Last week wasn't a news cycle. It was a stress test.

Monday opened under a cloud of AI panic, the kind where mentioning "logistics" near a press release is enough to nuke a stock. By Wednesday, the Fed reminded everyone that inflation isn't just alive, it's doing cardio. Rate hikes are back on the menu of theoretical possibilities. Six months ago, that sentence would've gotten you laughed out of a Bloomberg terminal.

Then Friday showed up. Uninvited. Carrying a Supreme Court ruling, a soft GDP print, a PCE number moving in the wrong direction, and gold casually strolling past $5,000 an ounce like it had a reservation.

Markets closed the week green. The mood? "Relieved but not relaxed."

Translation: everyone's smiling with clenched teeth.

The S&P 500 closed around 6,909 after dipping to 6,775 mid-week. That 134-point range? That's not a market. That's a mood swing.

The Nasdaq and Dow both slipped 0.3%–0.5% on Thursday. Friday's tariff ruling gave equities a 0.7% bounce, just enough to pretend the week was fine.

But the real story isn't the index. It's the rotation.

Active large-cap managers are beating the S&P 500 at the highest rate since 2007. Fifty-seven percent are outperforming. Money is quietly leaving Big Tech and flowing into sectors that haven't seen a bid since people still used BlackBerrys.

Small- and mid-caps are staging a comeback. The AI darlings? Trading like they have trust issues and a therapist on speed dial.

Meanwhile, gold, barely mentioned in most retail portfolio reviews, hit a record $5,027 per ounce intradayon Friday.

It's a market that punishes the obvious trade and rewards everyone who stopped watching CNBC for fifteen minutes. Sound familiar?

The week inherited a hangover from the prior week's AI sell-off. It didn't recover. It spread.

Here's how absurd it got: a karaoke machine company pivoted to AI freight logistics, issued a press release, and somehow sent C.H. Robinson, a real, decades-old logistics giant tumbling more than 14%.

CEO Dave Bozeman fired back with "we are the disruptor and not the disrupted." Which is exactly what someone says right before getting disrupted.

AppLovin fell 18% on earnings. Pinterest dropped 21%. The actual AI infrastructure builders, Nvidia, Alphabet, and Amazon, slipped despite record capex announcements. Because when sentiment breaks, logic takes a lunch break. Then a personal day. Then file for PTO.

The silver lining? Goldman Sachs data shows stock pickers are relevant again for the first time in nearly two decades. When the tide goes out on passive Big Tech exposure, you find out who's been swimming naked.

Spoiler: it's a lot of people.

Walmart delivered earnings. E-commerce grew nearly 25% globally. Higher-income households are now shopping for groceries at Walmart.

Think about that. Rich people. At Walmart. For groceries.

That tells you everything you need to know about consumer confidence.

But the headline wasn't the best. It was CFO John David Rainey saying the quiet part out loud: "It's prudent to start the year with a level of conservatism given the backdrop is still somewhat unstable."

Translation: even Walmart, the company that thrives when people are scared, doesn't know how scared people are yet.

Markets shrugged. It was the kind of earnings report where the numbers barely matter because the outlook does all the talking. And the outlook said: buckle up.

The Fed's January meeting minutes dropped mid-week. The vibes were bad.

Base case: rates on hold. Futures markets showed a 6% chance of a March cut. But Fed officials acknowledged something nobody wanted to hear: rate hikes are back in the conversation if inflation stalls.

Governor Michael Barr argued that AI's infrastructure build-out could itself be inflationary. Not the deflationary miracle Silicon Valley's been selling you. Inflationary. As in: all those data centers need power, land, and labor, and they're bidding against everyone else for all three.

Minneapolis Fed President Kashkari offered a dovish counterpoint rates are "pretty close to neutral." But one dove doesn't make a spring.

The overall vibe from the Fed this week: we're watching. We're patient. And we are absolutely not done with this inflation problem.

Friday's PCE core confirmed their caution. It rose to 3.0% year over year from 2.8%.

If the Fed is a doctor, the patient just ate a cheeseburger on the way to the cardiologist. Then ordered fries.

Friday's headline event belongs in a civics textbook. Or a comedy special.

The Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump, striking down the president's authority to levy tariffs under IEEPA, the legal mechanism that underpins most active tariffs.

Over half of current tariffs are now in legal limbo.

Markets cheered. The S&P rose 0.7%.

Then Trump immediately vowed to impose a 10% global tariff under a different legal authority. Essentially, rebuilding the same wall through a different door.

Barclays analyst Pooja Sriram called it "a messy operational and legal overhang that amplifies economic uncertainty."

Less diplomatically: every company that spent 2025 restructuring supply chains, front-running tariffs, and pricing in policy certainty now gets to figure out which tariffs are real, which are refundable, and whether any of this was worth the PowerPoint decks they made about it.

Spoiler: it wasn't.

While domestic macro drama played out in committee rooms and courtrooms, the Middle East reminded everyone that geopolitics still knows how to move commodity prices with ruthless efficiency.

Trump signaled a potential decision on military action against Iran within 10 days. The US reportedly assembled its largest Middle East air presence since the Iraq invasion.

Oil posted its biggest single-day gain since October. Brent crude rose over 2% to nearly $72. WTI hit $66.

