Dow futures rose Friday morning as investors positioned ahead of the January CPI report and other data that could shape upcoming Federal Reserve decisions. Traders moved after a sharp Thursday selloff tied to rising fears of AI-driven disruption across sectors.
Thursday’s session sent the Dow down 669.42 points to 49,451.98 at the close. Jay Woods of Freedom Capital Markets said “AI, which was the one thing that was driving these stocks to parabolic heights and to multiples that were getting extreme — not overwhelmingly extreme — now is the one thing that’s holding them back.”
The selloff hit commercial real estate firms hard, with CBRE falling nearly 9% and Jones Lang LaSalle dropping 7.6%. Jade Rahmani, an analyst at Keefe, Bruyette & Woods, said “We believe investors are rotating out of high-fee, labor-intensive business models viewed as potentially vulnerable to AI-driven disruption.”
The January CPI report was scheduled for 8:30 AM Eastern and could sway Fed policy. Ross Mayfield of Baird said “CPI is a little bit less important now that we got the good jobs number, because it already allows the Fed to kind of pause for a substantial amount of time. If CPI came in hot, you’d have a couple of months of data to kind of get a sense of the trend before the Fed actually has to make a hard call.”
Economists polled expect 0.3% monthly gains for both headline and core CPI. Goldman Sachs expects headline CPI around 2.4%.
Defensive names rose as investors sought safety, with Walmart up 3.8% and Coca-Cola up 0.5%. Consumer staples and utilities led gains among S&P 500 sectors.
January nonfarm payrolls rose by 130,000 and the unemployment rate fell to 4.3%. The CME Group FedWatch tool pushed the odds of the Fed holding rates to near 40% from 24.8%, though markets still assign a chance of at least one cut this year.
Futures now hinge on incoming inflation data, AI disruption fears, and shifting Fed expectations. The CPI reading will likely determine whether volatility eases or persists in coming weeks.
