U.S. stocks fluctuated between modest gains and losses on Friday, while Treasury yields moved lower after fresh data showed inflation cooled in January.
By 10:39 ET (15:39 GMT), the S&P 500 was up 0.2% at 6,844.95, the Dow Jones Industrial Average gained 0.3% to 49,581.38, and the Nasdaq Composite was largely unchanged at 22,589.35.
U.S. Inflation Slows in January
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 2.4% year-over-year in January, below expectations of 2.5% and down from December’s 2.7% reading. On a monthly basis, headline CPI increased 0.2%, also softer than the projected 0.3%.
Core CPI, which excludes food and energy, met forecasts on both monthly and annual measures.
The softer inflation reading follows a stronger-than-expected nonfarm payrolls report earlier in the week. After the CPI data, traders slightly increased their expectations for Federal Reserve rate cuts later this year, according to the CME FedWatch tool.
Market strategists noted that easing inflation supports the case for potential rate reductions, particularly as price pressures continue to move closer to the Fed’s 2% target. Interest-rate sensitive sectors such as small-cap stocks, real estate, and utilities could benefit if borrowing costs decline.
Treasury Yields Decline
U.S. Treasury yields fell after the CPI release as investors bought bonds. The benchmark 10-year yield dropped 4 basis points to 4.061%, while the more rate-sensitive 2-year yield slipped 5 basis points to 3.418%.
Technology Stocks Remain in Focus
Technology shares remained under close watch following Thursday’s sharp selloff driven by concerns about artificial intelligence-related disruptions. The Nasdaq had fallen 2% in the previous session, while the S&P 500 dropped nearly 1.6% and the Dow lost about 670 points.
Analysts suggested that, while interest rate expectations remain important, markets are increasingly focused on the broader impact of AI across multiple industries.
Despite recent volatility, strategists believe the broader bull market could remain intact as long as economic growth continues, the labor market remains stable, and inflation gradually eases.
Earnings Drive Individual Stock Moves
Several major technology companies reported earnings after Thursday’s close.
Applied Materials surged after issuing a strong forecast, highlighting robust demand fueled by artificial intelligence investments and ongoing memory chip shortages.
Arista Networks also advanced after reaffirming its full-year gross margin guidance despite rising memory costs.
In contrast, Pinterest shares fell after the company projected first-quarter revenue below expectations, citing softer advertising demand from retailers and competitive pressures.
Airbnb shares gained after the travel platform exceeded quarterly revenue estimates and signaled continued strength in travel demand.
Gold and Oil Markets
Gold prices rose in European trading, recovering part of Thursday’s losses amid uncertainty around U.S. interest rates. Safe-haven demand increased following reports that the U.S. may deploy a second aircraft carrier, the USS Gerald R. Ford, to the Middle East as nuclear talks with Iran stalled.
Spot gold climbed 1.8% to $5,010.52 per ounce, while gold futures gained 1.7% to $5,028.70 per ounce.
Oil prices were mixed and remained on track for weekly losses. Brent crude edged up 0.2% to $67.65 per barrel, while U.S. West Texas Intermediate slipped 0.1% to $62.80. Both contracts had fallen nearly 3% in the previous session amid expectations of rising supply and easing geopolitical risks.