But gold was the real story.

It hit $5,027 per ounce intraday Friday, blowing past the $5,000 psychological barrier on a perfect storm of safe-haven buying, soft economic data, and tariff chaos.

Gold wobbled earlier in the week near $4,860 on thin liquidity. Then the late-week avalanche of bad news sent it roaring back.

At this point, gold is doing the financial equivalent of staying calm at a dinner party while everyone else argues about the check. Then quietly picking up the tab.

Housing data this week was a masterclass in contradictions.

Single-family starts rose 4.1% in December to 981,000 units. Sounds great. Until you realize that permits for future construction declined. And more than 30% of homebuilders are now offering price cuts to close deals.

Here's the kicker: data centers are now the housing market's villain. AI infrastructure spending means tech companies are outbidding residential homebuilders for undeveloped land. Directly displacing housing projects.

Your future home? It might be a server farm now. Congratulations. You've been outbid by a GPU cluster.

Mortgage rates dropped to their lowest in nearly four years. Good news for affordability in theory. In practice, affordability means nothing when the supply pipeline is being eaten by companies that need more electricity than some countries.

Oxford Economics' Nancy Vanden Houten: "We expect a gradual improvement in housing starts over the course of 2026, but that won't be apparent immediately."

Translation: don't cancel the rent check. Maybe ever.

Prediction markets are telling a story that the official data is only starting to confirm.

The overall betting market mood: cautiously not-recessionary, inflation-worried, and extremely unsure about tariffs.

Which is, honestly, the same mood as the rest of us.

Gold crossed $5,000 and didn't look back.

Record intraday: $5,027 on Friday. One analyst called it a "perfect storm" of systemic risk. That phrase gets overused. This time it might be undersold.

The path wasn't straight. Thin liquidity pushed gold to a weekly low near $4,860. Then buyers stepped back in aggressively as the macro picture darkened, with soft GDP, a PCE uptick, Middle East tensions, and the tariff ruling all piling on simultaneously.

The Fed's split committee kept real yields from rising too fast. Some banks are now forecasting $6,000 per ounce by year-end.

Eighteen months ago, that would've sounded absurd. Today it sounds like Tuesday.

For retail investors, gold's behavior this week wasn't a quirky commodity story. It was the market's collective verdict on the level of uncertainty.

The verdict: buy the shiny thing. Works every time. Probably.

The housing market is caught between a falling mortgage rate and a rising pile of structural problems. Lower rates should be a gift to buyers. Eventually. Maybe.

But the supply picture remains stubbornly difficult. Starts ticked up. Permits fell. Builders are cutting prices at rates not typically seen outside a slowdown.

The data center land-grab adds a layer of absurdity that only 2026 could produce. AI infrastructure is literally competing with residential construction for the same parcels, and tech companies' balance sheets make homebuilders look like they're bidding with Monopoly money.

Meanwhile, the broader affordability story hasn't changed. Older homeowners sit on compounded equity. Younger generations face crushing entry prices, stagnant wages, and the prospect of AI disrupting their careers.

Lower rates are necessary but not sufficient. Until supply meaningfully improves, the path to homeownership feels like a relay race where someone keeps moving the finish line.

And now the finish line has a data center on it.

Retail investors spent the week toggling between "is the AI correction a buying opportunity or a warning sign?", a debate that consumed financial social media without producing a satisfying answer. Which, of course, is what financial social media does best.

The institutional vibe was more clinical. Goldman Sachs data showing active funds outperforming at 2007-era rates is quietly reshaping how professionals think about concentration risk in passive index strategies.

Contrarian energy was building around "dumping Big Tech is finally a winning strategy." Twelve months ago, that was heresy. This week, it's close to a consensus.

Think about that. The trade that defined the last decade is becoming the trade people brag about exiting.

Sound familiar? It should. Every era ends the same way.

This week's market had the flavor of a meal that looked gorgeous on the menu: tariff relief! Gold records! Stock-pickers back in style! but arrived at the table slightly cold, with a side of GDP disappointment and PCE inflation that nobody ordered.

The aftertaste was geopolitics: an oil spike, an Iran ultimatum, and a gold bar sitting on the dessert cart at $5,027, reminding everyone that sometimes the most expensive thing on the menu is uncertainty itself.

Pair the week with something robust and slightly bitter. A big Barolo. Because what just happened deserves to be processed slowly, with time to breathe before you decide what to order next.

If this week had a thesis, it was this: nothing is as stable as it looked three weeks ago. And the market is starting to price that in with something resembling honesty.

A Supreme Court ruling that was supposed to bring tariff clarity instead opened a new chapter of uncertainty. Refund questions. Alternative authorities. A president who responded to a 6–3 ruling by announcing a new tariff. Because of course.

GDP growth of 1.4% with inflation of 3.0% isn't stagflation by textbook definition. But it's the kind of data that makes central bankers squint at their models and retail investors quietly Google "what is stagflation."

The real story underneath the noise is the rotation. Money is moving. Stock pickers are winning. Sectors long ignored are having their moment.

The Big Tech era isn't over. But it's no longer the only game in town.

And that's actually good news for anyone who remembers what diversification is supposed to feel like.