THE WEEK ON WALL STREET
Stocks fell last week as investors reacted to mixed economic data and concerns over signs of broadening AI disruption of business models. The S&P 500 Index fell 1.39 percent, while the Nasdaq Composite Index declined 2.10 percent. The Dow Jones Industrial Average slid 1.23 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.92 percent.
FACT OF THE WEEK
On February 17, 1958, Pope Pius XII proclaims 12th-century Saint Clare of Assisi the patron saint of television.
MARKET MINUTE
AI Disruption Fears
Big tech started last week back in the driver’s seat, leading the Nasdaq and S&P 500 to modest gains as investors appeared cautiously optimistic about the economy and Q4 corporate reports.
Stocks slid modestly on Tuesday after December retail sales were flat, sparking some anxiety about the economy. Investors also fretted about the impact of artificial intelligence (AI) on financial stocks.
A stronger-than-expected jobs report initially sparked a rally midweek, but momentum quickly faded as investors dug deeper into the numbers.
Stocks then came under pressure as AI disruption fears spread across several industry groups. Traders worried that AI would disrupt certain business models and possibly increase unemployment.
Markets rebounded following Friday’s Consumer Price Index (CPI) reading, which gave investors another economic data point to cheer as the pace of inflation slowed in January.
Good News, Bad News
Investors focused on three key economic reports out last week: retail sales, jobs, and inflation. Here are the key good news/bad news takeaways from each report:
Retail sales: Consumer spending was flat in December, below expectations and below November’s 0.6 percent growth. Good news: Given that two-thirds of the economy runs on consumer spending, the Fed may reconsider its wait-and-see stance on raising rates.
Employment: January job growth was mostly concentrated in a single sector. Plus, downward revisions showed employers only added 181,000 jobs last year—70 percent fewer than initially thought. There was essentially no job growth in the back half of 2025. Good news: January job growth was more than double what economists expected—the biggest gain in over a year. The unemployment rate also edged down.
Inflation: Inflation was cooler-than-expected but remains above the Fed’s target. Good news: The CPI’s 2.4 percent year-over-year growth in January marked a drop from December’s 2.7 percent annual pace.
FINANCIAL STRATEGY OF THE WEEK
Protecting Your Home Against Flood Loss
The financial loss that comes with flooding can be devastating. The average flood claim payout from the National Flood Insurance Program is over $66,000. Yet, many Americans are not protected against flood damages, primarily because flooding is not covered under a standard homeowners policy.
Low vs. High Risk
Even if you are in a moderate-to-low-risk area—homes not residing within mapped high-risk flood plains—you could suffer flooding at some point. In fact, moderate-to-low-risk areas account for more than 25% of all National Flood Insurance Program insurance claims.
To protect yourself from the financial risks of flooding, you can consider purchasing insurance through the National Flood Insurance Program, which you can obtain through a local insurance agent. However, to be eligible, you will need to live in a community that participates in the program.
Coverage Choices
If you live in a moderate-to-low-risk area, you may qualify for coverage at a preferred rate, with building and contents coverage for one low price.
If you live in a high-risk area, the National Flood Insurance Program offers separate coverage for buildings and contents.
The cost of flood insurance depends on a number of factors, including the age of your home, the number of floors, the location of contents, and other considerations. You should consider the amount of your deductible and level of coverage before purchasing a flood insurance policy.