Grab this: the market’s turbulence is drawing attention as traders brace for a pivotal inflation update. S&P 500 futures ticked up slightly after a rough session for U.S. equities, with market participants sharpening their focus on Friday’s key consumer price index release.
What happened next? S&P 500 futures rose about 0.2%, while Nasdaq 100 futures gained 0.3%. Dow futures added around 37 points, roughly 0.07%. In after-hours trading, Applied Materials surged about 11% on strong earnings and an upbeat outlook. Airbnb advanced roughly 2% as investors cheered its positive guidance, whereas Pinterest slid about 14% after a weak Q4 and subdued forecast.
Why the drop elsewhere? Major indices closed lower as worries about how artificial intelligence could disrupt various sectors weighed on sentiment. Real estate, trucking and logistics, and software shares were hit hardest. The S&P 500 slipped about 1.6%, the Nasdaq roughly 2%, and the Dow dropped nearly 670 points (about 1.3%). Even the so-called Magnificent Seven saw red, with Cisco down 12% after disappointing guidance and Apple giving up around 5% for its worst single-day drop since April 2025.
Experts weigh in. Brian Levitt, global market strategist at Invesco, said, “In terms of an AI bubble, there’s some steam coming out of certain names as the market tries to determine winners and losers and becomes more selective.” Yet he notes that the broader market remains relatively resilient, with the Dow flirting with 50,000 and the S&P near 6,900. The takeaway: there’s volatility beneath the surface, but this isn’t a textbook AI bubble—yet.
Looking ahead. The market awaits Friday’s CPI report for January, which economists polled by Dow Jones expect to show a 2.5% year-over-year rise and a 0.3% month-over-month increase. If the data confirm a cooler inflation path, more risk assets could stage a bounce; if not, further pressure could emerge.
After-hours movers recap. Applied Materials jumped about 11% on blowout earnings — $2.38 per share on $7.01 billion revenue, topping estimates. Coinbase rose close to 2% as it reported 2025 volumes of $5.2 trillion and subscription/services revenue of $2.8 billion, even though Q4 revenue missed some forecasts. Rivian jumped around 14% after forecasting 2026 deliveries of 62,000–67,000 units and showing narrower losses than expected, with Q4 revenue beating estimates.
Bottom line. The market is navigating a delicate balance between growth optimism tied to AI-adjacent winners and the price pressures inflation data could intensify. Contenders and contrarians alike will be watching Friday’s CPI as a potential trigger for the next leg of moves.
What do you think: will inflation cool enough to fuel a sustained rally, or do you foresee more headaches ahead for big tech and related sectors? Share your thoughts in the comments.
