**” U.S. stock index futures declined modestly in pre-market trading amid lingering AI-related fears that triggered broad selling in technology and adjacent sectors yesterday, with traders now focused on January’s CPI data showing inflation cooled more than anticipated to 2.4% year-over-year, potentially supporting expectations for Federal Reserve rate cuts despite ongoing market volatility. “**
Stock Market Today: Dow, S&P 500, Nasdaq Futures Fall After AI-Stoked Sell-Off with CPI Inflation on Deck
Wall Street opened the trading day on a cautious note, with major index futures extending losses from the prior session’s pronounced downturn. The pullback reflected persistent unease stemming from fears that rapid advancements in artificial intelligence could upend traditional business models across multiple industries.
Thursday’s session saw heavy selling pressure, particularly in technology shares, as concerns about AI’s potential to disrupt software, financial services, real estate, logistics, and transportation sectors intensified. The so-called “Magnificent Seven” megacap stocks all closed lower, contributing to broader market weakness. This rotation away from high-growth AI-linked names hit “old economy” sectors previously viewed as relative safe havens, amplifying the decline.
Futures contracts reflected continued caution heading into Friday’s open:
Dow Jones Industrial Average futures declined around 0.3% to 0.6%, with levels hovering near 49,200 to 49,400 depending on the exact pre-market snapshot.
S&P 500 futures slipped approximately 0.2% to 0.5%, trading in the 6,820 to 6,850 range.
Nasdaq 100 futures fell more sharply, down 0.3% to 0.7%, signaling renewed pressure on tech-heavy names.
The sell-off has broader implications for market sentiment, as investors reassess the sustainability of the AI-driven rally that propelled indices to record highs earlier in the year. Fears center on whether massive investments in AI infrastructure will deliver proportional returns or lead to overcapacity and margin compression in affected industries.
Adding to the mix, the January CPI report provided some relief on the inflation front. Headline CPI rose 0.2% month-over-month and cooled to 2.4% year-over-year, down from 2.7% in December and below economist expectations for a milder slowdown. Core CPI, excluding volatile food and energy components, eased to 2.5% annually—the lowest since early 2021. This reading reinforces bets that the Federal Reserve maintains flexibility for multiple rate cuts in the coming year, though recent strong employment data has tempered aggressive easing expectations.
Bond yields reacted positively to the softer inflation print, declining and offering some support to equities by reducing borrowing costs and making growth stocks relatively more attractive. However, the AI disruption narrative continues to dominate, with spillover effects evident in sectors far removed from direct tech exposure.
Key Sector Impacts from Recent AI Concerns
Technology and Software : Megacaps bore the brunt, with sharp declines in names tied to cloud computing and enterprise software as worries mount over AI tools potentially cannibalizing traditional revenue streams.
Real Estate (Office Segment) : Stocks in commercial real estate tumbled further amid speculation that AI-driven efficiencies could accelerate remote work trends and reduce demand for physical office space.
Logistics and Trucking : Transportation names weakened on reports of AI-powered freight optimization tools that could disrupt established players.
Semiconductor and AI Infrastructure Plays : Mixed performance here, with some hardware providers benefiting from ongoing data center demand despite broader tech weakness.
Notable Movers in Early Trading
Several companies reported earnings that provided pockets of strength amid the gloom. Semiconductor equipment giant Applied Materials surged on better-than-expected results fueled by AI chip demand. Networking firm Arista Networks also posted gains after strong quarterly figures tied to data center expansion.
Conversely, consumer-facing and discretionary names faced pressure, with some platforms seeing steep drops on underwhelming guidance.
Broader Market Context
The week’s performance leaves major indices on track for losses. The S&P 500 and Dow are positioned for declines exceeding 1% week-to-date, while the Nasdaq faces steeper weekly erosion around 2%. This marks a shift from the optimism that characterized much of the prior period, where AI enthusiasm drove valuations higher.
Traders remain attuned to any signs of whether the AI disruption fears represent a short-term overreaction or a more fundamental reassessment of growth prospects. With Federal Reserve policy likely to stay data-dependent, upcoming economic releases and corporate earnings will continue to shape direction.
Disclaimer : This is general market commentary based on publicly available information and is not investment advice, financial guidance, or a recommendation to buy or sell any securities.
