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AI Selloff Cools as Investors Await Inflation Data
13 Feb
Summary
- US stock futures traded flat after an AI-driven selloff.
- Investors are awaiting crucial inflation data for Fed rate cut clues.
- AI capex outlays are a dominant theme for major tech companies.
U.S. stock index futures traded flat on Friday, reflecting a pause after an AI-led selloff that impacted sectors beyond software. Investors are adopting a cautious approach, awaiting the release of crucial inflation data that could shape the Federal Reserve's interest rate outlook.
The Consumer Price Index report for January is anticipated to show steady price increases. This data follows a stronger-than-expected jobs report, which heightened concerns about the Fed potentially delaying rate cuts. Despite these worries, Fed fund futures indicate a 70% probability of a June rate cut.
Sectors related to artificial intelligence are under scrutiny, with investors demanding clear payoffs from substantial capital expenditures. Companies like Applied Materials and Arista Networks saw significant gains pre-market due to strong forecasts. Nvidia's upcoming earnings will be a key test for the AI trade.
In trade developments, the U.S. and Taiwan finalized a reciprocal agreement impacting import levies. Additionally, reports suggest potential adjustments to steel and aluminum tariffs by the U.S.
