US markets finished narrowly mixed on Friday after a closely watched inflation report came in slightly softer than expected but failed to trigger a sustained advance.
The S&P 500 edged up 0.05 per cent to close at 6,836.17. The Dow Jones Industrial Average added 48.95 points, or 0.10 per cent, to settle at 49,500.93. The Nasdaq Composite slipped 0.22 per cent to 22,546.67.
Inflation cools, but caution remains
The Bureau of Labor Statistics reported that the consumer price index rose 0.2 per cent in January, below expectations of a 0.3 per cent monthly increase. On an annual basis, inflation came in at 2.4 per cent, slightly under forecasts of 2.5 per cent.
Core CPI, which strips out food and energy, rose 0.3 per cent for the month and 2.5 per cent year over year, in line with expectations.
The softer headline figure reinforced hopes that inflation may be gradually moderating, potentially opening the door to lower interest rates if the trend continues. However, markets treated the data cautiously, viewing it as only a single data point rather than a definitive shift.
AI disruption fears widen
Beyond inflation, investor anxiety around artificial intelligence continued to ripple through markets last week.
Selling pressure spread from software into sectors such as real estate, trucking and financial services. Charles Schwab fell 10.8 per cent over the week, Morgan Stanley dropped 4.9 per cent, and Workday slid 11 per cent. Commercial real estate firm CBRE lost 16 per cent week to date.
Media stocks were also affected. Walt Disney managed a 3 per cent weekly gain, while Netflix declined 6 per cent.
The major averages all finished lower for the week. The S&P 500 fell 1.4 per cent, marking its second straight weekly loss. The Dow declined 1.2 per cent and the Nasdaq dropped 2.1 per cent.
Australian sharemarket outlook
Australia’s sharemarket is poised to test record territory this week, although investors are bracing for volatility as earnings season intensifies.
The S&P/ASX 200 is expected to open 0.6 per cent higher, or 51 points, extending last week’s rally. The index surged 2.4 per cent over the past five sessions, its strongest weekly gain in nine months, and now sits less than 200 points below its late-October record of 9,115.2.
Around 80 companies are due to report results this week, with heavyweight miners BHP and Rio Tinto likely to dominate attention.
Global conditions may also influence trading. U.S. markets are closed for a holiday on Monday, while China remains shut for the Lunar New Year.
