U.S. stocks rose on Friday as investors welcomed softer-than-expected inflation data, helping to steady sentiment after a volatile stretch driven by concerns about the AI sector and broad market selling. The S&P 500 led gains with a rise of roughly 0.6%, while the Dow Jones Industrial Average and Nasdaq Composite added about 0.4% and 0.5%, respectively.
Despite the rebound, major indexes remained on track for weekly losses following Thursday’s sharp sell-off, when concerns about AI disruption spilled into traditionally defensive sectors. The latest Consumer Price Index report showed prices rose 0.2% in January and 2.4% year over year, reinforcing expectations that the Federal Reserve could begin cutting interest rates later this year.
Market Movers:
- Corsair Gaming (CRSR) +54%: Shares surged after a strong fourth-quarter earnings beat, with adjusted profit and revenue both topping expectations. Investor sentiment was further boosted by the company’s first-ever share repurchase authorization and optimism around peripherals growth despite cautious 2026 revenue guidance.
- Tri Pointe Homes (TPH) +27%: The homebuilder rallied after Japan’s Sumitomo Forestry agreed to acquire the company in an all-cash deal valued at roughly $4.5 billion. The transaction, which implies a sizable premium for shareholders, expands Sumitomo’s U.S. housing footprint and is expected to close in the second quarter of 2026.
- Rivian Automotive (RIVN) +23%: Shares jumped as investors focused on improving delivery expectations and rapid growth in software and services revenue tied partly to its Volkswagen partnership. Guidance for a meaningful pickup in 2026 vehicle deliveries helped offset concerns about recent declines in automotive revenue and regulatory credit sales.
- Applied Materials (AMAT) +12%: The semiconductor equipment maker climbed after delivering upbeat results and guidance fueled by accelerating AI-driven chip investment. Strong demand for advanced packaging, high-bandwidth memory, and leading-edge logic reinforced expectations for continued industry strength.
- Roku (ROKU) +10%: Shares advanced following a decisive earnings beat and optimistic full-year revenue outlook. Growth in higher-margin platform revenue and stronger-than-expected engagement trends supported confidence in the company’s advertising and streaming ecosystem.
- Pinterest (PINS) -21%: The stock plunged after weaker-than-expected quarterly results and a soft near-term revenue outlook. Investors also weighed potential competitive pressure from rapidly evolving AI-driven discovery tools.
- DraftKings (DKNG) -14%: Shares fell despite strong year-over-year revenue growth as full-year guidance disappointed Wall Street expectations. Slower user growth and concerns about margin sustainability overshadowed solid engagement trends.
- Callaway Golf (CALY) -13%: The company slid after reporting a sharp revenue miss and issuing weaker 2026 guidance. Lower expected EBITDA and declining sales projections dampened confidence in its transition back to a pure-play golf business.
Inflation Data Reshapes Fed Expectations
January’s cooler inflation reading revived expectations that interest-rate cuts could begin as early as June, though markets still anticipate only gradual easing through the end of 2026. The data arrives at a delicate moment for policymakers, as they balance resilient employment trends against signs of slowing consumer demand.
Energy prices provided partial relief to households, with gasoline and fuel oil costs declining on both a monthly and annual basis. However, electricity and natural-gas prices remained elevated compared with a year ago, underscoring persistent structural pressures tied to rising power demand from AI-driven data-center expansion.
Earnings and AI Themes Continue to Drive Volatility
Corporate results remained a central market catalyst. Strength in semiconductor and EV-related names contrasted sharply with steep declines in certain digital-platform and consumer-exposed companies, highlighting how uneven the current earnings landscape has become. At the same time, debate continues around the scale of AI investment and its ripple effects across industries. While some companies are benefiting directly from infrastructure spending, others face mounting questions about disruption risk, keeping volatility elevated across sectors.
Looking Ahead
Investors now turn toward upcoming economic data and additional earnings reports for confirmation that inflation is cooling without a sharp deterioration in growth. Any shift in labor-market strength or consumer spending could quickly reshape expectations for Federal Reserve policy. For now, Friday’s rebound suggests markets remain highly sensitive to incremental macro signals. Whether the recovery can extend beyond a short-term relief rally will likely depend on the next wave of data—and on whether confidence in the AI-driven investment cycle stabilizes in the weeks ahead.