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U.S. Stocks End Mixed as January CPI Cools, Treasury Yields Slide

U.S. Stocks End Mixed as January CPI Cools, Treasury Yields Slide. Source: Carlos Delgado, CC BY-SA 3.0, via Wikimedia Commons

U.S. stocks closed mixed on Friday after a volatile trading session, as investors reacted to softer-than-expected January CPI data and falling Treasury yields. The S&P 500 finished flat at 6,835.08, while the Dow Jones Industrial Average edged up 0.1% to 49,500.93. The Nasdaq Composite slipped 0.2% to 22,546.67, weighed down by tech sector volatility. For the week, the S&P 500 declined 1.4%, the Dow lost 1.2%, and the Nasdaq dropped 2.1%.

Fresh data from the U.S. Bureau of Labor Statistics showed headline consumer price index (CPI) rose 2.4% year-over-year in January, below expectations of 2.5% and easing from December’s 2.7%. On a monthly basis, CPI increased 0.2%, also under forecasts. Core CPI met estimates both monthly and annually, reinforcing signs that inflation is gradually cooling toward the Federal Reserve’s 2% target.

The softer inflation report boosted expectations for potential Federal Reserve rate cuts in 2026, according to CME FedWatch data. Treasury yields fell sharply, with the 10-year yield dropping 6 basis points to 4.049% and the 2-year yield sliding to 3.410%. Lower yields typically support interest rate-sensitive sectors such as small-cap stocks, utilities, and real estate.

Technology stocks remained in focus after Thursday’s sharp selloff driven by concerns about artificial intelligence disruption and shifting market leadership. Applied Materials surged on strong guidance tied to AI-driven semiconductor demand and memory chip shortages. Arista Networks gained after reaffirming its margin outlook despite higher chip costs. Meanwhile, Pinterest shares fell on weak revenue guidance amid softer advertising spending. Airbnb climbed after beating revenue expectations and signaling resilient travel demand.

In commodities, gold prices rebounded more than 2% on safe-haven demand amid geopolitical tensions involving the U.S. and Iran. Oil prices fluctuated, with Brent crude near $67.60 and WTI around $62.77, as supply surplus concerns offset geopolitical risks.

Markets now turn their focus to upcoming economic data and Federal Reserve policy signals to gauge the outlook for interest rates and equity markets.

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