QuickTake: Market Insights, as of February 5, 2026

Markets move in a matter of minutes lately. We remind you that we will always stand by diversification and remaining invested. To help keep you informed, here are some key market insights as of February 5, 2026.

Market Developments & Investor Takeaways

  • Equity momentum remains intact, but leadership is shifting. January marked another strong month for equities, with positive momentum persisting despite rising volatility. However, leadership is clearly broadening beyond mega-cap growth, as value, small caps, and international markets increasingly drive returns.
  • Rotation away from concentrated large-cap growth is gaining traction. Markets are increasingly questioning AI-related capital spending and the durability of MAG-7 leadership. This has led to relative underperformance in large-cap growth and information technology, alongside improved performance in previously lagging, more attractively valued segments. Stay diversified, we’ve seen head fakes in the past.
  • Small caps are reasserting themselves. Year to date, the Russell 2000 continues to outperform the S&P 500, narrowing the performance gap over a one-year horizon and reinforcing the valuation-driven case for small-cap exposure.
  • International and emerging markets continue to outperform the U.S. Emerging markets posted over 8.5% gains in January, with one-year returns approaching 43%, as measured by the MSCI Emerging Markets index. A weaker U.S. dollar has provided an additional tailwind for non-U.S. assets.
  • Fixed income is delivering steady income but limited capital appreciation. While equities have provided more opportunity, fixed income has continued to “clip coupons,” with yields remaining attractive even as rate volatility has subsided.
  • Monetary policy uncertainty is feeding volatility across asset classes. The nomination of a new Fed Chair, ongoing rate cuts, and concerns around fiscal deficits are keeping long-end yields elevated. Markets still expect approximately two rate cuts this year, though policy expectations have proven unstable and frequently wrong. 
  • Volatility is resurfacing unevenly across markets. While equity volatility (VIX ~22) has risen, the most extreme moves have occurred in commodities and FX—particularly gold and silver—highlighting the importance of diversification and disciplined rebalancing.
  • Diversification remains critical late in the cycle. After several years of strong, concentrated returns, leadership dispersion argues for reducing reliance on any single asset class or factor, especially where correlations are beginning to rise.

Market observations as of 2/5/2025 and subject to change. Not to be used, or interpreted, as investment advice or recommendation. 

IMPORTANT INFORMATION

Definitions:

S&P 500 Index is a weighted index of common stocks of 500 leading companies in leading industries of the U.S. economy, capturing 75% coverage of U.S. equities. The index is capitalization weighted, thereby giving greater weight to companies with the largest market capitalizations.

Russell 1000® Growth Index measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. It is market-capitalization weighted.

A basis point (BPS) is a unit of measure used to indicate percentage changes in financial instruments. Basis points are typically expressed with the abbreviations "bp," "bps," or "bips." One basis point is equal to 1/100th of 1%, or 0.01%. In decimal form, one basis point appears as 0.0001 (0.01/100).

Information provided in this newsletter is general in nature, is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed are those of the author(s) as of the stated date of their contribution and any such views and opinions are subject to change at any time based on market, or other conditions, and are not intended to be a forecast of future events, a guarantee of future results or investment advice. Securities and sectors referenced should not be construed as a solicitation or recommendation, or be used as the sole basis for any investment decision.

All investments contain risk and may lose value. Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.

Past performance is not a guarantee of future results. Portfolio re-balancing and diversification do not guarantee a profit or protection against loss in a declining market.

No guarantee or representation is made that investment objectives and/or opinions stated will be achieved. The experience of each specific client or investor may vary.

Due to the subjective aspect of these analyses, the effective evolution of the economic variables and values of the financial markets could be significantly different from the projections, forecasts, anticipations and hypotheses, which are communicated in this material.

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GE-8762887.1 (02/2026) (Exp. 02/2030)