By Christopher Kevin Combs, Chief Investment Officer, Silicon Valley Capital Partners
February 5, 2026
After living through each of the market’s panics over the past decade, I’ve come to expect one persistent pattern: selloffs rarely begin with numbers, they begin with a narrative. And more often than not, that narrative is wrong.
We’ve seen this pattern enough times to recognize it.
The 2018 combination of interest rate hikes, balance sheet reduction, and hawkish communication by new Fed Chairman Powell that triggered a sharp market selloff, which quickly recovered in early 2019 when the Fed reversed its policy stance.
The early 2020 fears that COVID-19 could cause up to 5,000 deaths per day that fueled expectations of a severe economic collapse.
The 2022 drumbeat that margin compression and inflation would force an unavoidable downturn.
The 2023 Silicon Valley Bank episode that briefly convinced investors the entire regional banking system was on the brink of collapse.
The 2025 “DeepSeek moment” that triggered the early-cycle belief that advanced AI wouldn’t require massive compute and power.
And more recently, the claim that the 2025 tariff “liberation day” would unleash hyperinflation and crush the consumer.
Yet even as these stories cycled through, the underlying micro picture has remained surprisingly stable. Revenue trajectories appear intact. Earnings trajectories appear intact. Forward expectations for 2026 and 2027 across many sectors remain constructive, even resilient.
In truth, today’s market feels heavy not because corporate performance is faltering, but because there are several false narratives paired with an unfortunate monetary‑policy data vacuum. Whenever the Fed provides less clarity than the market wants, fear fills the empty space. Speculation becomes certainty. Certainty becomes positioning. Positioning becomes fragility.
So to understand the moment we are in, we have to hold false narratives in one hand and more realistic, grounded narratives in the other, and examine the gap between the two.
The Dollar: The Story vs. The Reality
In one hand: the false narrative that the U.S. dollar has entered permanent decline.
Capital has rushed toward anything that fits the post‑dollar storyline, EM, commodities, and non‑U.S. equities.
In the other hand: the reality that cyclical weakness is not structural deterioration.
The U.S. still outgrows developed peers, remains the deepest capital market in the world, and anchors the AI and digital-infrastructure cycle.
A crowded short-dollar positioning can reverse violently without a single macro print changing.
AI: Bubble Talk vs. Actual Investment Cycles
In one hand: the false narrative that AI is just another bubble destined to burst.
In the other hand: the reality that this is a capital cycle driven by physical buildout.
Data centers, power generation, networking, and semiconductor capacity, these are long-duration assets financed by hyperscalers, governments, and enterprises with multiyear demand visibility.
Speculation exists, but only at the edges. The foundation is real, heavy, and economically meaningful.
Software: Fear of Collapse vs. Economic Reinvention
In one hand: the false narrative that AI will render SaaS obsolete.
In the other hand: the reality that AI is reshaping software economics, not eliminating them.
Lightweight, feature-centric tools are vulnerable.
Deeply embedded systems, regulated workflows, proprietary data, enterprise integration, remain durable.
The business model shifts from per-seat pricing to value-based outcomes.
This is transformation, not extinction.
The Federal Reserve: Misread Intent vs. Practical Discipline
In one hand: the false narrative that a credibility‑focused Fed is anti-growth and anti-risk.
In the other hand: the reality that discipline is the prerequisite for durable growth.
Positive real rates don’t kill expansions, they prevent debt-driven boom‑bust cycles.
Credibility anchors inflation expectations and keeps the currency stable.
Markets suffer not when the Fed is disciplined, but when investors assume it won’t be.
Foreign Flows: Headlines vs. Underlying Structure
In one hand: the false narrative that foreign governments are dumping dollars.
In the other hand: the reality that diversification isn’t departure.
Central banks are adjusting composition at the margins, not breaking from the dollar system.
Meanwhile, private flows, far larger and stickier, still prefer U.S. markets for liquidity, governance, and innovation.
Dollar dominance remains intact beneath the headline noise.
Inflation: Simplistic Fears vs. the Real Economy
In one hand: the false narrative that tariffs and FX swings automatically create runaway inflation.
In the other hand: the reality that price shocks disperse unevenly.
Some sectors inflate. Others offset through productivity, margin compression, or substitution.
Consumers adapt. Supply chains realign.
And over the long arc, AI is inherently disinflationary.
Inflation becomes more volatile, not necessarily more dangerous.
The Larger Shift: From Liquidity to Allocation
If today’s narratives feel brittle, it’s because they are symptoms of a deeper regime shift. We are leaving an era driven by abundant liquidity and entering one where capital allocation, productivity, and real returns determine outcomes.
Narratives still move markets, but their expiration date is shortening.
Fundamentals matter again.
Cash flow matters again.
Balance sheets and execution matter again.
This is not a hostile environment.
It is simply one that demands a higher standard of discipline, and a willingness to distinguish between the stories investors tell themselves and the reality unfolding beneath them.