Stocks continued to be under pressure despite a cooler-than-expected reading on January inflation that offset a hot job number earlier in the week. What that means for the pace of future interest rate cuts is anyone’s guess.
For now, investors remain focused on valuation, particularly regarding stocks in the artificial intelligence (AI) trade. Not only are many of these stocks expensive by traditional metrics, but there’s growing concern about the impact of AI on the jobs market. It’s becoming a circular debate.
That said, this earnings season is showing that the major players in the AI trade are posting strong numbers and reiterating or increasing their guidance. Ultimately, earnings are the tell when it comes to stock prices, which is why the overall outlook for stocks remains bullish.
