Wall Street closed sharply lower on Thursday, February 12, 2026, as a wave of selling hit technology shares following the latest Federal Reserve commentary and a mixed batch of earnings reports. The major indices erased part of last week’s historic gains, with investors rotating defensively ahead of key inflation data. This in-depth recap details the most significant market moves, sector shifts, and macroeconomic signals driving volatility as earnings season enters a critical stretch.
Key Takeaways:
- All major US indices snapped back from recent highs, with the Dow (DJI) falling nearly 700 points and the S&P 500 (SPX) and Nasdaq (IXIC) down 1.5% and 1.9% respectively.
- Tech stocks led the selloff as investors digested fresh Fed commentary and disappointing earnings from Cisco (CSCO) and AppLovin (APP).
- Defensive sectors outperformed, while trading volumes spiked on rotation into safe-haven assets.
- The market is on edge ahead of the January CPI release, which is expected to determine the Federal Reserve’s next move.
- International markets and commodities mirrored Wall Street’s volatility, setting the stage for another turbulent week.
Market Overview
US equity markets reversed course Thursday, February 12, ending a multi-session rally with their steepest losses since January. The Dow Jones Industrial Average (DJI) dropped nearly 700 points, or 1.4%, closing around 49,172, while the S&P 500 (SPX) shed 1.5% and the Nasdaq Composite (IXIC) slumped 1.9%. More than 80% of S&P 500 components finished in negative territory, marking a broad-based retreat as selling pressure accelerated late in the session (CNBC).
The Dow Jones Industrial Average (DJI) dropped nearly 700 points, or 1.4%, closing around 49,172, while the S&P 500 (SPX) shed 1.5% and the Nasdaq Composite (IXIC) slumped 1.9%. More than 80% of S&P 500 components finished in negative territory, marking a broad-based retreat as selling pressure accelerated late in the session (CNBC).
| Index | Close | Change | % Change |
|---|---|---|---|
| Dow Jones (DJI) | ~49,172 | -700 pts | -1.4% |
| S&P 500 (SPX) | Not specified | Broad decline | -1.5% |
| Nasdaq Composite (IXIC) | Not specified | Heavy selling | -1.9% |
This reversal follows last Friday’s record-breaking rally, when the Dow surged 962.86 points (1.97%) to an all-time high of 49,871.58. As highlighted in our previous market recap, volatility has increased sharply as investors position for upcoming macroeconomic catalysts.
As highlighted in our previous market recap, volatility has increased sharply as investors position for upcoming macroeconomic catalysts.
Trading volumes spiked as both institutional and retail investors reduced risk. The CBOE Volatility Index (VIX) jumped, reflecting a sharp uptick in demand for downside protection. Market breadth deteriorated further, with only defensive areas bucking the broad selloff. These developments signal a significant shift in investor sentiment compared to last week’s risk-on rally — a reversal consistent with our recent analysis of macroeconomic headwinds.
Top Movers
Thursday’s session saw pronounced moves among both high-profile tech names and select defensive stocks. Tech and high-growth shares bore the brunt of the selloff, while certain consumer staples and utilities held up better. Earnings disappointments and guidance cuts fueled some of the largest individual stock declines.
| Ticker | Price | Change % | Reason |
|---|---|---|---|
| CSCO | Not specified | – | Cisco plunged on weak earnings and guidance |
| APP | Not specified | – | AppLovin sold off after disappointing results |
| AAPL | Not specified | – | Apple shares fell with broader tech weakness |
| NVDA | Not specified | – | Nvidia declined amid sector rotation out of AI leaders |
| TSLA | Not specified | – | Tesla retreated as risk appetite evaporated |
| XOM | Not specified | – | ExxonMobil outperformed as energy stocks held steady |
| PG | Not specified | – | Procter & Gamble gained on defensive rotation |
| JNJ | Not specified | – | Johnson & Johnson rose as investors sought safety |
| MSFT | Not specified | – | Microsoft faded with the tech sector |
| GOOGL | Not specified | – | Alphabet slumped with other megacap techs |
Many of these moves were closely tied to earnings season volatility. Cisco (CSCO) and AppLovin (APP) posted weaker-than-expected results and cautious outlooks, leading to sharp declines and dragging peers lower. Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) all saw outsized losses as the tech-heavy Nasdaq fell nearly 2%. Meanwhile, defensive names like Procter & Gamble (PG) and Johnson & Johnson (JNJ) advanced as investors sought stability. ExxonMobil (XOM) and Chevron (CVX) held their ground thanks to resilient energy prices. For a deeper look at recent leadership and notable movers, see our recent coverage of biggest movers and economic data.
Sector Performance
Sector rotation accelerated as traders sought refuge from technology volatility. Utilities (XLU) and consumer staples (XLP) led on a relative basis, while technology (XLK), consumer discretionary (XLY), and communication services (XLC) lagged. The energy sector (XLE), buoyed by stable crude prices, outperformed the broader market, with ExxonMobil (XOM) and Chevron (CVX) holding up well.
