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Markets Stabilize After AI Selloff, Inflation Slows
14 Feb
Summary
- Major stock indexes ended mixed on Friday, showing stabilization post-AI selloff.
- Consumer price growth slowed to an annual pace of 2.4% in January.
- Ten-year Treasury yields declined significantly over the past week.
Stock indexes showed signs of stabilization on Friday, recovering slightly from an artificial intelligence-driven selloff experienced in the previous session. Despite the late-week rebound, all three major benchmarks concluded the week with losses, with the Nasdaq composite recording the steepest decline. For the week, the Dow industrials decreased by 1.2%, the S&P 500 retreated by 1.4%, and the Nasdaq dropped by 2.1%.
Encouragingly, new economic data released on Friday indicated a slight slowdown in inflation. Consumer-price growth eased to an annual rate of 2.4% in January, falling below economists' expectations of 2.5%. This deceleration was partly attributed to falling gasoline prices and reduced costs for used cars and trucks. However, the core inflation rate, excluding volatile food and energy prices, remained steady at 2.5%, matching forecasts.
In response to the inflation data, ten-year Treasury yields decreased, closing at 4.055%. This marks a significant decline from the previous week's 4.205%, representing the largest weekly drop since August. Global markets also experienced mixed movements, with Asian stocks selling off, European indexes trading unevenly, and Bitcoin prices climbing approximately 5%.
