Inflation Cooldown vs. Tech Meltdown: Navigating the Split Market
February 15, 2026 - Update
Photo by Pablo García Saldaña on Unsplash
The most critical macro data point this week was inflation coming in better than expected at 2.4% YoY. Here are the key numbers from Bloomberg:
US JAN. CONSUMER PRICES: +0.2% M/M (Est. +0.3%)
US JAN. CORE CPI: +0.3% M/M (Est. +0.3%)
US JAN. CORE CPI: +2.5% Y/Y (Est. +2.5%)
US JAN. CONSUMER PRICES: +2.4% Y/Y (Est. +2.5%)
The current forecast for the February read is 2.38%, essentially holding steady.
Why does this matter? Lower inflation gives the Fed room to increase liquidity and lower interest rates—exactly what we want to see over the coming months. My framework for this is simple:
More liquidity → Lower rates → More credit availability → More borrowing & lending → More investments → More growth → More earnings → Higher stock valuations.
Supporting this view, the 10-year Treasury yield is now at 4% and in a short-term downtrend. This confirms that inflation expectations are cooling, a trend further backed by the latest University of Michigan data.
The macro backdrop remains supportive for stocks in the medium term.
The Index: S&P 500 Analysis
The S&P 500 lost 1.4% last week and now sits right on its 20-week moving average.
Here is my AI-assisted breakdown of the technical picture:
Trend (Stage Analysis Lens) We are still in Stage 2 (uptrend), but the risk of a late-stage transition is rising. The price (~6836) is below the 10-week moving average (~6898) but remains above the 30-week (~6703) and 40-week (~6543).
Translation: The primary uptrend is intact, but momentum has weakened significantly. We are in the “don’t be a hero” part of the cycle.
Momentum & Damage The index is in a battle at the 7,000 level, and momentum is clearly fading (sideways price action + negative MACD histogram). The RSI is in the mid-50s—not yet oversold. This combination often behaves like a tide going out slowly: it’s not panic, but there are fewer “easy longs” available.
Levels to Watch Next Week
Resistance: ~7000 (We failed to hold this).
Near Support: ~6816 (20-week MA).
Key “Line in the Sand” Support: ~6700 (30-week MA).
If we start seeing weekly closes below the 30-week MA and the line flattens, the risk of moving from “Late Stage 2” to “Stage 3/4” jumps significantly.
“Under the Hood” Damage Even though the index hasn’t moved much in recent weeks, the damage beneath the surface is severe. Just look at the drops in major SP500 participants over the last month:
APP: -42%
HOOD: -36%
COIN: -35%
PYPL: -29%
NOW: -23%
CRM: -21%
AMZN: -18%
MSFT: -15%
GOOGL: -9%
This is not an easy tape right now.
Sector Rotation
Looking at the sectors, the bifurcation I discussed a few weeks ago is playing out.
Winners: Energy, Infrastructure, Consumer Staples, and Foreign Stocks were the highlights over the past month.
Losers: Consumer Discretionary, Bitcoin, and Tech were among the worst performers.
A rotation is clearly underway.
10X Momentum Portfolio
My BUY STOP orders for PSIX and INCY were triggered this week.
PSIX: Up 21%.
INCY: Down 7% following a mixed earnings release (beat on revenue, missed on EPS).
Both were half positions. Currently, the account is 78% cash.
Unfortunately, nothing on my watchlist looks truly convincing right now. Given the environment, here is my plan:
INCY: I will buy my second half (26 shares) if it touches $103 this week. I am keeping my Stop Loss at $96.5. Let’s see if it can recover or if I get stopped out.
PSIX: I will buy my second half (35 shares) only if it touches $93.
That’s all for now. Let’s see what this short week (Monday market closed) brings us—more volatility or more clarity? We’ll find out.
Important: This is not investment advice. Please consult a licensed financial advisor before making any investment decisions.
Disclosure: The content has been reviewed using artificial intelligence to enhance readability and ensure grammatical accuracy.