Market Analysis Summary - Week of 9 February 2026

Summary of Last Week's Events

The Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to 3.85%, marking its first increase since 2023, driven by concerns over rising inflation. In contrast, the European Central Bank (ECB) and the Bank of England (BoE) maintained their rates, with the ECB holding steady at 2.00% and the BoE voting 5-4 to keep rates at 3.75% amid downward revisions in growth and inflation.

In Japan, Prime Minister Takaichi's ruling Liberal Democratic Party secured a two-thirds majority in snap elections, allowing for potential aggressive fiscal spending. This political stability is expected to support Japanese equities, although the yen and bonds may face downward pressure.

Market Performance Highlights

US Software Stocks

US software stocks fell by 7.5% due to concerns over AI disruption, with the S&P 500 Software & Services Index extending year-to-date losses to 18.6%. The decline was exacerbated by Anthropic's release of new AI plugins, raising fears of traditional software displacement.

Hang Seng Index

The Hang Seng Index dropped 3.0%, influenced by risk-off sentiment and declines in the technology sector. Notable losses included Kuaishou and SMIC, with the index testing critical support levels.

Bitcoin

Bitcoin continued its downward trend, falling 7.5% and trading below $70,000. The cryptocurrency's performance diverged from gold, with significant net redemptions in Bitcoin ETFs and liquidations of long positions contributing to the decline.

Looking Ahead

The upcoming week will focus on US and Chinese inflation data, alongside US employment figures. China's inflation data will be crucial in assessing the recovery of the consumer price index, while the US employment report is expected to show a modest increase in job additions.

Key corporate earnings to watch include results from NetEase, Cisco, and others, which will provide insights into the impact of AI on various sectors.