US equity indexes fell this week amid the so-called AI-scare-trade and an increase in the probability of a Federal Reserve policy pause in March following the release of January's nonfarm payrolls and inflation.
* The S&P 500 closed at 6,836.17 on Friday versus 6,932.30 a week ago. The Nasdaq Composite stood at about 22,546.67, compared with 23,031.21 a week earlier. The Dow Jones Industrial Average ended at 49,500.93, versus 50,115.67 at the end of last week.
* Financials, technology, communication services, and consumer cyclicals were the worst-performing sectors this week.
* Altruist unveiled this week an AI tool that helps financial advisers personalize strategies for clients and create pay stubs, account statements, and other documents. AI displacement fears were triggered by the release of Anthropic's Claude Legal Plugin earlier this month.
* The AI-scare-trade is keeping traders from extending US equity risk too much, Macquarie said.
* The reaction to earnings from big-hitters such as Cisco Systems (CSCO), AppLovin (APP), Applied Materials (AMAT), and Arista Networks (ANET) was mixed. Wells Fargo (WFC), JPMorgan Chase (JPM), and Bank of America (BAC) were among the steepest decliners in a category of stocks with a market capitalization of over $200 billion.
* Meanwhile, retail sales unexpectedly failed to grow in December as consumers cut back on spending after kicking the holiday season off at a strong pace.
* Nonfarm payrolls rose by 130,000 in January, double the 65,000 gain expected, with health care adding 82,000 positions to the tally. Further, employers added 181,000 jobs last year, revised lower from the 584,000 reported previously.
* Headline and core inflation cooled from a year ago but remained above the Fed's 2% target. Month-over-month core inflation, however, rose.
* Markets widely expect the Fed to keep interest rates unchanged in both March and April, according to the CME FedWatch tool.
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