The S&P 500 Index ($SPX) (SPY) on Friday closed down -0.43%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -1.05%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.30%. March E-mini S&P futures (ESH26) fell -0.47%, and March E-mini Nasdaq futures (NQH26) fell -0.38%.
Stock indexes on Friday added to Thursday’s losses, with the Dow Jones Industrial Average falling to a 3.5-week low as the disruptive potential of AI weighed on markets. Bank stocks tumbled on Friday as the collapse of the UK’s private lender Market Financial Solutions Ltd added to fears that banks could face rising defaults. Also, the weakness in software companies and cybersecurity stocks weighed on the broader market. In addition, stocks fell after the US Jan PPI report rose more than expected, dampening any speculation that the Fed would cut interest rates in the near term.
Stock indexes recovered from their worst levels on Friday after the Feb MNI Chicago PMI and Dec construction spending reports rose more than expected, which are signs of economic strength. Also, Dell Technologies surged more than +21% following a strong sales forecast for its AI servers. In addition, lower bond yields are supportive of stocks as the 10-year T-note yield fell to a 4-month low Friday at 3.96%.
US Jan PPI final demand rose +0.5% m/m and +2.9% y/y, stronger than expectations of +0.3% m/m and +2.6% y/y. Jan PPI ex-food and energy rose +3.6% y/y, stronger than expectations of +3.0% y/y and the largest increase in 10 months.
The US Feb MNI Chicago PMI unexpectedly rose by 3.7 points to 57.7, stronger than expectations of a decline to 52.1 and the fastest pace of expansion in 3.75 years.
US Dec construction spending rose +0.3% m/m, stronger than expectations of +0.2% m/m.
Geopolitical risks remain a negative for stocks. WTI crude oil (CLJ26) rallied more than +2% to a 7-month high on Friday after President Trump sounded downbeat about diplomatic talks with Iran, saying, “They cannot have nuclear weapons, and we’re not thrilled with the way…
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