Overview
The U.S. stock market ended the day with a mixed performance. While there were expectations that slowing inflation might lead to a rate cut by the Federal Reserve, apprehensions about AI potentially restructuring some industries kept the indices under pressure.
| Nasdaq Composite | S&P 500 |
| Dow Jones Industrial Average | 1 South Korean won equals |
A Major News Story
This week, the market was significantly perturbed by fears around the restructuring of industries due to AI. Selling pressure that began in the software sector spread to real estate, transportation, and financial services sectors. Financial stocks like Charles Schwab and Morgan Stanley dropped by 10.8% and 4.9% respectively, while software company Workday fell by 11%. Commercial real estate firm 12Ario also saw a sharp 16% decline during the week.
Meanwhile, the Consumer Price Index rose by just 0.2% from the previous month, marking the smallest increase since July of last year. This modest rise was attributed to falling energy prices that helped curb inflation. Although service prices saw some increase, core goods prices remained stable. Notably, the year-over-year increase in core CPI was the lowest since 2021, and the overall inflation rate has been moderating.
Tomorrow's Economic Indicators
| Release Time | Details |
|---|---|
| Undefined | There are no upcoming economic indicator releases or lack of information. |
General Opinion
Market experts are divided in their assessments. While some, like STV-Wire's analyst at BK Financial, acknowledge lingering concerns, they also note overall downtrends in inflation. The Federal Reserve is currently holding rates steady, but following the trend seen in 2021, some analysts anticipate a slight reduction in rates. SM Haysa of Pressplace Management opines that the recent inflation data has provided some relief. If inflation remains stable, the Fed might maintain rates, and if a more pronounced decrease in inflation is seen later in the year, the possibility for rate cuts could reopen.
However, as pointed out by Alver Cor's Kristen, despite inflation fears subsiding in January, the robust employment figures might not provide enough justification for immediate rate cuts by the Fed.
