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US stock markets traded largely steady on Friday after a softer-than-expected inflation update helped calm investor nerves, even as concerns about artificial intelligence-driven disruption continued to weigh on sentiment.The S&P 500 was nearly unchanged in early trade, a day after recording one of its worst losses since Thanksgiving. The Dow Jones Industrial Average fell 109 points, or 0.2%, as of 9:35 a.m. Eastern time, while the Nasdaq Composite slipped 0.3%, AP reported.Treasury yields declined in the bond market after data showed inflation cooled more than economists had expected last month. Consumer prices were 2.4% higher year-on-year, lower than December’s 2.7%, though still above the Federal Reserve’s 2% target. An underlying inflation measure — considered a better predictor of future price trends — slowed to its lowest level in nearly five years.“It’s still too high, but only for now, not forever,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.Cooling inflation could provide the Federal Reserve greater room to cut interest rates if required. While the Fed has paused rate cuts for now, markets broadly expect easing to resume later this year. Lower borrowing costs could support economic growth and equity markets, though they also carry the risk of reigniting inflation.The broader economic backdrop also appears stronger compared to late 2025, supported by easing inflation and stronger-than-expected job market data last month.The yield on the 10-year US Treasury fell to 4.06% from 4.09% on Thursday.On Wall Street, stocks of companies previously seen as vulnerable to AI disruption stabilised. AppLovin rose 0.3% after losing nearly one-fifth of its value on Thursday despite reporting stronger-than-expected profits, as investors remained wary of AI-driven competitive threats.Freight and trucking stocks, which fell sharply on Thursday after AI platform claims of large productivity gains, also saw mild recovery. C.H. Robinson Worldwide rose 1.8% after dropping 14.5% a day earlier.Recent market moves have increasingly targeted sectors perceived to be vulnerable to AI disruption, with analysts describing the reaction as a “shoot first, ask questions later” approach.Chip equipment maker Applied Materials supported the market, rising 14.1% after reporting stronger-than-expected quarterly profit. CEO Gary Dickerson attributed performance to rising investments linked to AI computing.On the downside, DraftKings fell 14.9% despite beating profit estimates, after issuing revenue guidance for the year that fell short of expectations.Globally, equity markets were weaker. Hong Kong’s Hang Seng declined 1.7%, while Japan’s Nikkei 225 fell 1.2%.
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