- Leading Sectors: Utilities (XLU), Consumer Staples (XLP), Energy (XLE)
- Lagging Sectors: Technology (XLK), Consumer Discretionary (XLY), Communication Services (XLC)
This defensive rotation is evident in ETF flows and institutional allocations. Utilities and consumer staples, typically less sensitive to economic cycles, attracted inflows as investors braced for potential further volatility. Technology and consumer discretionary sectors, both heavily weighted in the S&P 500, faced sharp outflows as traders reduced exposure to growth-oriented assets. The rotation out of high-valuation tech leaders and into stable dividend payers has been a consistent theme since last week’s highs, as detailed in our afternoon market wrap.
Notably, the energy sector showed resilience despite equity market turbulence, with oil majors benefiting from steady crude prices and a relative lack of earnings disappointments. Financials and healthcare were mixed, with select large-cap names outperforming on defensive characteristics.
Macroeconomic Developments
The macro backdrop remains complex. The market is bracing for the January Consumer Price Index (CPI) release, a key data point expected to influence the Federal Reserve’s interest rate trajectory. Fed officials reiterated their cautious stance, emphasizing data dependence and the need for clear signs of inflation cooling before considering policy easing (CNBC).
Bond yields rose across the curve as investors rotated into Treasuries and other safe havens. The CBOE Volatility Index (VIX) spiked, reflecting a surge in demand for downside protection. The US dollar index (DXY) strengthened on safe-haven flows, while expectations for Fed rate cuts were pushed further out. Investors increasingly expect any policy easing to be gradual and contingent on a string of benign inflation prints.
The earnings season delivered mixed results, with notable disappointments from Cisco (CSCO) and AppLovin (APP) weighing on risk appetite. Investors are scrutinizing forward guidance for signals on corporate resilience in a higher-for-longer rate environment. This macroeconomic uncertainty mirrors the themes outlined in our daily macroeconomic recap, where persistent inflation and mixed economic signals continue to drive sector rotation and volatility.
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Labor market data and GDP estimates have remained generally robust, but inflationary pressures and uncertainty about the pace of disinflation are keeping the Federal Reserve on high alert. Markets will be closely watching Fed commentary in the days ahead for any indication of a policy pivot or a more dovish tone.
Commodities and Global Markets
Commodity prices mirrored the volatility in equities. Crude oil held steady, supporting energy stocks, as supply-demand fundamentals remained largely intact. Gold prices edged higher, benefiting from safe-haven flows amid broad market uncertainty. Bitcoin and other cryptocurrencies traded mixed, reflecting both global risk aversion and asset-specific catalysts.
Overseas, European and Asian bourses closed lower in sympathy with Wall Street. Singapore’s Straits Times Index (STI) remained below 5,000, and India’s Sensex and Nifty 50 also declined, continuing the risk-averse trend highlighted in our daily macroeconomic recap. European benchmarks, including the DAX and CAC 40, fell as investors responded to US market weakness and rising global macro risks. In Asia, the Hang Seng and Nikkei posted notable declines, with technology and export-oriented stocks leading losses.
Currency markets saw the US dollar strengthen against major peers, driven by both safe-haven demand and expectations of a prolonged Fed pause. Commodity-linked currencies were mixed, reflecting divergent trends in oil and industrial metals.
Outlook and Key Events Ahead
All eyes are on the January CPI report, which is expected to be the pivotal macro event for rate expectations and market direction in the coming weeks. Fed speakers will remain in focus, with investors parsing every comment for hints of a policy shift. The earnings calendar is set to stay busy, with several S&P 500 heavyweights reporting in the next few sessions, which may further influence sector leadership and risk appetite.
- Key risks: Persistent inflation, Fed policy uncertainty, sector rotation out of high-multiple tech stocks, global growth headwinds.
- Key events: January CPI release, ongoing earnings reports from S&P 500 constituents, upcoming Fed meeting commentary, and international central bank decisions.
Investors should remain vigilant for further volatility as the macro and earnings narrative continues to evolve. For actionable analysis on navigating this environment, revisit our prior coverage in Market Recap: Biggest Movers and Economic Data Insights, Afternoon Market Wrap: Stocks, Bonds, and Economic Data, and Markets Today: Stock Market Recap and Economic Data Update.
Looking forward, the interplay between earnings announcements, inflation data, and central bank policy will remain the dominant driver of risk sentiment. With equity valuations still elevated by historical standards, any upside surprises in inflation or further hawkish rhetoric from the Fed could trigger additional volatility. Conversely, a benign CPI report and constructive corporate guidance could help stabilize markets and restore confidence in the recent rally’s durability. Stay tuned for ongoing updates and in-depth analysis as the story develops.