THE DEAN’S LIST: The Week Everything Got Loud

Dean’s note:
What a week. The Dow crossed 50,000 for the first time in history. Bitcoin dropped below $61,000 before bouncing back above $70,000. Software stocks got absolutely hammered on fears that AI is about to eat their lunch. Gold and silver kept healing from last week’s crash.

And through it all, the same themes we’ve been talking about on TDL kept working. The Dow’s big milestone was driven by industrial and cyclical stocks like Caterpillar, Goldman Sachs, and GE Aerospace - not the Magnificent Seven. The Russell 2000 rallied 3.6% on Friday. Equal-weight outperformed cap-weight again. That’s the rotation in action.

The market is telling you something: breadth matters, diversification matters, and the investors who spread their bets are sleeping better at night. Stay zoomed out.

This was one of the wildest weeks of 2026 so far. Earnings season roared on. Software stocks had their worst selloff in years. Bitcoin fell off a cliff. And then Friday came along and rescued the week with a monster rally. Here’s what happened last week and what it means:

Monday–Tuesday: Gold and silver continued their rebound from last week’s crash. Software stocks got crushed after Anthropic released new AI productivity tools. The “SaaSpocalypse” wiped nearly $1 trillion off software stocks in a week.

Wednesday: The ADP jobs report came in weak—only 22,000 private jobs added in January versus 48,000 expected. AMD crashed 17% despite beating earnings, because its Q1 outlook disappointed. The rotation into value stocks continued.

Thursday: Alphabet reported and guided for $185 billion in AI capital spending for 2026. The S&P 500 fell 1.2%, landing negative for the year. Bitcoin briefly crashed below $61,000—its lowest since October 2024. Amazon missed earnings slightly and announced $200 billion in capex plans.

Friday: The market flipped the script. The Dow surged 1,207 points to close above 50,000 for the first time. The S&P 500 jumped 2%. The Russell 2000 rallied 3.6%. Bitcoin bounced back above $70,000. Gold climbed above $4,950. Nvidia and Broadcom each rose 7–8%. This kind of volatility rewards sitting on your hands and dialing down your daily dose of CNBC.

On Friday, the Dow Jones Industrial Average closed above 50,000 for the first time. That’s a big, round, headline-grabbing number. And while I don’t think you should make any investment decisions based on milestones for silly price-weighted indexes alone, this one is worth pausing on.

What drove it? Not tech, because the highest priced stocks in the Dow aren’t that. Caterpillar surged over 6%. Goldman Sachs climbed 4%. GE Aerospace rose over 5%. Airlines like Delta and United rallied 7–8%. These are old-economy, cyclical companies that happen to have high stock prices and do well when the economy is growing and investors feel good about the future. The fact the Dow hit this milestone on the backs of industrials and financials, not Nvidia or Apple, tells you something important about where the money is flowing.

Wharton professor Jeremy Siegel called AI “probably one of the greatest technological revolutions we’ve ever experienced” and said Dow 50,000 reflects “fundamental strength in this economy.” I agree, with a caveat: milestones feel good, but they’re not strategy. The next 1,000 points could be up or down. Focus on what you control.

Dean’s note:
Even with Friday’s pop, the S&P 500 was basically flat for the week, and the Nasdaq fell 1.8%. The Dow rose 2.5% and the equal-weight S&P 500 rose more.

That gap tells the story: the market is broadening. If your entire portfolio is in the regular old S&P 500, you’re getting dragged down by tech. If you’re diversified across value, small caps, and international stocks, you’re doing better than the headlines suggest.

Look at the single digit millionaire portfolio we put together for 2026 if you need guidance.

This was the week that investors finally woke up to the idea that AI isn’t just a tool for tech companies. It’s a threat to some of them. Anthropic released new capabilities for its Claude Cowork productivity tool, including plugins for legal work, finance, and marketing. The tools can now draft legal documents, review contracts, and organize complex workflows.

The market reaction was brutal. Thomson Reuters and LegalZoom each fell over 15%. Salesforce dropped about 7%. ServiceNow tumbled 7%. Intuit fell nearly 11%. The WisdomTree Cloud Computing Fund has lost about 20% so far in 2026. Software stocks that were once considered safe, predictable, recurring-revenue businesses are suddenly being treated like they’re on the chopping block.

Is the fear overdone? Probably, in the short term. JPMorgan said software stocks are being “sentenced before trial.” Many of these companies have deep customer relationships, sticky products, and years of data that AI startups can’t easily replicate. But the long-term direction is clear: AI is going to change how businesses buy and use software, and not every company will survive the transition.

Dean’s note:
This is the flip side of the AI boom. For the past three years, every tech stock got a bump just from mentioning AI.

Now the market is getting picky. The winners are the companies building the AI infrastructure—chips, cloud, and models.

The losers might be the companies whose products AI can replace. If you own software stocks, don’t panic, but pay attention. And if this selloff reminds you that concentration in one sector is risky, good. That’s the lesson. It might also be a reminder that you’re a terrible stock picker. Choose ETFs instead.

