Key Events: Strong growth but weak labor markets
Recent indicators offered a more nuanced view of the U.S. economy, with signs of a cooling labor market contrasted against stronger‑than‑expected global economic data.
At the same time, technology markets were unsettled by Anthropic’s latest product enhancements, which heightened investor concerns about AI’s potential impact on employment and broader sector stability.
Market Review: SMID strength offsets tech weakness
Mid and Small Cap markets continued their surge; small caps are now ahead of the S&P 500 for the trailing 1-year period. The SMID gains offset a 4.7% decline in the Mag 7 and gave another indication that the broadening of market performance, which we have discussed for several months, is taking hold. International stocks took a slight breather but remain significantly ahead of the S&P over the last year.1
Outlook: Highlighting market risks and opportunities
It was an eventful week for markets, highlighted by a sharp selloff in technology shares. The chart below highlights how closely software stocks have moved in tandem with Bitcoin—one of the most volatile assets in the world, highlighting how broad risk-off sentiment has dominated. The software index fell 9.9% and Bitcoin dropped 24% through Thursday before both rebounded on Friday with gains of 2.4% and 10%, respectively. Why share this?
First, elevated valuations make sharp pullbacks more likely. That doesn’t mean now is the time to sell—it means that a month ago diversification was essential, just as it is today.
Second, markets often overreact in the short term. On Thursday, the CNN Fear & Greed Index slid deep into “Fear” territory at 32 (on a 0–100 scale) before bouncing back to a neutral 45 on Friday.2
Long‑term success requires resisting those short‑term emotional swings. A clear plan and a diversified portfolio allow you to use volatility to your advantage instead of being a victim of it. That’s the real lesson from this week. As for opportunities, they’re plentiful: Small- and mid‑cap U.S. equities, international and emerging‑market stocks, bonds, alternatives, and private markets all offer compelling long‑term potential. Stay disciplined, consult your advisor, and continue to execute your plan.
Software stock sentiment has mirrored that of the Bitcoin, and speculative assets have taken a sharp turn lower in 2026
OneAscent Navigator Outlook: February 2026
This material is intended to be educational in nature , and not as a recommendation of any particular strategy, approach, product or concept for any particular advisor or client. These materials are not intended as any form of substitute for individualized investment advice. The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisors. OneAscent can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.
Source: Bloomberg
Source: CNN Fear & Greed Index
Market Returns reference the following indices: Large Cap – S&P 500, Mid Cap Growth – Russell Midcap growth, Mid Cap Value – Russell Midcap Value, Small Cap – Russell 2000, Developed – MSCI EAFE, Emerging – MSCI Emerging Markets, Aggregate – Bloomberg US Aggregate, High Yield – Bloomberg High Yield
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