U.S. markets saw sharp moves over two consecutive sessions as technology sector strain and AI disruption fears flowed into broader equity weakness on Thursday, and then gave way to relief after cooler inflation data on Friday.
What Moved
Thursday, Feb 12
Major U.S. indexes fell sharply.
Technology and growth stocks led declines.
The Dow Jones Industrial Average dropped below key near-term levels.
Small cap and broader benchmarks weakened with equity breadth under pressure.
Friday, Feb 13
Markets steadied and ended with modest gains or contained losses.
Treasury yields fell as inflation expectations softened.
The Nasdaq and S&P 500 held nearer flat relative to prior session declines.
Defensive and select cyclicals outperformed on calmer risk sentiment.
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Why It Moved
Thursday’s action was defined by renewed concerns over the disruptive impact of artificial intelligence on corporate profitability and sector valuations. Investors rotated out of technology shares, which amplified weakness across major indexes and pressured market breadth.
On Friday, a cooler-than-expected inflation reading alleviated some near-term rate-cut concerns. Treasury yields pulled back and risk sentiment stabilized. Markets that had been under pressure from the previous day’s selloff found footing as inflation data pointed to easing price pressures, helping steady equities into the weekend.
Why It Matters Now
Across these two sessions, shifts in market drivers were clear:
Thursday’s selloff showed that sentiment around technology and growth can rapidly weigh on broader markets when disruption narratives resurface.
Friday’s stabilization demonstrated that cooler inflation data can reframe rate expectations and relieve pressure on risk assets at least temporarily.
In the immediate window ahead, conditions will hinge on:
Whether the inflation narrative holds in subsequent data releases.
Whether tech valuations find support or further rotation continues.
Movement in Treasury yields as markets price policy expectations.
Absent a fresh macro catalyst that disrupts current pricing, markets may continue to oscillate between risk-on relief and sector-specific pressure around technology stocks.
