CPI remains moderate but tech stocks are weak, US stocks surged then pulled back, Amazon declines for the ninth consecutive day, US Treasury yields rise, gold reclaims the 5000 level

The mild January US CPI report eased market concerns about “re-acceleration of inflation at the start of the year,” leading to increased expectations of rate cuts mid-year and pushing US Treasury yields lower. Although most US stocks rose, continued weakness in large tech stocks restrained major indices’ performance. Gold rebounded above the $5,000 mark, and cryptocurrencies also recovered.

On Friday, major US stock indices closed roughly flat, with the Nasdaq down 0.22%. Notably, the small-cap index rose 1.2%, and the equal-weighted S&P 500 also gained 1.0%, approaching all-time highs, with analysis indicating signs of “de-weighting” within the market.

(Intraday movement of major US stock indices)

According to Wallstreetcn, the US January CPI year-over-year was 2.4%, below expectations, and core CPI fell to its lowest in four years. After the data release, traders increased bets on rate cuts within the year, with an expected total easing of about 62 basis points.

(Federal Reserve expected rate cuts by 2026)

Seema Shah of Principal Asset Management said that, as price pressures are under control, the market is “breathing more easily.” She stated:

The continued strength of the US labor market provides reasons for policymakers to keep policy unchanged, and further decline in inflation in the second half of the year should reopen the door for easing.

Large tech stocks were the main drag on the market, with the Tech Seven Index down 1.1%. Amazon declined for the ninth consecutive day, marking the longest losing streak in nearly 20 years. The semiconductor index rose 0.7%, and software ETF rebounded 2.2%, but overall tech sector recovery remained limited.

(Amazon’s nine-day decline, hitting a 20-year low)

From a technical perspective, the S&P 500 broke below its 50-day moving average but found support near the 100-day moving average.

(S&P’s decline halted at the 100-day moving average)

SaaS stocks rebounded, closing unchanged from the previous day.

(SaaS stocks rebound)

Goldman Sachs traders noted that market fatigue is evident, and after a turbulent and challenging week, the overall market edged higher, with Goldman’s AI risk investment portfolio turning positive for the first time in five days.

(Goldman Sachs AI risk portfolio turns positive after five days)

Data shows significant internal divergence within the US stock market. Factor volatility has risen sharply; over the past 20 trading days, realized factor volatility reached 27.7 times, while the actual volatility of the S&P 500 remains below 15 times, indicating that the stability at the index level masks intense sector rotations.

(Realized factor volatility at 27.7x, S&P 500 actual volatility below 15x)

This week, despite some recovery on Friday, the S&P 500 still posted a second consecutive weekly decline, down about 2% from the late January high. Structurally, defensive sectors outperformed, while financials and some growth styles, previously impacted by the “AI narrative,” experienced increased volatility.

(Weekly sector performance of the S&P 500)

Following the CPI release, US Treasury yields declined across the board. The 2-year yield fell 5 basis points to near lows not seen since 2022; the 10-year yield dropped to 4.05%. Market expectations for no rate hikes in March remain firm, but pricing for rate cuts in June and July has increased significantly.

(US Treasury yields for major maturities this week)

The Fed’s rate cut expectations have risen, putting pressure on the dollar, but due to the US economy’s relative resilience compared to other countries, the dollar’s decline was limited. The yen experienced its largest weekly gain since November 2024. Despite a clear rebound in cryptocurrencies on Friday, the overall weekly performance remains volatile.

(Yen strength this week)

With yields falling, gold benefited significantly. Spot gold rose 2.3% to $5,033 per ounce, regaining the $5,000 level, with intraday gains exceeding 2%. Silver also increased nearly 3%. Institutional views suggest that inflation is no longer spiraling out of control, and the opening of mid-year rate cut windows supports gold’s allocation appeal.

Wallstreetcn reported that the US is considering partial removal of aluminum and steel tariffs. LME aluminum futures briefly fell over 2.7%, then recovered to $3,078 per ton.

