The Dow Jones Industrial Average (DJIA) rebounded on Friday, gaining approximately 220 points to trade near 49,665 after opening at 49,366. This recovery follows a sharp 669-point selloff on Thursday, triggered by fears of AI-driven disruption in sectors like software, trucking, and real estate. While the S&P 500 edged higher, the Nasdaq Composite showed mixed results as investors assessed a cooler-than-expected Consumer Price Index (CPI) report and a wave of after-hours earnings. Despite Friday’s gains, all three major indexes are on track for weekly losses, with the S&P 500 poised for its worst performance since November.
Inflation Data Shifts Rate Expectations The Bureau of Labor Statistics reported a 0.2% MoM rise in January CPI, below the 0.3% forecast. Annual headline inflation decelerated to 2.4%, missing the 2.5% estimate and down from December’s 2.7%. Core CPI matched expectations at 0.3% MoM and 2.5% YoY. This softer data has significantly altered rate cut expectations. The CME FedWatch Tool now indicates an 83% probability of a June rate cut, a sharp increase from below 50% just days prior. Markets are pricing in around 63 basis points of easing for 2026, implying a roughly 50% chance of a third cut by December. This data is particularly significant ahead of the Federal Reserve’s leadership transition, with Kevin Warsh expected to succeed Jerome Powell in May.
Stock Movers: AI & Earnings Focus
- Applied Materials (AMAT): Surged ~12% on strong Q1 earnings ($2.38 EPS on $7.01B revenue), driven by AI-related semiconductor equipment demand. The company forecasts over 20% growth in its equipment business for the year.
- Rivian Automotive (RIVN): Rocketed over 20% after narrowing losses and issuing strong 2026 delivery guidance of 62K–67K vehicles (47%–59% growth vs. 2025).
- Roku (ROKU): Gained ~10% on a Q4 beat and bullish 2026 revenue guidance of $5.5B.
- Pinterest (PINS): Plunged over 20% on disappointing Q4 results and weak Q1 revenue guidance ($951M–$971M), prompting a downgrade from Baird.
- DraftKings (DKNG): Dropped ~17% as 2026 revenue guidance ($6.5B–$6.9B) fell short of Wall Street estimates ($7.31B), highlighting a divergence between AI hardware strength and consumer platform weakness.
Technical Outlook The DJIA opened at 49,366 and reached an intraday high of 49,670, trading near 49,665 in the afternoon. The index remains above its 50-day EMA (48,852) and 200-day EMA (46,472). The stochastic oscillator is reading 73.67/76.23, nearing overbought territory. Immediate resistance is at the recent swing high of 50,509, with support at Friday’s low of 49,092. A move above 50,000 would signal bullish control, while a drop below 49,000 could lead to a test of the 48,800–48,900 zone.
