By Martin Baccardax
U.S. stocks are presently in an historically uncertain rut as the S&P 500 continues to test 7000 while navigating a surge in commodities prices, disruption tied to artificial-intelligence technologies, and broader questions over the direction of an economy that might need fewer workers but billions in capital.
The S&P 500 ended essentially unchanged Wednesday, falling less than a single point, or 0.008%. Such a paltry move, in the wake of a surprisingly strong U.S. monthly jobs report that hammered bets on Federal Reserve rate cuts, suggests a market that continues to search for direction.
While an "unchanged" session for the benchmark is rare enough to have only occurred around 10 times over the past four decades, it has happened four times over the past five months and started when the S&P 500 began testing the 7000-point mark.
Tom Lee, head of research at Fundstrat, has an idea as to why.
"AI carnage of software and other sectors raises concerns about whether AI is bad for equities and gold's relentless rise is creating [fear of missing out] about why own stocks at all," he said in a note published Thursday.
Gold has jumped more than 17% for the year and continues to hold gains north of $5,000 an ounce as the yellow metal appears to be taking money from the cryptocurrency market amid Bitcoin's months-long decline.
It's also acting as a hedge against dollar debasement and geopolitical uncertainties, both of which continue to hang over markets heading into the back half of the first quarter.
"Keep in mind gold has become so big, it is now essentially larger than the stock market," Lee said, noting that at $42 trillion its overall value exceeds that of the so-called Magnificent 7 stocks. "Is it any wonder that we are seeing many investors simply say 'let's buy gold' and forget about equities?"
That could explain why the S&P 500 been struggling to breach 7000 on a sustained basis, having first tested the historic threshold in late October. The benchmark has gained only 0.7% since then, having tried and failed to close north of 7000 on at least five different occasions.
It's a curiously uninspiring run for the benchmark, which seemingly has a host of bullish tailwinds behind it, including forecasts for double-digit earnings growth this year, an economy that continues to grow a firmer-than-expected clip, and a job market that has held up well against predictions of a sharp downturn.
New Fed leadership, a weaker U.S. dollar and the expected boost from the One Big Beautiful Bill Act are also expected to boost corporate profits and drive major indexes higher.
So why the hesitation to power into new territory?
The ongoing rotation into non-tech sectors such as energy, materials, and industrials is creating a broader, more diversified level of overall exposure -- but it's also holding back gains for the S&P 500.
Megacap tech stocks still dominate the benchmark's weighting and a far larger number of stocks outside of the tech space need to rise in unison in order to offset even a neutral session for the Magnificent 7.
That's hard to achieve when headlines linked to tariffs, military action in Latin America and the Gulf region, and U.S.-China trade talks generate deeper uncertainty into the first half of the year.
Fed rate policy also is difficult to gauge when the economy is poised to extend its recent advances without creating jobs outside of select sectors such as education and healthcare.
With the jobs report Wednesday in the rearview mirror, and the bulk of a solid fourth-quarter earnings season behind it, investor focus is likely to shift to the inflation report for January on Friday and then to Nvidia's hugely anticipated earnings report on Feb. 25.
"While we remain bullish on stocks for 2026, the mood right now is cautious optimism with fatigue," said Charlie Anderson, senior vice president at UBS Wealth Management in Bethesda, MD. "Stocks are a bit tired and we wouldn't be surprised to see some near-term chop as the market figures out its next catalyst."
In the meantime, the S&P 500 at 7000 may have to wait.
Write to Martin Baccardax at martin.baccardax@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 12, 2026 07:17 ET (12:17 GMT)
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