By Sabrina Escobar

Oh Snap. The Nasdaq Composite finally snapped its four-session losing streak today, even though AI jitters kept a lid on software stocks.

The Nasdaq gained 0.1% Tuesday. The Roundhill Magnificent Seven ETF rose 0.2%, helping offset the continuing slide in software stocks, which have been battered over fears that AI will displace their products.

The S&P 500 and Dow Jones Industrial Average also both rose 0.1%. All three indexes reversed losses from earlier in the day.

On the surface, markets have had a lackluster start to the year. The benchmark S&P is flat year to date, while the Dow has gained a modest 3% and the Nasdaq is down 2.9%.

But underlying trends suggest a "far more dynamic environment" ripe for stock-picking, writes Adam Turnquist, chief technical strategist for LPL Financial.

He adds:

Shifts in the AI narrative, rotations out of mega--cap tech, improving economic conditions, and accelerating inflows into active strategies are all driving performance gaps across sectors, with more value-tilted and economically sensitive sectors emerging as early 2026 winners. Against this backdrop, investors may benefit from active management, selective stock-picking, and sector--rotation strategies designed to capitalize on broader dispersion and the increased opportunities it presents.

And indeed, stocks have made big moves this year. About 34% of S&P 500 constituents gained or lost at least 20% in the past three months as of Tuesday, according to Dow Jones Market Data. Barron's' Jacob Sonenshine points out that while this isn't the highest percentage ever, it is above the 15% average for three-month periods dating back 20 years.

The big swings are largely because many industries are undergoing changes and thus altering their profit outlooks. AI is remaking tech; surging precious-metal prices have lifted mining stocks; and consumer staples are popular again after years of underperformance.

"The takeaway for now is that there are plenty of opportunities for big gains in a stock, and plenty of risk of big losses," Jacob writes.

The Hot Stock: Norwegian Cruise Line +12.2% The Biggest Loser: Genuine Parts Company -14.6%

Best Sector: Real Estate +1.0% Worst Sector: Consumer Staples -1.5%

Everything Old Is New Again. Even a Housing Crisis.

Punxsutawney Phil may have predicted six more weeks of winter ahead, but home buyers and sellers are already thinking about spring. Chiefly -- how will the housing market's busy season be affected by what one economist called a "new housing crisis?"

Fears of a weaker than expected spring season spiked after recently released data showed that sales of previously owned homes dropped to a slower-than-expected annualized pace of 3.91 million in January.

Lawrence Yun, chief economist of the National Association of Realtors, said the low number of sales was "continuing off this new housing crisis -- not the foreclosure housing crisis -- but the housing crisis of where people are unable to get into the housing market."

That said, the new crisis isn't all that new, writes my colleague, Shaina Mishkin. It's a continuation of the same sales slowdown that has stalled the market since 2023. Skyrocketing home prices and mortgage rates have made it harder for some buyers to wade into the market, and dissuaded homeowners who otherwise might sell from moving.

This means that buyers and sellers shouldn't read too deeply into January's data, Shaina writes. They should, however, be aware of the dynamics at play in their local housing markets.

"The market in which consumers buy and sell homes isn't national -- and trends look a lot different depending on location," she adds. For instance, home sales are trending higher in markets that are adding local jobs and continue to see domestic migration.

Read Shaina's full story here.

The Calendar

American Water Works, Analog Devices, Booking Holdings, Carvana, CF Industries, Charles River Laboratories International, CRH, DoorDash, eBay, Edison International, Garmin, Global Payments, Host Hotels & Resorts, Insulet, Invitation Homes, Molson Coors Beverage, Moody's, Nordson, Occidental Petroleum, Omnicom Group, Texas Pacific Land, and Verisk Analytics report quarterly results.

The Census Bureau releases the durable goods report for December, as well as new residential construction data for both November and December.

The Federal Open Market Committee releases the minutes from its late January monetary-policy meeting. At that meeting, the FOMC left the federal-funds rate unchanged at 3.5% -- 3.75%, with two Fed Governors dissenting in favor of a quarter-percentage point cut.

-- Dan Lam

What We're Reading Today

   -- ServiceNow CEO Is Buying $3 Million of Stock. There's 'No Better Entry 
      Point.' 
 
   -- Infleqtion Makes Its Trading Debut. Another Quantum Stock Is in the 
      Public Market. 
 
   -- Retail Earnings Will Show Execution Matters More Than Ever 
 
   -- The Pentagon Is Keeping a Close Eye on These Chinese Firms. Investors 
      Should Too. 
 
   -- Norwegian, TripAdvisor Get New Activists. Why Travel Stocks Are 
      Attractive Right Now. 

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(END) Dow Jones Newswires

February 17, 2026 17:12 ET (22:12 GMT)

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