Author: Deep Trend TechFlow

U.S. Stock Market: A "perfect" employment report, why is no one happy?

At yesterday's (February 11) close, the protagonist of the story was not a particular stock, but a piece of data.

The January non-farm employment report showed an actual increase of 130,000 jobs against a market expectation of 55,000, doubling the expectation. The unemployment rate concurrently dropped from 4.4% to 4.3%. This should have been good news, but after a brief surge, U.S. stocks collectively retreated: the Dow fell 0.13%, closing at 50,121 points; the S&P 500 barely moved, closing at 6,941 points; the Nasdaq fell 0.16%, closing at 23,066 points.

This "counterintuitive" reaction reveals the core contradiction in the current market: the better the economy, the further rate cuts are pushed away, making it harder to support valuations.

After the non-farm data was released, the market immediately pushed back the expectations for this year's rate cuts.

A healthy labor market means the Federal Reserve has no urgent reason to loosen interest rates. The high valuations of tech stocks are based on the expectation of "rate cuts upon rate cuts." After the news came out, Treasury yields jumped, and software stocks were hit hard again: Salesforce fell over 4%, IBM plunged 6.44% in a single day, and Zillow Group plummeted 17%.

However, digging into the data, this report is not so "perfect." Employment is concentrated in healthcare and social services, and the employment data from the past two years has been historically revised downwards, with the actual net increase in employment for the entire year of 2025 revised from 580,000 to 180,000, the lowest since 2003. Rather than saying the economy is strong, it is more about the statistics being "delivered late."

There is a quiet civil war happening in the market, which was reflected in a snapshot caused by a financial report yesterday.

Vertiv (VRT) shares surged 25% in a single day, recovering all its losses for the year, with a market cap increase of over $10 billion in one day.

The reason is simple: this company, which provides cooling and power systems for data centers, saw a 252% year-over-year increase in orders in the fourth quarter. Not 25%, not 52%, but 252%. The company's backlog has reached $15 billion, doubling year-on-year, and the full-year earnings guidance for 2026 is expected to be between $5.97 and $6.07 per share, significantly exceeding Wall Street's previous expectation of $5.51. The CEO stated: our backlog has provided a clear visibility for growth in 2026.

On the same day, Cloudflare soared 11% due to strong Q4 performance and revenue guidance for 2026 exceeding expectations.

On the other hand, Mattel fell 27%, Zillow dropped 17%, and Unity Software plummeted 32%, as software stocks were again crushed by the AI narrative.

This is the current market landscape: those building for AI are making big money, while old tenants living in AI buildings are being evicted. Vertiv sells shovels, Cloudflare makes pipelines, they are winning; while those enterprise software companies facing potential replacement by AI are being continuously repriced.

Today's focus: Tomorrow (in the late night of February 13 Beijing time/early morning of the 14th), the U.S. will release the January CPI inflation data. This is the last bomb this week and the key referee determining whether "rate cut expectations can return." The market currently predicts the CPI annual rate to remain around 3%, and if it exceeds expectations, tech stocks may face another hit.

Gold and Silver: The 4,500 yuan level ground begins to solidify

Yesterday (February 11), spot gold closed in the range of $5,063 to $5,088 per ounce, rising over 1% for the day; silver rebounded even more sharply, soaring about 5% at one point, closing around $84 to $85 per ounce. This morning, gold stabilized around $5,063.

The "epic crash" over the past weekend saw gold's single-day drop reach decades' new highs, and silver's biggest single-day decline in history is being gradually digested by the market.

Why could it rebound so quickly? Support comes from several directions at once:

First, the strong non-farm report triggered a transmission chain—stronger employment represents economic resilience, and resilience means inflation will not decline rapidly; if inflation does not decline, the logic for gold remains intact; second, the People's Bank of China has increased its gold holdings for the 15th consecutive month, with central bank purchases serving as a long-term support force; third, while there has been progress in U.S.-Iran negotiations, the geopolitical powder keg has not been extinguished, and demand for safe-haven remains intact.

However, silver's situation is much more delicate. Silver inventories in the London vault have continued to shrink since the end of January, global capacity for solar panels continues to expand, and industrial demand for silver is structurally improving; however, ETF funds are continuously flowing out, and short-term speculators have been exhausted in the recent volatile swings. UBS maintains a year-end silver forecast of about $85, Goldman Sachs has a year-end target for gold at $5,400, while JPMorgan Chase is the most aggressive, calling for $6,300 by year-end.

In short: gold has firmly established itself above $5,000; silver is oscillating between $80 and $85, waiting for CPI data to provide direction.

Cryptocurrency Market: With the label of "extreme fear," Bitcoin hovers around $67,000

Currently, Bitcoin is reported at about $67,500 to $67,700, with a 24-hour trading volume of about $26.3 billion, retreating again from the brief rebound before the non-farm report.

Yesterday's scenario was like this: after the release of the non-farm data, market sentiment briefly improved, and Bitcoin hit about $69,000 at one point during the day. However, as rate cut expectations were reined in and Treasury yields rose, Bitcoin quickly surrendered its gains, falling back and closing below the $68,000 mark again.

What is even more worrying is not the price, but the structure of market sentiment. The crypto fear and greed index currently lingers in single digits, in the extreme fear range.

Robinhood's after-hours financial report showed a significant decrease in crypto business revenue, confirming the reality of retail investors exiting the market. CoinShares data also shows that since the beginning of this year, over $1 billion has flowed out of Bitcoin spot ETFs. After expectations for tighter Fed rates, institutional arbitrage and positioning are marginally retreating.

Mike Novogratz, founder of Galaxy, told CNBC that Bitcoin is currently in a "recession phase of speculative times," with extremely low retail interest.

From the perspective of distance to the historical high of $126,000, Bitcoin has nearly halved now. The last time the drop reached this level from the high was at the beginning of 2022, which took 28 months to recover.

Several variables worth continuous attention: If the CPI data meets or exceeds expectations, it will further suppress rate cut expectations, which would be bearish for the crypto market; conversely, if CPI unexpectedly falls below expectations, returning rate cut expectations may create a short-term rebound window.

Additionally, the Senate hearing for new Federal Reserve Chair nominee Waller has not been officially scheduled; his previous friendly statements towards Bitcoin and the tension between his potential hawkish rate stance will be one of the important narrative clues for the market in the second half of the year.

To sum up, the "non-farm" numbers being "twice the expectation" should have been a reason for the market to cheer, yet it has ironically become a new tool to suppress technology stocks. This misalignment is the peculiar aspect unique to the U.S. stock market in 2026.

Hardware infrastructure is advancing rapidly in the era of stock splits, while software services are retreating under the pressure of AI; gold has regained support after panic, while Bitcoin is left with a big question mark on its "digital gold" identity.

Tonight, the die of CPI has not yet landed.