Weekly Market Update for February 27, 2026

by Gavyn Jensen-Schneider and Jared Plotz

Markets had an up and down week, motivated by swings in investor sentiment concerning how AI disruption may manifest. The S&P 500 finished the week down -0.43%, while the Nasdaq fell -0.92%. The 10-Year Treasury yield, an interest rate indicator, closed at 3.95%, down -14 basis points (bps) from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, fell 1 bp to 3.62%.

The AI disruption trade continued to ripple through the market after Anthropic unveiled Claude Code Security. This new tool searches within a firm’s codebase to find vulnerabilities, alerting human reviewers of these issues, and suggesting potential patches for implementation. Cybersecurity names such as CrowdStrike, Datadog, and Palo Alto Networks were all affected by Claude Code Security release, with the iShares Cybersecurity and Tech ETF falling by -5% on Monday.

The effects of AI on the labor market came into focus this week after analyst group Citrini Research published a narrative “report” describing a hypothetical future with heavy AI adoption. This piece, which received attention both inside and outside of Wall Street, describes a possible future in which many white-collar jobs are replaced by AI agents, lowering consumer spending and economic growth. While many feel this report is overblown, the widespread attention it has received highlights investors’ apprehension of where AI may take the economy, and whether it may unfold too quickly.

That uncertainty became all the more interesting after software company Block, which owns Cash App and Square payment systems, announced a 40% reduction in its workforce on Thursday. CEO Jack Dorsey said that “[Artificial] Intelligence tools have changed what it means to build and run a company…. A significantly ‌smaller team using the tools can do more and do ‌it better.” Block’s stock shot up +15% after announcing these job cuts, effectively offsetting the stock’s recent decline due to AI disruption fears. Block is one of the first companies to attribute a reduction in force directly to AI, and analysts will be watching to see if other firms follow suit.

Nvidia delivered another exceptional quarter in Q4, reporting on Wednesday that revenue surged >70% year-over-year and remained strong sequentially, fueled by relentless data center demand by hyperscalers, enterprises, and sovereign customers racing to secure AI processing capacity. The company’s Blackwell chips led the way, though management highlighted that the first Vera Rubin samples have begun shipping. Earnings once again topped expectations, reflecting favorable pricing dynamics, disciplined execution through a complex supply expansion, and unprecedented free cash flow generation. Management guided next-quarter revenue ahead of consensus, signaling sustained customer momentum in the near term. While the stock initially popped 4% when results were released, it ultimately pulled back amidst broader market volatility and investor uncertainty around outlooks for 2027.

Earning season enters its final stretch in the upcoming weeks, as well over three fourths of S&P 500 companies have reported for the quarter. Most of the companies that remain are stragglers from a variety of industries, however, companies in the consumer discretionary and retail sector—including Walmart, Target and Costco—are scheduled to report next week. The February employment report, which included the unemployment rate and nonfarm payrolls, headlines the economic data scheduled for next week