Stocks closed lower yesterday with only the Dow eking out a small-gain. (Although, that was enough for another new all-time high.)

Financial stocks took the brunt of the selling yesterday.

Upon the announcement of a new AI-powered tax planning tool by Altruist, many stocks with tax planning offerings tumbled.

The common denominator between yesterday's slide in financials, last week's slide in AI names, and the previous slide in software stocks ? is AI.

I mentioned this before, but I'll say it again ? 1) I believe we are in the early stages on the AI boom. Yes, there's an increase in AI CapEx. But it's clear the companies making these investments see the demand, and have determined they will produce high-return results. 2) I don't see AI as killing software. To the contrary, I see it enhancing it as AI becomes the next layer on top of software, or becomes the intelligence inside the software, which then increases software demand. Make no mistake, there will be disruption, as there is with any new technology or innovation. The strong shall survive. But that's different than killing off industries. And while there will be some casualties, AI will create many winners by elevating existing companies, along with new ones being created along with different products and services.

The main event today is the Employment Situation report by the Bureau of Labor Statistics (BLS). The consensus is calling for 67,000 new jobs to have been created in January (80,000 in the private sector, but -13,000 in the public), while the unemployment rate stays the same at 4.4%.

Today's report comes out at 8:30 AM ET.

Earnings season continues. Before the open yesterday, Marriott reported a negative EPS surprise of -2.27%, and a positive sales surprise of 0.13%. That translated to a quarterly EPS growth rate of 5.31% vs. this time last year, and a sales growth of 4.04%. Shares soared by 8.50% yesterday, hitting new all-time highs in the process.

After the close, Ford posted a negative EPS surprise of -23.53%, and a positive sales surprise of 3.27%. That equated to a quarterly EPS growth rate of -66.7%, and a sales growth of -5.35%. But they guided full-year adjusted EBIT to a midpoint of $9 billion vs. last year's $6.8B, with free cash flow expected at a midpoint of $5.5B vs. last year's $3.5B. Shares were off -0.15% in the regular session before earnings, but were up more than 1.5% in after-hours following earnings.

We also heard from Cloudflare after the close and they posted a positive EPS surprise of 3.70%, and a positive sales surprise of 4.12%, for a quarterly EPS growth rate of 47.4%, and a sales growth of 33.6%. And they raised their revenue outlook for 2026 by 2.16% above estimates. They were up 3.59% in the regular session before earnings, and another 9% in after-hours.

Today we'll hear from another 203 companies, including McDonald's, Shopify and TMobile before the open, and Cisco and AppLovin after the close.

Recent volatility has made for uneven performance this year, but the indexes are mostly off to a good start. YTD, the Dow is up 4.42%; the S&P is up 1.41%; the Nasdaq is off -0.60%; the small-cap Russell 2000 is up 7.97%; and the mid-cap S&P 400 is up 8.61%. (For context, the Nasdaq last year was up 20.36%, while the mid-caps were up just 5.90%.) I'm expecting big things across the board for all of the indexes this year.

See you tomorrow,