Dear readers,
Superstition suggests that when the calendar hits Friday the 13th immediately following a market rout, you should hide under the desk.
On Thursday, the Dow Jones Industrial Average finally surrendered the historic 50,000 mark, ending a psychological run and leaving traders bracing for a sequel to the sell-off. The mood on the floor was set for a horror movie.
But this morning, the Bureau of Labor Statistics flipped the script.
Instead of a slash-and-burn session, investors received the one thing they needed most: permission to breathe. While the narrative surrounding Artificial Intelligence is currently undergoing a violent repricing, the macroeconomic backdrop just became significantly friendlier. We are ending the week in a market of two minds—terrified that the tech bubble is leaking, yet relieved that the cost of living is finally cooperating.
Here is what is driving the markets as we head into the weekend.
The Inflation Breather
If you were looking for a villain to blame for market volatility today, you won’t find it in the price of consumer goods. The Consumer Price Index (CPI) for January 2026, released this morning, rose 2.4% year-over-year.
This print arrived cooler than the consensus expectation of 2.5% and marks a distinct deceleration from December’s 2.7%.
Why it matters:
This report effectively removes the “stagflation” ghost story from the table. The data, which had been delayed by the recent government shutdown, confirms that the inflationary impulse is fading faster than anticipated.
* The Core: Core CPI (excluding volatile food and energy) settled at 2.5%, its lowest level since early 2021.
* The Fed Path: With inflation inching closer to the Federal Reserve’s 2% target, the argument for keeping rates restrictive is evaporating. The path for interest rate cuts this year is now wide open.
While stock futures remained hesitant immediately after the print, the macro implication is undeniable: The economy might be slowing, but prices are not spiraling.
Tech’s Trillion-Dollar Hangover
While the macro data is cooling, the tech sector is shivering. The narrative has shifted violently from “AI lifts all boats” to “AI is sinking the balance sheet.”
Thursday’s trading session was a bloodbath that spilled over into today’s sentiment. The S&P 500 fell 1.57% to close at 6,832.76, while the Nasdaq tumbled over 2%. The catalyst isn’t interest rates anymore; it is a growing panic that the massive capital expenditures on artificial intelligence aren’t yielding returns fast enough.
The Capex Shock:
Amazon has become the face of this anxiety. After announcing a staggering $200 billion in capital expenditures for 2026—$50 billion above Wall Street estimates—the stock has shed significant value. Investors are no longer rewarding ambition; they are punishing expense.
* The Big Tech Rout: By some estimates, the sector has erased over $1 trillion in value recently. Microsoft is down 16% year-to-date, and Apple has dropped 5%.
* The “Bubble” Echo: Analysts are increasingly drawing parallels to the dot-com era infrastructure build-out. The hardware is being purchased in record volumes, but the profitable use cases remain elusive.
* Real Estate Impact: The pain is physical, not just digital. CBRE shares dropped nearly 9% after management commented on the uncertain impact of AI on future office demand.
Crypto Winter 2.0?
If equity investors are nervous, crypto investors are looking for the exits. Bitcoin is currently testing critical support levels, trading in the $66,000 to $67,000 range—a stark departure from its October 2025 all-time high of ~$124,000.
The Liquidation Threat:
The concern now is structural. Analysts warn of a potential “liquidation spiral” if Bitcoin breaks decisively below $60,000, triggering forced selling.
* Coinbase Stumbles: The infrastructure players are bleeding alongside the assets. Coinbase reported a Q4 2025 net loss of $667 million yesterday. Despite generating $1.78 billion in revenue, the exchange was hammered by unrealized losses on its own crypto holdings and a sharp drop in retail engagement.
* Whale Watching: Bearish sentiment intensified after a “whale” wallet deposited over half a billion dollars worth of BTC onto Binance, a move typically interpreted as pre-positioning for a sale.
Political Theater: Tariffs and Shutdowns
Washington continues to provide a steady stream of background noise. In a symbolic but sharp rebuke, the House of Representatives voted 219-211 yesterday against President Trump’s steep tariffs on Canada. While the vote is unlikely to override a veto or pass the Senate, it highlights the growing bipartisan fatigue regarding the administration’s aggressive trade tactics.
Meanwhile, at the border:
A shutdown of the Department of Homeland Security seems all but certain today. The dispute centers on immigration enforcement policies, with Democrats demanding restrictions on ICE in exchange for funding.
On a brighter note for global commerce, the administration did finalize a deal with Taiwan today, lowering trade barriers and securing $250 billion in investments—a rare victory for globalization in an otherwise protectionist era.
The Takeaway:
We end the week in a paradoxical state. The “soft landing” for the broader economy looks more likely than ever thanks to today’s CPI data. However, the stock market’s engine—Big Tech—is sputtering under the weight of its own invoice. As we head into the weekend, the question for Monday isn’t about inflation anymore; it’s whether investors still believe the AI revolution is worth the upfront cost.
Have a great weekend, and stay safe out there.
StocksToday.com Editorial
