Wall Street finished Friday with a modest close: the Dow edged up 0.1%, the S&P 500 held just above the flat line, while the Nasdaq slipped 0.2%. Despite the tiny gains on the day, the week’s trend was bleak—both the Dow and the S&P 500 have fallen more than 1% from the start of the month, and the Nasdaq has dropped over 2%.
The recent dip comes as the latest inflation report shows a cooler-than-expected January. The Consumer Price Index rose 0.2% from the month before and 2.4% year‑over‑year, easing pressure on the Federal Reserve’s policy outlook. Many traders now favor a June rate cut, with most betting on a quarter‑point reduction, and they still expect two cuts by the end of 2026, although a larger share is now leaning toward additional cuts.
Across the board, fears that artificial intelligence could disrupt traditional industries have spilled into real estate, logistics and transportation, pulling in so‑called “old‑economy” names that investors had previously seen as safe havens. Tech stocks took a hit, with all seven of the “Magnificent Seven” megacap names finishing lower, contributing to the steep weekly declines.
On the earnings front, Applied Materials rallied after the chip‑toolmaker signaled robust demand tied to AI, while Pinterest shares fell sharply as revenue missed expectations and analysts raised concerns about AI’s impact on its discovery platform. Rivian’s stock surged more than 25% following a fourth‑quarter earnings beat, and Moderna jumped 10% after topping revenue estimates thanks to steady sales of its Covid‑19 vaccine.
Other market moves added to the day’s drama: Bitcoin rebounded roughly 5% after a softer inflation print and renewed hopes for crypto legislation, Nvidia shares slipped slightly despite a broader market rebound, and Coinbase reported a significant quarterly loss, prompting its CEO to reassure investors on the earnings call.
With inflation easing, AI fears persisting, and Fed policy still uncertain, investors are navigating a complex mix of risks and opportunities. The market’s small gains on Friday may be a brief respite before the week’s broader negative trend continues.
