The S&P 500 and the DOW were little changed on Friday, while the Nasdaq Composite added 0.2%, leaving the major averages around 1.5% lower for the week, as a softer-than-expected January inflation report failed to revive risk appetite amid persistent AI-related volatility. The headline inflation and core inflation rates eased as expected, maintaining market bets that the Federal Reserve will cut rates multiple times this year. Chipmakers and megacap tech names including Nvidia (-2.2%), Apple (-2.3%), Alphabet (-1.1%), Meta (-1.6%), and Broadcom (-1.8%) remained under pressure amid renewed scrutiny over the sustainability of datacenter capital expenditure, keeping a lid on broader gains. Software names such as Salesforce (2.3%) and Oracle (2.3%) advanced, while Applied Materials (8.1%) and Arista Networks (4.8%) surged after upbeat earnings.
India's BSE Sensex closed roughly 1.3% lower at 82,626.8 on Friday, the lowest since early February, marking the third straight session of declines. The selloff in IT stocks deepened, amid rising fears of AI-related disruption and fading expectations of US rate cuts in the near-term. As companies across the globe invest in AI automation, there are fears that outsourcing demand could weaken, affecting earnings for Indian IT stocks. Tata Consultancy Services, BEL, Infosys and HCL Technologies saw losses up to 2%. All other sectors also traded in the red, including metals, consumer durables, auto stocks, and financials. On the domestic data front, the latest data showed January inflation exceeded forecasts, marking the first reading within the RBI’s 2%–4% tolerance band since last August, dampening expectations of an interest rate cut at the upcoming meeting. For the week, the index posted a 1.1% decline.
