Theย S&P 500 Index ($SPX) (SPY)ย on Friday closed up +0.05%, the Dow Jones Industrial Average ($DOWI)ย (DIA) closed up +0.10%, and theย Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.18%.ย March E-mini S&P futures (ESH26) rose +0.03%, and March E-mini Nasdaq futures (NQH26) rose +0.14%.
Stock indexes recovered from early losses on Friday and settled higher.ย Fallingย bond yields were bullish for stocks on Friday after US January consumer prices rose less than expected, which may prompt the Fed to keep cutting interest rates.ย The 10-year T-note yield fell to a 2.25-month low of 4.05% on the tame inflation news.
Also, a recovery in software stocks was supportive of the overall market.ย However, metal companies retreated on reports that the Trump administration is working to narrow its tariffs on steel and aluminum products.ย
Stocks initially moved lower today,ย with the S&P 500 and Nasdaq 100 posting 1-week lows.ย Worries over AI weighed on stocks and dampened market sentiment.ย Concerns have surfaced that the latest tools released by Google, Anthropic, and other AI startups are already good enough to disrupt many sectors of the economy, including finance, logistics, software, and trucking.
US Jan CPI rose +2.4% y/y, weaker than expectations of +2.5% y/y and the smallest pace of increase in 7 months.ย Jan core CPI rose +2.5% y/y, right on expectations and the smallest pace of increase in 4.75 years.
Q4 earnings season is in full swing, as more than two-thirds of the S&P 500 companies have reported earnings results.ย Earnings have been a positive factor for stocks, with 76% of the 371 S&P 500 companies that have reported beating expectations.ย According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth.ย Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.
The markets are discounting a 10% chance…