "fools and lapdogs" who had been influenced by foreign “slimeballs” and lashed out by instantly imposing a new snap 10% (non-IEEPA) tariff on the entire world, which he later raised to 15%.

Amazingly, stock prices barely responded, moving somewhat higher on the rather dubious idea that this was some kind of tariff reprieve while seemingly not showing much concern about the sheer mayhem that could be generated by the ruling and the notoriously thin-skinned and impulsive president's highly unpredictable potential responses, particularly right before a State Of The Union speech on Tuesday (where, interestingly, protocol dictates a handshake between Trump and all the Supreme Court justices!) and with the US military poised to strike Iran on his say-so.

The stock indexes closed in the green for the week but this upcoming five days has firestorm potential, including Nvidia’s earnings on Wednesday.

Some other things I’m thinking about ..

* Holding an index long term using an ETF or mutual fund is not as static an investment as you might think. Since 1985, 365 companies have lost their place in the S&P 500 and been replaced, an almost 75% turnover averaging about 9 ejections per year. This self-adjustment benefits long term investors over extended periods of time by adapting their holdings according to what is happening in the economy without a need for them to guesstimate when to make sell and buy decisions. Holding an individual stock is a completely static investment that involves market amateurs needing to play the fool’s game of making the kind of timing judgments that even highly-paid full-time market professionals routinely fail at.

* Alphabet/Google, Microsoft, Amazon and Meta have now lost a combined $1 trillion in value since their latest quarterly earnings releases. Wall Street is showing signs of falling out of love with some of the names that have worked so well for years as rising spending fuels fears that these companies are building too much, too fast. This doesn’t mean that the three-year old bull market in stocks is over or that the tech sector is suddenly a bad investment, but it does mean we should anticipate likely heightened volatility.

I was recently interviewed by Vetta-Fi who host the annual Exchange ETF conference in Las Vegas about my practice. You can read the interview here.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

“Replacing facts with noise is an awful way to manage your money.” Ritholtz’s Tony Isola urges us not to mistake discomfort for danger.

.. AND I QUOTE ..

“It’s no longer the case that the company that spends the most on AI infrastructure wins”

Tom Essaye, founder and president, Sevens Report

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Communication Services (two biggest holdings: Alphabet/Google, Meta) ⬆︎ 1.9% for the week

Last week’s worst performing US sector: Consumer Defensive (two biggest holdings: Walmart, Costco) ⬇︎ 1.8% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.1% last week, is up 1.1% so far this year and ended the week 1.2% below its all-time record closing high (01/27/2026).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 0.6% last week, is up 7.5% so far this year and ended the week 2.6% below its all-time record closing high (01/22/2026).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 1.2% last week, is up 10.5% so far this year and ended the week at its all-time record closing high.

INTEREST RATES:

* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)

* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)

* 3 MONTH TREASURY ⬆︎ 3.69% (3.68% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.48% (3.40% ...