Inflation Eases Amid AI Disruption Fears: Mixed Signals for U.S. Markets

U.S. stock futures rebounded after mild inflation data suggested a potential Federal Reserve rate cut, despite robust jobs reports hinting at prolonged tight policy. AI disruption concerns affected multiple sectors, while the 'Magnificent Seven' companies saw AI capex as a significant focus amid demands for substantial earnings growth.

U.S. stock futures pared their early losses on Friday following softer-than-anticipated inflation data, potentially paving the way for a Federal Reserve rate cut, despite strong jobs statistics suggesting a lengthy period of tight monetary policy.

The Consumer Price Index saw a modest increase of 2.4% annually, below the expected 2.5%, according to a Labor Department report. This report arrives shortly after a more vigorous employment report indicated possible steady interest rates from the Federal Reserve.

Meanwhile, fears of AI disruption cast shadows over sectors such as software and trucking, propelling the three main indexes towards their most significant weekly decline since November. In contrast, the tech industry saw some optimism as Applied Materials' shares surged following favorable projections, alongside peers Lam Research and KLA.

(With inputs from agencies.)