Bitcoin had one of its most dramatic weeks in recent memory. It started last week around $75,000, fell steadily through Thursday, briefly crashed below $61,000—its lowest since October 2024—and then bounced back above $70,000 on Friday. It’s now down over 40% from its all-time high of $128,000 hit last October.

The crash was caused by the same forces hitting everything else: risk-off selling, forced liquidations of leveraged positions, and a general flight from anything speculative. More than $2 billion in crypto long and short positions were liquidated since Thursday alone. Digital asset investment products saw a second straight week of outflows totaling $1.7 billion.

Friday’s bounce was encouraging, but Bitcoin is still sitting at levels not seen since the early days of the current bull run. Some analysts see $50,000 as a possibility if selling continues. Others think the long-term case - limited supply, institutional adoption, potential reserve asset status - hasn’t changed.

Dean’s note:
I’ve said this before and I’ll say it again: Bitcoin is a volatile, speculative asset. It can drop 40% in a couple of months and that’s just how it works.

If you own some as a small part of a diversified portfolio, don’t panic. If you bet the farm on it, this week was a wake-up call. The best move for most sane individuals right now is probably to do nothing and let the dust settle.

The ADP report on Wednesday showed that private employers added only 22,000 jobs in January. That’s a miss. Economists expected 48,000. Health care was the standout, adding 74,000 jobs on its own. Interestingly, healthcare stocks aren’t offering much of a hedge on volatile down days. Professional and business services lost 57,000 positions, and manufacturing continued to shed jobs.

Meanwhile, announced job cuts hit 108,000 in January. Brings 2009 back into focus and that wasn’t a good year. Initial jobless claims ticked up to 231,000. None of this screams “crisis,” but it does paint a picture of a labor market that’s softening at the edges and bears careful monitoring. We pay attention to our LinkedIn messages as a canary in the coalmine. And our inboxes are full of highly educated and experienced friends looking for work. This hasn’t happened in many, many years.

Why does this matter for your money? A cooling labor market makes it more likely the Fed will cut rates later this year. Markets are already pricing in a potential first cut in June. Lower rates generally help stocks, bonds, real estate, and small-cap companies that rely on borrowing.

Dean’s note:
The labor market isn’t falling apart, but it’s no longer as strong as it was a year ago. That’s actually a Goldilocks scenario for the Fed: not so hot that it needs to raise rates, not so cold that it needs to panic.

Keep an eye on the monthly jobs report (which has been delayed) and the CPI data this week. Those numbers will shape the Fed’s next move until we learn more about Warsh’s intentions. And those intentions won’t be made clear until his confirmation hearings which are currently delayed because our government is filled with nasty people.

This week gave us three more big tech earnings reports that all told the same story: companies are spending a fortune on AI, and investors are getting anxious about when it all pays off.

Alphabet guided for up to $185 billion in AI capital spending for 2026. That spooked investors, and the stock dipped about 0.5% after earnings. The question isn’t whether Google needs AI, but whether spending $185 billion is the right amount.

Amazon slightly missed earnings expectations ($1.95 versus $1.97 expected) and announced $200 billion in planned capital expenditures. Shares sank more than 5%. Most analysts kept their buy ratings but lowered their price targets. When the biggest companies on earth are promising to spend a combined trillion dollars on AI, we ask where’s the return?

AMD actually beat on both revenue and earnings. Revenue jumped 34% and EPS rose 40% year over year. But the stock crashed 17% because its Q1 revenue forecast of $9.8 billion came in below the sky-high hopes investors had built up. When expectations are unreasonable, even good news is bad news.

Dean’s note:
The AI spending debate is the most important question in the market right now.

Last week, Meta showed that AI spending can directly improve the core business. This week, Alphabet and Amazon are asking investors to trust that the spending will pay off later. AMD showed that even crushing your earnings doesn’t matter if the bar was set impossibly high.

This is why the market is rotating. Investors want proof, not promises. Just remember the rotation can stop any time. Trends aren’t trends until they go on for months and quarters, not days and weeks.

Last week was one of those weeks where every headline tried to scare you. Bitcoin crashing. Software stocks in freefall. AI is going to eat your job. The market’s negative for the year. But if you stepped back and looked at the full picture on Friday evening, here’s what you’d see: the Dow just hit an all-time high. Gold is healing. Small caps and foreign stocks are outperforming. And the global economy is still growing.

The scary headlines are about the things that got overheated including speculative software bets, leveraged crypto positions, and sky-high expectations for AI earnings. The quiet story is that the market is broadening, the labor market is cooling gently, and disciplined investors are being rewarded.

Here’s my framework for the rest of February:

The rotation is real. The broadening is healthy. Commodities are leading the way. Disciplined investors are being rewarded. Stay zoomed out.

— Dean

P.S. The Dow at 50,000 sounds exciting, but it doesn’t change your savings rate, your time horizon, or your diversification. Those three things matter more than any milestone. Build your plan and stick with it.

Read The Dean’s List 2026 Financial Forecast to see the trends as it relates to your money.