This was the craziest week of 2026.

In five trading days, the entire narrative changed:

• Monday: Markets nervous about delayed jobs report
• Wednesday: Jobs “beat” (130K) but -898K revision erased all of 2025
• Thursday: Nasdaq crashed 2% on AI displacement fears
• Friday: Inflation cooled to 2.4%, markets shrugged

The result?

We got the soft landing everyone wanted — weak economy, cooling inflation, Fed can cut rates — and nobody cared because Wall Street just realized AI is going to destroy entire industries.

Let me walk you through what just happened.

Monday-Tuesday: The Calm Before The Storm

The jobs report got delayed due to the brief government shutdown. Markets traded sideways waiting for data.

Under the surface, something was building: Small caps had been quietly outperformingBig Tech for weeks. The Russell 2000 was up 3%+ year-to-date while the S&P was slightly negative.

Nobody was paying attention. Everyone was focused on the upcoming jobs and inflation reports.

Wednesday: We Found Out 2025 Was A Lie

The jobs report dropped. Headline looked decent:

130,000 jobs added in January (vs 55,000 expected)

Unemployment: 4.3% (down from 4.4%)

Markets initially rallied. Then traders read page 2.

The benchmark revision: The BLS revised away 898,000 jobs from 2025.

Turns out 2025 didn’t add 584,000 jobs. It added 181,000 total. That’s 15,000 per month — essentially flat. The economy added zero net jobs last year.

Even worse: Federal government employment down 327,000 since October— a 10.9% workforce cut in 4 months.

Markets barely moved. The S&P and Nasdaq finished slightly down. The Dow lost 66 points.

Why no reaction? Because everyone was waiting for Friday’s CPI.

Thursday: The AI Apocalypse

This was the day everything broke.

The Nasdaq didn’t crash because of earnings. It crashed because Wall Street realized AI doesn’t just help companies — it destroys them.

• Nasdaq: -2.03%
• S&P 500: -1.57%
• Dow: -1.34%

But here’s the twist:

Russell 2000 (small caps): +1.2%

The companies getting destroyed:

C.H. Robinson (logistics): -14.5% — A new AI tool called “SemiCab” automates freight routing. The entire business model is at risk.

Cisco (networking): -12.3% — Beat earnings. Stock crashed. Why? AI chip costs are destroying margins.

AppLovin (mobile ads): -18.3% — Beat earnings AND guidance. Stock tanked because investors think AI will change how people use the internet.

The pattern: Companies beating estimates and getting slaughtered anyway.

Why? Because good earnings don’t matter if your business model is about to be automated out of existence.

Friday: Inflation Cooled, Markets Didn’t Care

CPI dropped to 2.4% — the lowest since May 2025. Below the 2.5% forecast. Core inflation fell to 2.5%, the lowest since March 2021.

This is exactly what the Fed needed to justify rate cuts.

Markets reaction:

• S&P 500: +0.05%
• Nasdaq: -0.22%
• Russell 2000: +1.2%

Basically flat.

Why didn’t we rally?

Because Thursday’s AI panic overshadowed Friday’s good inflation news. Bond yields fell(2-year yields hit lowest since 2022), but stocks barely moved.

The market got everything it wanted — weak jobs, cool inflation, Fed can cut — and didn’t care.

What This Week Actually Means

Let’s connect the dots:

The soft landing is happening.

• Labor market weak (zero jobs in 2025)
• Inflation cooling (2.4%, lowest in 8 months)
• Fed has room to cut rates

But nobody cares.

Because the new fear isn’t “recession vs inflation.”

It’s “Can my company survive AI?”

If the answer is uncertain, the stock dies — even if earnings are great.

The Great Rotation

Here’s the trade that emerged this week:

OUT: Companies AI can disrupt

• Software (down 2.7%, now 31% below highs)
• Logistics (C.H. Robinson -14.5%, RXO -20%)
• Digital advertising (AppLovin -18%)

IN: Companies AI can’t kill

• Small caps +1.2% Thursday, up another 1.2% Friday
• Russell 2000 now +3%+ year-to-date vs S&P’s -0.7%
• Industrials, utilities, regional banks — physical businesses with local moats

The thesis: AI will optimize these businesses but can’t eliminate them.

You can’t automate away:

• Regional banking relationships
• Construction crews
• Utility infrastructure
• Healthcare workers
• Manufacturing plants

But you CAN automate:

• Freight routing
• Software development
• Digital advertising optimization
• Data analysis

What Happens Next

The soft landing is real. Jobs weak, inflation cool, Fed will cut.

But the AI displacement story is now bigger.

This week proved that good earnings aren’t enough anymore. You need a business model AI can’t destroy.

The next catalyst: Nvidia earnings Feb 25.

If Nvidia crushes it (expected: $65.5B revenue, up 67%), the AI infrastructure build-out is validated. Big Tech stabilizes.

If Nvidia disappoints or guides cautiously, the rotation accelerates. Small caps rip, Big Tech dies.

The Bottom Line

This week gave us:

• Confirmation 2025 added zero jobs
• Inflation at 2.4% (soft landing confirmed)
• AI panic that crashed logistics, software, digital ads
• Small caps surging while Big Tech burned

What it means:

The market doesn’t care about the Fed anymore. It cares about which companies AI kills.

If you own businesses that live in software, start asking hard questions.

If you own businesses with physical assets, local relationships, and human-dependent operations? You just got a lot safer.

The playbook changed this week.

Are you positioned right?

Good luck out there.

P.S. Five days ago, the debate was “soft landing vs stagflation.” Today it’s “AI boom vs AI displacement.” Nvidia’s earnings in 11 days will tell us which narrative wins.

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