NEWS AND INSIGHTS | INSIGHTS

CIO Notebook: January CPI In Line as Investors Focus on AI

February 13, 2026
Shannon Saccocia, CFA, Chief Investment Officer - Wealth

The market’s focus is shifting from near-term Fed timing toward AI-driven services disintermediation, creating volatility and what we see as indiscriminate selling that may open entry points in high-quality firms as valuations compress.

U.S. core CPI for the month of January was in line both month-over-month (MoM) at +0.3% and year-over-year (YoY) at +2.5%. Headline CPI was slightly cooler than expected, up +0.2% MoM versus +0.3% and up +2.4% YoY versus +2.5%.

Shelter prices rose by +0.2%, as food prices moderated, up only +0.2% versus +0.7% MoM in December. Energy prices were lower by -1.5% in the month, despite the cold weather gripping much of the United States, with gasoline prices down -3.2%. Used cars and trucks also posted a notable decline of -1.8%. Services were up by +0.4%. While admittedly an unwelcome reacceleration, transportation was a meaningful driver of the reading, with airfares alone up by +6.5%.

With both jobs and CPI data released this week, one could expect the narrative to center around the next move for the Fed. (Please click here to view Wednesday’s CIO Notebook on employment.) However, investors are increasingly focusing instead on the impacts of AI, namely, the disintermediation of services businesses. Rolling weakness across industries – beginning with software, then migrating to financial services, insurance, real estate services, and transports – has put investors on edge. While we acknowledge that it is difficult to determine the full impact over the next several years on services businesses, the indiscriminate selling of quality businesses with definable competitive advantage in multiple business lines represents an opportunity to assess and potentially invest in these businesses on the basis of their fundamentals, especially as valuations compress. Given the transformative nature of AI, we anticipate that there will be winners and losers, and the evaluation of how companies are positioning to reap the benefits of innovation is to us the most important variable in the equation.

It also bears worth noting that there is clear evidence of a rotation to more cyclical parts of the economy, which would be supported by the continued economic reacceleration we anticipate. As of last night’s close, seven of the eleven S&P 500 sectors are outperforming the broad benchmark – that number was three in 2025. U.S. small caps, as well as developed ex. U.S. and emerging markets stocks are also performing well to begin the year. As such, we remain focused on a combination of thoughtful diversification across geography and asset class, while at the same time digging into the underlying equity and credit investments to ensure we understand the potential pressures that AI could put on the businesses. While it can be difficult to step into positions during periods such as the last several weeks, robust fundamental analysis and deep sector and industry understanding can provide the necessary confidence to turn risks into opportunities.

MUNICIPAL BASIS POINTS

Buckle Up

January 22, 2026

IMPORTANT INFORMATION:

This material is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. This material is general in nature and is not directed to any category of investors and should not be regarded as individualized, a recommendation, investment advice or a suggestion to engage in or refrain from any investment-related course of action. Any views or opinions expressed may not reflect those of the firm as a whole. Neuberger Berman products and services may not be available in all jurisdictions or to all client types. Diversification does not guarantee profit or protect against loss in declining markets. Investing entails risks, including possible loss of principal. Investments in private equity are speculative and involve a higher degree of risk than more traditional investments. Investments in private equity are intended for sophisticated investors only. Unless otherwise indicated, returns shown reflect reinvestment of dividends and distributions. Indexes are unmanaged and are not available for direct investment. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.

Portfolio positioning views expressed herein are those of Neuberger Berman’s Private Wealth Investment Group, which may include those of the Neuberger Berman’s Asset Allocation Committee. Asset allocation and positioning views are based on a hypothetical reference portfolio. The Private Wealth Investment Group analyzes market and economic indicators to develop asset allocation strategies. The Private Wealth Investment Group works in partnership with the Office of the CIO. The Private Wealth Investment Group also consults regularly with portfolio managers and investment officers across the firm. The Asset Allocation Committee is comprised of professionals across multiple disciplines, including equity and fixed income strategists and portfolio managers. The Asset Allocation Committee reviews and sets long-term asset allocation models, establishes preferred near-term tactical asset class allocations and, upon request, reviews asset allocations for large, diversified mandates. Asset Allocation Committee members are polled on asset classes and the positional views are representative of an Asset Allocation Committee consensus. The views of the Asset Allocation Committee and the Private Wealth Investment Group may not reflect the views of the firm as a whole and Neuberger Berman advisers and portfolio managers may take contrary positions to the views of the Asset Allocation Committee or the Private Wealth Investment Group. The Asset Allocation Committee and the Private Wealth Investment Group views do not constitute a prediction or projection of future events or future market behavior. Defensive positioning generally means an underweight bias on allocations to risk assets such as equities and alternatives. Positioning views may change over time without notice and actual client positioning may vary significantly. Discussion of yield characteristics or total returns of different asset classes are for illustrative purposes only. Such asset classes, such as equities and fixed income, may have significantly different overall risk-return characteristics which should be consider before investing.

The information in this material may contain projections, market outlooks or other forward-looking statements regarding future events, including economic, asset class and market outlooks or expectations, and is only current as of the date indicated. There is no assurance that such events, outlook and expectations will be achieved, and actual results may be significantly different than that shown here. The duration and characteristics of past market/economic cycles and market behavior, including any bull/bear markets, is no indication of the duration and characteristics of any current or future be market/economic cycles or behavior. Information on historical observations about asset or sub-asset classes is not intended to represent or predict future events. Historical trends do not imply, forecast or guarantee future results. Information is based on current views and market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons.

Discussions of any specific sectors and companies are for informational purposes only. This material is not intended as a formal research report and should not be relied upon as a basis for making an investment decision. The firm, its employees and advisory accounts may hold positions of any companies discussed. Nothing herein constitutes a recommendation to buy, sell or hold a security. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. Investment decisions and the appropriateness of this content should be made based on an investor's individual objectives and circumstances and in consultation with his or her advisors.

Neuberger Berman Investment Advisers LLC is a registered investment adviser.

The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC.