Stocks Slide as CPI Inflation Cools More Than Expected

Feb 14, 2026, 2:34 AM

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US stocks lost steam heading into the close on Friday, posting weekly losses as Wall Street digested a cooler-than-expected inflation reading. The Consumer Price Index (CPI) showed that consumer prices increased by 0.2% in January from the previous month, and 2.4% on an annual basis, which was lower than analysts had anticipated.

The S&P 500 inched just above the flatline, while the Dow Jones Industrial Average closed up 0.1%. However, both the Dow and S&P 500 posted losses of more than 1% over the week, with the Nasdaq Composite falling more than 2% during the same period.

This latest inflation report is likely to influence expectations regarding the Federal Reserve's interest rate policies. Traders have begun to revive bets on a potential rate cut in June, with a significant portion anticipating a quarter-point reduction. Most forecasts still suggest two cuts by the end of 2026, although a growing number of traders are now betting on additional reductions.

The market's reaction was exacerbated by a day of heavy selling, as fears surrounding AI disruption spread into traditional sectors such as real estate and logistics, which were previously considered safe alternatives to tech stocks. Notably, all seven of the "Magnificent Seven" megacap tech stocks finished lower, contributing to the sharp weekly losses seen across major indices.

Investors are closely scrutinizing the latest earnings reports amid concerns about the impact of AI on various sectors. For instance, while shares of Applied Materials surged due to an optimistic outlook that reflected strong AI demand, Pinterest's stock tumbled after its revenue fell short of expectations, raising alarms about AI risks to its platform.

On a more positive note, Rivian's shares soared by over 25% following its fourth-quarter earnings beat, with the electric vehicle manufacturer announcing that its R2 midsize model is on track for delivery before the summer. Similarly, Moderna's stock surged 10% after it exceeded quarterly revenue estimates thanks to robust sales of its COVID-19 vaccine.

Overall, the combination of a cooler inflation report and the subsequent market reactions underscore the complexity of the current economic landscape, particularly as investors navigate the uncertain impacts of AI and evolving monetary policy.

As the market continues to respond to these economic indicators, traders and investors alike will be watching closely for further developments that could impact interest rates and stock valuations in the coming months.

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