Market Memo

Alright so this week was basically the market trying to act fearless while lowkey spiraling. After the government shutdown delayed a bunch of data, everything hit at once and investors had to process it in real time, which is never calm. The Dow went full main character mode and surged 2.5 percent to close above 50,000 for the first time ever, which sounds insanely bullish, but at the same time the Nasdaq dropped 1.84 percent like it wanted no part of the celebration. That split tells you everything. The driver was this massive AI scare trade where about 1.2 trillion dollars rotated across sectors because people started realizing the next generation of agentic AI might not just boost productivity but straight up replace white collar roles. When tools like Claude Cowork and advanced plugins started being framed as full workflow replacements, not just assistants, the mood shifted fast. Wednesday was brutal with around 285 billion dollars wiped from software and service names as investors dumped legal services, wealth management, and logistics stocks after companies bragged that AI could handle a 400 percent jump in volume without hiring a single extra human. That anxiety lined up perfectly with a weak labor report showing private employers added just 22,000 jobs in January, less than half of expectations, while outplacement data hit its highest January level since 2009, so suddenly the narrative went from work from home to work with AI and maybe fewer workers. Real estate service firms like CBRE and JLL got smoked with double digit declines as investors started pricing in smaller office footprints. Friday’s cooler than expected 2.7 percent CPI gave cyclical stocks a quick buy the dip moment, but the week still ended with a prove it tone because that projected 650 billion dollars in AI infrastructure spending for 2026 is no longer just about growth, it is about whether that growth comes at the expense of the actual workforce.