Dow, S&P 500, Nasdaq Cap Losses as Jan CPI Cools; AI Fears Drive Fed Cut Bets

Friday's closing trade saw gains expire as stocks capitulated to post weekly declines, tempered by a January CPI reading that cooled inflation. The S&P 500 (^GSPC) ended slightly flat; the Dow Jones Industrial Average (^DJI) gained 0.1%, and the Nasdaq Composite (^IXIC) fell 0.2%. The Dow and S&P 500 lost more than 1% for the week, while the Nasdaq declined over 2%. Data showed a 0.2% monthly price rise and 2.4% annual inflation, shifting expectations for Federal Reserve policy. A majority of traders now anticipate a June 25-point cut, with two cuts by year-end still likely, though the probability of additional reductions is rising. Fears of AI disruption pressured "old economy" sectors and tech, with all seven Magnificent Seven megacaps lower. Applied Materials (AMAT) outperformed with a robust AI outlook, while Pinterest (PINS) fell on softer revenue and AI-related risks. Rivian (RIVN) surged over 25% on better-than-expected Q4 results and delivery readiness of the R2; Moderna (MRNA) rose 10% on stronger-than-estimated quarterly sales of its Covid vaccine.