U.S. stocks steadied on Friday after an encouraging update on inflation helped calm a Wall Street that’s been wracked by worries about how artificial-intelligence technology may upend the business world. S&P 500 barely budged, a day after it had tumbled to one of its worst losses since Thanksgiving. The Dow Jones Industrial Average rose 48 points, or 0.1 per cent, and the Nasdaq composite slipped 0.2 per cent.
Stocks got some help from easing Treasury yields, which fell after a report showed inflation slowed last month by more than economists expected. U.S. consumers paid prices for groceries, clothes and other costs of living that were 2.4 per cent higher overall than a year earlier.
While that’s higher than anyone would like and above the 2 per cent target set by the Federal Reserve, it wasn’t as bad as December’s 2.7% rate. And an underlying measure of inflation that economists see as a better predictor of where it may be heading slowed to the least-painful level in nearly five years.
AppLovin, for example, lost nearly a fifth of its value on Thursday even though it reported a stronger profit than analysts expected. Investors have been worried that it and other software companies could see AI-powered competitors take away customers and fundamentally change their industries. On Friday, AppLovin climbed 6.4 per cent.
Trucking and freight companies also tumbled on Thursday after a small company, Algorhythm Holdings, said its AI platform helps customers scale freight volumes by up to 400% “without a corresponding increase in operational headcount.” After sinking 14.5% Thursday, C.H. Robinson Worldwide rose 4.9% on Friday.
Such drops have been rolling through the market recently, targeting industries that investors decide are under threat for disruption by AI. The reactions have been so aggressive and so quick that analysts have likened it to a “shoot first, ask questions later” mindset.
Applied Materials was the strongest single force pushing upward on the S&P 500 after rising 8.1%. The company, whose products help make chips and displays, reported a stronger profit for the latest quarter than analysts expected. CEO Gary Dickerson credited “acceleration of industry investments in AI computing.”
On the losing end of Wall Street was DraftKings, which dropped 13.5% even though its profit for the latest quarter topped analysts’ expectations. It gave a forecast for revenue this year that fell short of expectations.
Norwegian Cruise Line Holdings fell 7.6% after replacing its CEO, just a few weeks before it will report its latest quarterly results. The cruise ship operator said John Chidsey, a director at the company who used to be CEO of Subway Restaurants, is replacing Harry Sommer, effective immediately.
The heaviest weight on the market was Nvidia, which fell 2.2%. Because it’s the largest stock on Wall Street, its moves carry more weight on the S&P 500 than any other company’s.
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