Crude oil declined for the first time this year for two consecutive weeks, with WTI roughly steady around $63. The market is weighing the combined impacts of potential OPEC+ production increases, US-Iran negotiations, and volatility in risk assets.

Next week, the US market will be closed for President’s Day, followed by releases of US PCE inflation data and Q4 GDP figures. After the CPI signaled a “cooling,” market focus shifts from “whether inflation will heat up again” to “when will rate cuts truly begin.”

On Friday, US stocks showed mixed performance. Utility ETFs fell over 2.7%, leading the decline among sector ETFs. Amazon dropped 0.41%, marking nine days of consecutive decline—the longest since 2006. Amid AI fears, the week saw:

CFA’s broad market decline of nearly 11%, AppLovin down nearly 4%, CBRE down 16%, S&P Real Estate Services down 14%, marking the largest weekly drop in five years.

Major US stock indices:

• S&P 500 rose 3.41 points, up 0.05%, to 6,836.17.
• Dow Jones Industrial rose 48.95 points, up 0.10%, to 49,500.93.
• Nasdaq declined 50.477 points, down 0.22%, to 22,546.671; Nasdaq 100 rose 45.12 points, up 0.18%, to 24,732.732.
• Russell 2000 gained 1.18%, to 2,646.70.
• VIX (fear index) fell 1.06%, to 20.60.

Sector ETFs:

• Utilities ETF up 2.76%, biotech ETF up 1.09%, healthcare ETF up 1.07%, and at least 0.4% gains in tech, regional banks, energy, banking, and semiconductor ETFs.

(Performance of US sector ETFs on Feb 13)

The Tech Seven:

• The Magnificent 7 index fell 1.34%, to 192.61, down 3.61% for the week, continuing its downward trend.
• Tesla edged up 0.09%; Microsoft down 0.13%; Amazon down 0.41%, marking nine days of decline—the longest since 2006. Google down 1.06%; Meta down 1.55%; Nvidia down 2.23%; Apple down 2.27%.

Chip stocks:

• Philadelphia Semiconductor Index up 0.66%, to 8,137.859.
• TSMC ADR down 0.51%; AMD up 0.67%.

Chinese concept stocks:

• Nasdaq Golden Dragon China Index down 0.10%, to 7,591.86, down 2.77% for the week.
• Among popular Chinese stocks, New Oriental down 2.3%; Alibaba down 2.1%; Xiaoma Zhixing down 2%; Li Auto, JD.com, BYD, Baidu down up to 1.8%.

Other stocks:

• Coinbase surged 16%; Circle up nearly 6%.

European stocks rose about 0.1% this week, with telecom, materials, and auto parts sectors up around 4%, while banks declined over 5%. Germany’s stock market gained about 0.8%; Italian banking sector fell 3.3%, down approximately 5.3% for the week.

Pan-European indices:

• STOXX 600 closed down 0.13%, at 617.70, up 0.09% weekly, rising steadily from Monday to Thursday but plunging sharply on Thursday’s close.
• Euro Stoxx 50 down 0.43%, to 5,985.23.

Country indices:

• Germany DAX 30 up 0.25%, to 24,914.88, up 0.78% weekly, with a sharp drop on Thursday’s close.
• France CAC 40 down 0.35%, to 8,311.74, up 0.46% for the week.
• UK FTSE 100 up 0.42%, to 10,446.35, up 0.74% weekly.

(Performance of major European indices on Feb 13)

Sector and individual stocks:

• Eurozone blue chips: L’Oréal down 4.93%, Deutsche Bank down 3.97%, UBS down 3.79%, Banco Santander down 3.44%.
• All components of STOXX 600: Interpump Group down 18.31%, Tomra Recycling down 8.66%, Bank of Ireland down 6.12%, Norwegian Hydro down 5.94%.
• Sector performance: STOXX 600 telecom up 4.05%, basic resources up 4.01%, auto & parts up 3.90%, chemicals up 2.77%, healthcare up 2.59%, food & beverages up 2.57%.

