Stock Market Faces Challenges as AI Concerns and CPI Data Loom

Feb 14, 2026, 2:29 AM

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US stock markets experienced turbulence on Friday, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all struggling amid fears of artificial intelligence (AI) disruptions. This sell-off came as investors awaited crucial Consumer Price Index (CPI) data that could shape monetary policy in the coming months.

The S&P 500 inched slightly above the flatline, while the Dow managed a modest gain of 0.1%. Conversely, the tech-heavy Nasdaq Composite saw a decline of 0.2%. Over the week, however, the Dow and S&P 500 reported losses exceeding 1%, with the Nasdaq dropping more than 2%.

Data released by the Bureau of Labor Statistics earlier showed that inflation cooled more than expected in January, with the Consumer Price Index rising by only 0.2% from the previous month and 2.4% on an annual basis. This report has led traders to reassess their expectations for Federal Reserve interest rate policies, with many now anticipating potential cuts by June. While a majority still expect two cuts by the end of 2026, the market sentiment indicates an increasing probability of more reductions soon.

The recent market decline can be traced back to a significant sell-off driven by fears of AI's disruptive potential across various sectors, particularly those traditionally viewed as stable such as real estate, logistics, and transportation. Notably, all seven of the "Magnificent Seven" tech stocks, which include some of the largest companies in the sector, finished lower amid this downturn.

Investors are closely monitoring corporate earnings to gauge the impact of AI on business performance. For instance, Applied Materials, a key player in semiconductor manufacturing, saw its stock surge following a positive earnings report that highlighted strong demand driven by AI technologies. In contrast, Pinterest's shares plummeted after the company reported revenue below expectations, raising concerns about AI's impact on its advertising model.

In the electric vehicle sector, Rivian's stock jumped by over 25% after the company beat quarterly earnings estimates and confirmed that its new R2 midsize model is on track for summer delivery. Meanwhile, biotechnology firm Moderna also saw a 10% increase in its stock price after reporting better-than-expected quarterly revenues, largely due to ongoing demand for its COVID-19 vaccine.

As this week progresses, market participants are keenly awaiting further economic indicators, particularly the upcoming CPI data, which is expected to have significant implications for interest rate adjustments by the Federal Reserve. The potential for a shift in monetary policy adds another layer of complexity to an already volatile market environment dominated by technology and AI-related concerns.

Overall, the combination of AI-driven market anxieties and inflation data on the horizon has created a challenging landscape for investors, prompting a re-evaluation of strategies moving forward. With the market's trajectory uncertain, stakeholders are advised to remain vigilant as they navigate through these unpredictable conditions.

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