The 2-year US Treasury yield hit its lowest since 2022 on the CPI release day, with mid- and long-term yields dropping about 16 basis points this week.

US Treasuries:

• NY close: 10-year yield down 4.98 basis points to 4.0483%, down 15.77 basis points for the week, with overall downward movement.
• 2-year yield down 5.45 basis points to 3.4014%.

(10-year Treasury yield at two-month low)

European bonds:

• End of trading: German 10-year yield down 2.4 basis points to 2.755%, down 8.7 basis points weekly. 2-year German yield down 2.3 basis points to 2.036%, down 4.9 basis points.
• UK 10-year yield down 9.8 basis points to 4.416%; 2-year yield down 3.1 basis points to 3.593%.
• France, Italy, Spain, Greece 10-year yields fell up to 10.7 basis points this week.

Following the CPI data, the US dollar index turned lower, dropping over 100 points intraday, with offshore RMB narrowing most of its losses, closing around 6.91. Cryptocurrencies accelerated their rebound, with Bitcoin approaching $70,000, up nearly 6% from the daily low.

Dollar:

• NY close: ICE dollar index steady at 96.929, down 0.72% for the week, after a sharp decline Monday, forming a long tail L-shape.
• Bloomberg dollar index down 0.02%, at 1,181.91, down 0.74% weekly.

(Bloomberg dollar index performance this week)

Non-USD currencies:

• NY close: EUR/USD up 0.04% to 1.1875, up 0.51% weekly, after a strong Monday, then gradually retracing gains.
• GBP/USD up 0.33%; USD/CHF down 1.07%.
• Commodity currencies: AUD/USD up 0.89%; NZD/USD up 0.44%; USD/CAD down 0.41%.

JPY:

• NY close: USD/JPY steady at 152.74, down 2.85% weekly, trading in a range of 157.76–152.27.
• EUR/JPY down 0.01% to 181.29; GBP/JPY up 0.21% to 208.495, down 2.54% weekly.

Offshore RMB:

• NY close: USD/CNH at 6.9012, up 31 points from Thursday’s NY close, trading within 6.8973–6.9109.

Cryptocurrencies:

• NY close: Bitcoin up 4.8%, at $68,918.18, testing the $69,000 level intraday. Ethereum up 6.9% to $2,054.23.

(Bitcoin rebound)

The US Commodity Futures Trading Commission (CFTC) reported that for the week ending February 10, speculative net long positions in NYMEX WTI crude oil increased by 5,937 contracts to 86,314 contracts, the highest in over six months.

Crude Oil:

• WTI March futures rose $0.05, or 0.08%, to $62.89 per barrel.

(WTI crude futures)

• Brent April futures rose $0.23, or 0.34%, to $67.75 per barrel.

Natural Gas:

• NYMEX March natural gas futures closed at $3.2430 per million British thermal units.

Following the CPI release, gold and silver accelerated their rebound, with gold re-establishing above $5,000, surging over 2% intraday, and spot silver rising over 5%. London tin fell nearly 6%, ending the week lower; London copper temporarily recovered from two weeks of lows but continued its decline for a second week.

Gold:

• NY close: Spot gold up 2.5% at $5,045.70 per ounce, up 1.55% weekly.
• COMEX gold futures up 2.17% at $5,050.50 per ounce, up 1.53% weekly.

(Gold prices)

Silver:

• NY close: Spot silver up 2.84% at $77.4269 per ounce, down 0.50% weekly.
• COMEX silver futures up 1.98% at $77.180 per ounce, up 0.45% weekly.

Other metals:

• COMEX copper up 0.02% at $5.8465 per pound, down 1.61% weekly.
• Spot platinum up 3.11% at $2,067.45 per ounce, down 1.74% weekly.
• Spot palladium up 4.53% at $1,696.15 per ounce, down 0.67% weekly.

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Market risks are inherent; investments should be cautious. This article does not constitute personal investment advice and does not consider individual user’s specific investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Investment is at your own risk.